Ratification of this treaty, set to be signed on 1 March, will probably take a year or so. There is nothing to suggest the possibility of accelerated implementation, given the different elections being held in 2012 ⁽¹⁾ and the constitutional amendments needed to write the treaty into different national legislations. Once this first step has been completed, proper transposition of the balanced budget rule into national law will have to be assured, provided none of the signatory states has brought a legal action before the Court of Justice over the conformity of transposition of the said rule into national law by another state party… Meanwhile, it is to be hoped that markets remain confident and calm!

But why push forward the entry into force of the European Stability Mechanism from July 2013 to July 2012 ⁽²⁾, since its provisions can be applied at the earliest only once the ‘Treaty on stability’ has come into force?

Those who claim that the ‘Treaty on stability’ is useless are mistaken. Budgetary policies remain the competence of member states. They have often even led to the establishment of their national parliament in the name of the consent to taxation principle. Consequently, only an intergovernmental treaty can organise the co-management by the 25 of national budgetary policies.

There is no clear answer to the question of democratic scrutiny of the treaty, however. The European Parliament has no competence for monitoring budget policies that are a national responsibility and, all in all, national parliaments will have little to invoke against the “automatic mechanism” to correct excessive deficits laid down in the ‘Treaty on stability’. Article 13 of the new treaty admittedly states that “the European Parliament and the national parliaments of the contracting parties will together determine the organisation and promotion of a conference of representatives of the relevant committees of the European Parliament in order to discuss budgetary policies and other issues covered by this treaty”. But apart from debating these policies, what powers would this conference have on intergovernmental or national decisions taken pursuant to the ‘Treaty on stability’?

These inconsistencies (with regard to the calendar and the absence or weakness of parliamentary scrutiny) arise from the unsuitability of the current European institutional structure, the broad outlines of which stem from a pre-globalised world and are incompatible with the pooled exercise of governing powers (budget, currency, foreign and defence policy).

It is urgent to give the European Union an institutional architecture adapted to globalisation. There are not likely to be any further advances in policy as a Union of 27. It may perhaps be wiser for a pioneering group (France, Germany, Benelux) to lead the way to a clearly federal framework after obtaining the consent of the peoples concerned. Other members of the Union could subsequently decide whether or not to join this federation, knowing full well the sacrifices they would have to make in terms of sharing sovereignty within a reinforced democratic framework.

(*) Jean-Luc Sauron is visiting professor at Paris-Dauphine University and author of ‘L’Europe est-elle toujours une bonne idée?’, published by Gualino.

‘Treaty on stability’

The following are extracts from the ‘Treaty on stability, coordination and governance in the Economic and Monetary Union’ (hereafter the ‘Treaty on stability’) agreed by 25 European leaders (all but the United Kingdom and the Czech Republic), on 30 January 2012:

Penultimate recital: “The granting of assistance in the framework of new programmes under the European Stability Mechanism will be conditional, as of 1 March 2013, on the ratification of this treaty by the contracting party concerned and, as soon as the transposition period mentioned in Article 3(2) has expired, on compliance with the requirements of this article.”

Article 3.2: “The rules mentioned under Paragraph 1 [The budgetary position of the general government shall be balanced or in surplus] shall take effect in the national law of the contracting parties at the latest one year after the entry into force of this treaty through provisions of binding force and permanent character, preferably constitutional, or otherwise guaranteed to be fully respected and adhered to throughout the national budgetary processes.”

Article 14.2: “This treaty shall enter into force on 1 January 2013, provided that twelve contracting parties whose currency is the euro have deposited their instrument of ratification, or on the first day of the month following the deposit of the twelfth instrument of ratification by a contracting party whose currency is the euro, whichever is the earlier.”(Unofficial translation)

⁽¹⁾ General and presidential elections in France, general elections in Slovakia, Greece, Lithuania, Romania and Austria, presidential election in Slovenia, and local elections in Italy, Belgium and Finland
⁽²⁾ Second paragraph of the communication by euro area states, dated 30 January 2012