Delors: Budget treaty a “labyrinthine structure”
By Nathalie Vandystadt | Thursday 29 March 2012
The speech by Jacques Delors at the European Parliament is certain to have made an impact and to have irritated Paris and Berlin. At a Socialist colloquium, on 28 March in Brussels, the former president of the European Commission called for a “review” of the new budget treaty pushed through by Nicolas Sarkozy and Angela Merkel, which he described as a “labyrinthine structure”. He also lashed out at several European officials, accusing them of “irresponsibility”.
“Since 1970, Europe has had the choice between survival or decline,” said Delors, after a 45-minute address applauded repeatedly by Socialist MEPs, who intend to propose an “alternative” to the right-of-centre parties in office, accused of “undermining the foundations of the social state” by imposing austerity without a growth strategy. The “wake-up call” demanded by Delors, a symbol of the European Union and former finance minister of François Mitterrand, will necessarily imply “solidarity that unites”. He regrets that it is quite the opposite that is taking place: “When Spain, under a right-of-centre government, tries to reduce its deficit but cannot meet the figures set by technocrats, and a head of government [Italy’s Mario Monti - Ed] plus a member of the Commission [Economic Affairs Commissioner Olli Rehn - Ed] immediately become alarmed, at the risk of stirring up anxiety on markets again, I say that is irresponsible,” he declared. Delors went on to describe Monti and Rehn as “pyromaniac firemen”.
Like the Socialist presidential candidate in France, Delors argued, without mentioning François Hollande, for revision of the budget pact signed by 25 of the 27 member states: “The budget treaty is a labyrinthine structure but it lacks a component on growth. For that alone, it should be challenged”. He continued: “The economic and monetary union is in a stranglehold, with fires smouldering on financial markets – the main argument used by those who want to force the budget pact on us – and the risk of stagnation that would drag Europe into decline”. Although financial consolidation is “necessary,” there is a need to “restore Europe’s confidence in its dynamism, growth and job creation”.
Governments – mainly on the right – are accused of flirting with nationalism and abandoning the EU’s foundations: “It has always been the governments that decide, as long as Europe has existed. But we are seeing the Community method disguised and Europe reverting to the Vienna Congress [a conference of representatives of the leading European powers, on 1 November 1814 - Ed] and nationalism”. In passing, he had a dig at the European Council president, whose mandate has just been renewed for two and a half years: “No, Mr Van Rompuy, you are not defending the Community method […] the only system that permits sovereign states to live together”.
“WHO SPEAKS FOR EUROPE?”
For Delors, “there has been cacophony for the last three years” although the Lisbon Treaty was supposed to have remedied this problem. The weakened Commission is accused of having abandoned “social dialogue” and embraced liberalism.
The Eurogroup of the 17 eurozone finance ministers is “morally and politically responsible for the crisis” – along with the international causes – for failing to ensure coordination and as a result not having seen the abuse in the Irish banking system or in the Spanish housing loans sector, or the false figures on the Greek debt. For Delors, the solution for the euro was “enhanced cooperation,” which no one wanted. So the monetary pillar is there, but the economic pillar is missing. Although the single market with its single currency worked well until 2007 and benefited “some,” especially in Germany, the EU then underwent a “crisis of the conception of economic and monetary union”.
With the turning point of the euro crisis, “not all countries will be able to adopt the German model. We are in a Union of diversity and each member has its strengths,” said Delors. Although the European Central Bank did well to lend banks €1,000 billion, he does not agree that the ECB should remain a last-resort lender at all times.
Without giving further details, Delors called for “institutional changes” capable of reinvigorating the Community method and the Commission’s role. “Europe will be European and European alone,” he summed up, even if it will always be up to the heads of state to decide.
The eurozone could advance “without adversely affecting the marriage contract among the 27”. This will “not create division but dynamism for Europe”. There should be more “delegation of sovereignty” to the eurozone, otherwise Germany will continue to impose its views. When questioned on this, Delors even suggested the creation of a “Parliament of the 17”. Lastly, in the face of the German refusal, Delors stressed the need to create eurobonds based on guarantees from other eurozone countries, which would make it possible to pool public borrowing.
Among their other claims, the Socialist MEPs who have signed the declaration ‘For a European Socialist alternative’, supported by Delors, call for the inclusion in the treaty of social rights and objectives subject to the same surveillance and implementation instruments as economic objectives.