Member states shall regard their economic policies as a matter of common concern and shall coordinate them with the Council– Treaty on the Functioning of the EU.
THERE’S LITTLE doubt that Angela Merkel’s strong hand at the Brussels EU summit was reinforced by two trump cards: Germany is the EU’s paymaster/generator of economic growth, and, only months ago, Berlin was the most vocal opponent of the sort of EU crisis rescue mechanism that the German chancellor now insists needs copperfastening in a treaty. Her pleading that her hands are likely to be tied by her constitutional court is made all the more convincing. And so, largely, and inevitably, she got most of what she wanted from her fellow EU leaders.
From an Irish perspective the establishment of a permanent crisis fund to replace the temporary one that will lapse in 2013 is in itself desirable and welcome, as Taoiseach Brian Cowen made clear. Irish reservations rightly remain over the extent to which German desires to provide less than whole-hearted guarantees to private sector bondholders will inevitably push up interest payments for potential defaulters, a battle yet to be fought. And the Government will be delighted proposals to suspend voting rights of misbehaving states got short shrift – not least, whatever the merits of such a discipline, because it would certainly have required an Irish referendum, and one impossible to win.
The Brussels summit’s brief to president of the council Herman Van Rompuy, for a report in seven weeks, does not yet commit leaders to a treaty change but accepts a “limited” change is likely to be necessary and expresses a preference for the Lisbon Treaty’s ‘‘simplified revision procedure’’, a shortcut mechanism which may apply if it does not involve any ‘‘increase in the competences conferred on the union’’, but in which member states still retain their veto.
That is important for Ireland where the legal requirement for a referendum on treaty changes, as defined by the Crotty case, is restricted to amendments that go beyond what the courts define as “necessitated by membership” or pushing beyond the essential scope and objectives of the union. In Crotty the Supreme Court also distinguished quite logically between changes adding new “competences” – new areas in which the EU can act – for which a referendum is required, and changes to procedures within competences, such as voting rules, where a Dáil vote is sufficient to ratify a change. That has allowed Ireland regularly to ratify the accession of new member states without referendums, as it is expected to do again shortly on Croatia. There is nothing undemocratic about doing the same with a largely technical amendment to allow a rescue fund.
The summit also endorsed a report from Mr Van Rompuy on measures within the current treaties to enhance joint economic governance and supervision of member state budgets. These are a welcome and necessary attempt to ensure the union is not perpetually closing stable doors after horses have bolted.