Merkel Pushes E.U. Treaty Change
By STEPHEN CASTLE
BRUSSELS — After eight years of bickering over the latest rewrite of the European Union's labyrinthine treaty, the last thing most of its 27 nations want is to do the same thing again.
The question is whether they dare tell that to Angela Merkel, the German chancellor. Mrs. Merkel, with the support of Nicolas Sarkozy, the French president, has demanded alterations to the Lisbon Treaty, which came into force less than a year ago, to strengthen management of the euro.
A two-day summit meeting in Brussels, starting on Thursday, will be dominated by the proposed alterations. Some officials are suggesting that any treaty changes should be technical and introduced through what has been labeled a "treaty change-lite" option, which would shortcut normal procedures.
With tensions high, the meeting will test the ability of Germany and France, the leading architects of European integration, to achieve their aims despite broad opposition. Already, their decision to open up the treaty, which was announced last week in Deauville, a French seaside resort, has prompted a backlash.
On Wednesday, Viviane Reding, the E.U. justice commissioner, described the declaration as "irresponsible," reminding France and Germany that the European Union is made up of 27 nations. About a dozen countries voiced reservations at a meeting of E.U. foreign ministers this week.
In the Deauville declaration, France agreed to support a change to the E.U. treaty, while Germany accepted France's call to water down proposals to punish nations that fail to control their finances.
Mrs. Merkel insists that treaty change is necessary to set up a permanent mechanism to support euro-zone nations close to default, and to put in place insolvency procedures.
But, since treaty alterations require approval from each E.U. state, some fear that this could lead to unwinnable referendums.
According to Joachim Fritz-Vannahme, director of European projects at the Bertelsmann Foundation, a German research institute, the Deauville declaration was a presentational error. "One cannot take a walk on the beach and, suddenly, announce you have found the way to save the euro — you cannot proceed like that," he said.
Yet Mrs. Merkel is in a tricky position. While the economic crisis has shown Germany that it needs to deepen economic cooperation, it is also, Mr. Fritz-Vannahme said, battling with the fact that "for the first time since the Second World War, there is an overwhelmingly Euroskeptical feel in the German political world and public opinion."
In May, after relentless pressure from the financial markets, Mrs. Merkel reluctantly helped create a large, but temporary, crisis fund for the euro zone.
To make this permanent when its mandate expires, in 2013, Mrs. Merkel has said that she requires treaty change to satisfy Germany's constitutional court.
Her plan would require nations to restructure their debt, which would mean losses for private-sector creditors, before getting access to E.U. funds. They could also be deprived of their E.U voting rights, a move to satisfy German public opinion that the measures are tough.
Other changes to the rules governing the euro are likely to be agreed this week. These will be based on changes proposed by a committee led by Herman Van Rompuy, the president of the European Council, the body where national governments meet.
These would make debt a more important factor and create a new framework of penalties for nations that fail to stick to debt and deficit rules. Countries would be required to lodge funds with the European Commission and would first lose interest on them, then forfeit them completely, if they continue to be in breach of the rules.
But the political debate will revolve around whether or not to rewrite the Lisbon Treaty, which was supposed to be the final word on institutional change for many years.
Some say changing the treaty is unnecessary. Guy Verhofstadt, a former Belgian prime minister and a senior member of the European Parliament, said Wednesday that most changes would be introduced under clauses in the Lisbon Treaty. "Let's examine the possibilities we see in the treaty," he said.
The two-day summit meeting is unlikely to take a firm decision but will probably leave Mr. Van Rompuy to examine the options for treaty change.
But ultimately the most likely solution is the use of a simplified revision procedure, which would achieve most, but not all, of the alterations Germany wants.
This would allow heads of government to make changes without convening a formal conference of the 27 nations or setting up a wider consultative committee. It would also avoid the need for any referendums, although it would not be suitable for more far-reaching changes, such as the proposed change under which governments would lose their E.U. voting rights if they stayed in breach of the rules.
Luxembourg has already ruled out the idea of suspending voting rights, but Mr. Fritz-Vannahme said he believed that this measure was not Mrs. Merkel's primary objective.
In Berlin on Wednesday, however, Mrs. Merkel gave no hint of backing down, Reuters reported. "The new rescue mechanism has to be legally sound," she said. "This will only succeed if there is a change in the E.U. treaties."
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