EU summit on debt crisis faces Brussels disruption as unions strike
Three of Belgium's biggest unions expected to bring Brussels to a standstill as EU leaders arrive for a crucial summit
A notice on the Brussels metro warns passengers to expect severe disruption during the national strike. Photograph: Delmi Alvarez/AP
Three of Belgium's biggest unions are expected to bring Brussels to a standstill on Monday and complicate the arrival of EU leaders for a summit that is their first attempt this year to resolve the single currency and sovereign debt crisis.
Air travel will be seriously disrupted, public transport halted, and roads blocked in the 24-hour strike called to protest against the austerity packages raining down on the EU, with the new Belgian government seeking to lower its debt by raising taxes, slashing benefits and laying off workers.
The issues behind the strike are the same as those on the agenda for the summit. Greece's desperate plight hovers over the meeting, although formally there is no mention of Greece on the agenda or in the statements drafted for the meeting.
Instead the leaders of the 27 governments will discuss how to underpin an EU recovery - of which there is absolutely no sign - with "smart growth" policies which would entail medium-term structural reforms, cutting labour costs, reshaping labour markets and redirecting surplus EU budget funds towards the eurozone periphery where the debt crisis is hitting hardest.
The leaders are also to finalise two new treaties directly dealing with theeuro crisis.
The first is the German-led "fiscal compact" which supersedes the currency's rulebook, the stability pact, by enshrining debt and deficit ceilings across the eurozone, giving Brussels greater powers to enforce compliance and penalise offenders, and making the fines imposed on delinquents more automatic and less open to political abuse.
The second treaty sets up the eurozone's new permanent bailout fund, the European stability mechanism (ESM), which is to come into operation a year earlier than planned in July with a kitty of €500bn (£420bn). The two treaties are explicitly linked, at Berlin's insistence. From March next year a country in need will not be able to tap the bailout fund unless it has signed up to the other treaty and the stiff new fiscal and budgetary rules.
Much remains to be resolved on the new measures and the two treaties may not be concluded on Monday. "Political agreement" among the leaders should be reached, but contentious points may not be settled for several weeks.
Britain has no part in the fiscal compact, and the Czech Republic and Sweden - also outside the euro - may not take part, leaving 24 countries to sign up. As the biggest non-euro country hoping to sign the pact, Poland is demanding a seat at the table in the system of eurozone summits that is part of the new regime, while France is leading the resistance.
The issues behind the strike are the same as those on the agenda for the summit. Greece's desperate plight hovers over the meeting, although formally there is no mention of Greece on the agenda or in the statements drafted for the meeting.
Instead the leaders of the 27 governments will discuss how to underpin an EU recovery - of which there is absolutely no sign - with "smart growth" policies which would entail medium-term structural reforms, cutting labour costs, reshaping labour markets and redirecting surplus EU budget funds towards the eurozone periphery where the debt crisis is hitting hardest.
The leaders are also to finalise two new treaties directly dealing with theeuro crisis.
The first is the German-led "fiscal compact" which supersedes the currency's rulebook, the stability pact, by enshrining debt and deficit ceilings across the eurozone, giving Brussels greater powers to enforce compliance and penalise offenders, and making the fines imposed on delinquents more automatic and less open to political abuse.
The second treaty sets up the eurozone's new permanent bailout fund, the European stability mechanism (ESM), which is to come into operation a year earlier than planned in July with a kitty of €500bn (£420bn). The two treaties are explicitly linked, at Berlin's insistence. From March next year a country in need will not be able to tap the bailout fund unless it has signed up to the other treaty and the stiff new fiscal and budgetary rules.
Much remains to be resolved on the new measures and the two treaties may not be concluded on Monday. "Political agreement" among the leaders should be reached, but contentious points may not be settled for several weeks.
Britain has no part in the fiscal compact, and the Czech Republic and Sweden - also outside the euro - may not take part, leaving 24 countries to sign up. As the biggest non-euro country hoping to sign the pact, Poland is demanding a seat at the table in the system of eurozone summits that is part of the new regime, while France is leading the resistance.
Instead, the summit is likely to conclude with ringing calls for "smart growth" policies and jobs creation in an attempt to placate the markets, public opinion and Belgian trade unions, without pledging any of the means to do so.
http://www.guardian.co.uk/world/2012/jan/29/eurozone-crisis-greece-commissioner-plan
ReplyDeleteWith the atmosphere among recession-hit Greeks becoming increasingly explosive three years into the crisis, the proposal was angrily denounced with one politician slamming it as the "product of a sick imagination".
"It's absolutely laughable," said a senior government source. "It's a draft paper that appears to have been deliberately leaked but we have no idea who the author is or where it's come from in the German government."
As if the strike won't be a distraction and the issues are complicated enough as they are - the deliberate leak of the German plan has definitely put things on a knife's edge....
http://www.guardian.co.uk/business/2012/jan/29/uk-block-eurozone-duncan-smith
ReplyDeleteThe work and pensions secretary, Iain Duncan Smith, has said Britain would block eurozone countries from using institutions paid for by EU nations.
Pressed on the possible use of the European commission and courts, which are funded by EU countries, in the push for deeper fiscal and political union among the 17 single currency members states, Duncan Smith said the prime minister had vetoed "any such possibility".
* * * *
Duncan Smith warned against "fiddling around" with democracy following Saturday's leak of German proposals for an EU budget commissioner with veto powers over Greek taxes and spending.
The Greek government dismissed the plans and vowed to stay in control of its own budget.
Duncan Smith said: "You need to be very careful about how you deal with sovereign states and their ability to govern themselves and I know the prime minister has said this to them and I think as one of the great historical democratic nations, we should always stand up for democratic freedoms all over Europe. After all, lack of democratic freedoms is what caused the second world war."
UK will stand by its veto tomorrow ...... interesting comments from Duncan smith