Member states deeply divided over sanctions for persistent breaches of the EU's budget rules, writes ARTHUR BEESLEY, European Correspondent
EU COUNCIL president Herman Van Rompuy is coming under mounting pressure to bridge divisions between the major European powers on measures to fortify the union’s economic system.
At a summit in Brussels today, European leaders will call for momentum to be maintained in a negotiation he is chairing on the reform of the EU’s economic rulebook.
Months into talks prompted by the euro’s sovereign debt crisis, member states remain deeply divided over sanctions for countries that persistently breach the EU’s budget rules.
The debate has exposed a fault line between Germany, Sweden, Finland and the Netherlands – who favour the suspension of EU voting rights for rule-breakers – and a large group of other countries which do not want to go down that road because it would require changes to the EU treaties. These countries include Ireland.
French finance minister Christine Lagarde underlined the depth of the tension in a newspaper interview yesterday when she said the talks had run into “very difficult” legal obstacles and political objections from non-euro countries.
“The principle of strong sanctions is not disputed, but I think people are having great difficulty figuring out what those sanctions might be,” a senior diplomat said.
Mr Van Rompuy has acknowledged the challenge he faces, saying in a letter to European leaders that “more work” is required before he delivers a final report on the talks to the EU summit in six weeks.
In a video message posted on the internet, he declared the EU authorities “won the battle on the euro” during the debt crisis that shook the single currency as Greece was rescued by the EU and the IMF.
The tenor of this remark is in contrast with other top-level EU officials who prefer not to declare victory in turbulent times, among them European Central Bank chief Jean-Claude Trichet.
Mr Van Rompuy said “problems are not over”, but maintained Europe was “in a much better shape than before the summer”.
While the enormous financial burden on Ireland due to the Anglo Irish Bank rescue may come up on the fringes of the meeting, two high-level sources said there were no plans for any substantive discussion on the Irish situation.
A senior diplomat acknowledged a “considerable amount of concern about the situation”, but said this was not confined to Ireland.
The summit was primarily called to discuss the EU’s strategic relations with global powers such as the US and China, although the Government has made light of an instruction to EU foreign policy chief Catherine Ashton to examine deeper ties with Nato in relation to crisis management.
“Defining strategic partners is like defining love, you know it when you see it,” said a senior EU source.
EU leaders will be accompanied at the summit by foreign ministers – their first attendance at such a meeting since Lisbon Treaty reforms last year confined most summits to heads of state and government.
Although the leaders will discuss preparations for an EU/US summit in November and a meeting of the G20 group in Seoul, diplomats said preparations for today’s summit were marred by tension between the offices of Mr Van Rompuy and Baroness Ashton.
The foreign policy chief pushed ahead yesterday with her first ambassadorial appointments to the EU’s nascent diplomatic service, with three Irish officials from the European Commission included among the nominees.
Baroness Ashton said she would dismiss any suggestion the absence of Irish national diplomats from the list represented a blow to Irish diplomatic prestige. “I would say they are completely wrong,” she said.
A spokeswoman in Brussels said the Government was pleased to see the success of the three Irish Commission officials, wished them the best and said their appointment was a confirmation of the excellence of the people who have gone from Ireland into the EU institutions.
“We would, of course, also like to have seen candidates from our national diplomatic service succeeding on this occasion. But we see the posts announced today very much as a first instalment in the gradual building up the new European service,” she said.
“We look forward to officials from the Irish Department of Foreign Affairs being involved in the service in the future.”
The appointees include 13 national diplomats and 16 officials of the European Commission.