Belfast Telegraph

Monday 28 July 2014

We're looking at West Wing style eurozone

Chancellor Merkel and President Sarkozy

It all seemed very odd, yet vaguely familiar. The German coalition's equivalent of the Tanaiste, Free Democrat leader Phillip Roesler, was going to Paris to present his ideas for dealing with indebted, deficit countries.

Why was he going to Paris? Well, now we know - now that President Sarkozy and Chancellor Merkel have announced that they have agreed on how distressed banks should be recapitalised, and the euro saved, although they are not yet ready to tell us exactly how.

Mr Roesler was pitching the Free Democrat idea of creating an insolvency system for countries, which would go into a kind of administration, where outside entities would decide how they were to be made solvent again.

Dr Merkel is not very keen on the idea, apparently, and Mr Roesler wanted Mr Sarkozy to promote it in his discussions, nay arguments, with the chancellor. We shall soon find out if he did so with any success.

That was when I realised what was familiar - a realisation confirmed by the extraordinary Merkel/Sarkozy announcements.

It is the West Wing, spread over two capitals. Or, if one wants to be more formal, and more provocative, the US Constitution.

The two big countries are arguing over what to do - just as the US president's team argue in the White House (and, by all accounts, argue with a ferocity that would put Mr Sarkozy to shame).

When they - both White House and Berlin/Paris - have agreed on what they want done, they make their proposals. This is where the parallels get almost eerie. The other member states can object, and even block the proposals. That leaves them acting like Congress to the Franco/German presidency. But that is not how the unwritten European constitution is meant to work.

The European Parliament has such a role, but proposals are supposed to come from the theoretically apolitical Commission, and the member states have their complex voting rules for deciding what to do with such proposals.

It has become clear that such a system is far too elegant for the trench warfare of a defining crisis.

Like some Darwinian piece of natural selection, survival has evolved an unplanned system remarkably like the one carefully planned by the US founding fathers.

Except, of course, that this will not do. At least, not in the long run.

I have a feeling that it may be the very least the eurozone needs if it is to survive and get a chance to carefully plan how things should be done in future.

It seems a bit early for Taoiseach Enda Kenny to be picking a fight about changes to the Lisbon Treaty.

The vista is indeed appalling, but there can be little doubt that part of the process of saving the euro will be some kind of fiscal union.

That does require a new political regime to give it some democratic accountability.

Whichever views one takes, it is the force of terrible events which is driving today's decisions, not Bismarck's derided speeches and majority votes.

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