The make-or-break summit convened in Brussels to avert the collapse of Europe’s single currency set the stage for yet another anti-democratic European power grab.
The leaders of the 27-member European Union met in Brussels on December 8 and 9 under pressure to deliver a decisive solution to Europe’s two-year-old sovereign debt crisis.
But the high-profile summit — which was billed by many as the last chance to save the euro single currency — did little to resolve the immediate crisis at hand, namely the massive debt loads of most European countries and the spiraling costs of borrowing more money to pay off those debts.
Instead, German Chancellor Angela Merkel and French President Nicolas Sarkozy (aka “Merkozy”) leveraged the crisis summit to secure a “historic” commitment from all of the 17 countries that use the euro single currency (aka “eurozone countries”) to transfer broad new economic and financial decision-making powers to unelected and unaccountable technocrats in Brussels, the administrative capital of the EU.
The new “fiscal compact ” is a major step on the road to creating a single economic government in Europe. By giving Brussels more power to codify and enforce debt limits and impose central oversight of national budgets, the agreement takes the EU on step closer to consolidated and centralized fiscal authority in Europe. Among other features, the agreement also gives the European Court of Justice the right to strike down national laws that conflict with diktats issued by bureaucrats in Brussels, although EU legal experts are still unsure about how this can or will be enforced.
British Prime Minister David Cameron was the only EU leader who refused to go along with what many observers have described as an attempted European coup d’état.
Cameron vetoed the European power grab after Merkozy refused to give Britain — which uses the pound, not the euro — a written promise that the City of London would be exempt from heavy-handed EU rules and regulations that could damage its £46 billion (€54 billion; $72 billion) financial services sector.
In particular, Cameron had demanded that Britain be able to veto any usurpation of regulatory power over financial services from London to Brussels. He was especially keen on avoiding a move towards a Europe-wide financial transaction tax that would see London become a less attractive destination in which to do business.
In this context, Cameron had also insisted on measures that would prevent the eurozone countries from demanding that euro-denominated transactions be conducted in Frankfurt or Paris, something that would reduce the amount of business being done in the City of London.
Cameron’s veto will make life more complicated for Europe’s empire builders. In practical terms, rather than amending the existing Lisbon Treaty, which comprises the constitutional basis for the EU, the other 26 member countries of the EU will now have to forge a completely new “intergovernmental” treaty.
The agreement reached in Brussels on December 9 calls for the new treaty to be drafted within the next three months (by March 2012), even though in the past this process has taken many years. After that, the treaty will need to be ratified by each of the 26 countries. Some of them, such as Ireland, will also require holding public referendums.
Without Britain on board, the other 26 EU countries could also face potentially complicated legal obstacles, especially on how the new treaty will be enforced.
Moreover, Cameron says he will not allow the other 26 EU leaders to use the institutions of the 27-member EU to draft and police regulations for the 17 eurozone countries. Presumably, this would include the European Commission and the European Court of Justice, which Britain, as a member of the EU, helps to pay for through its annual contributions to the EU budget. He says the EU institutions are there to serve the interests of all 27 countries equally and not just a small group.