Aside from the dismal showing of German bonds this morning, the story of the day appears to be the unveiling of EU President José Manuel Barroso’s proposed economic policy suggestions for how to pull the community out of the current downturn. As outlined in the Guardian this afternoon, the proposals amount to:
1. All 17 euro area countries would send their draft budget plans to the Commission by 15 October each year.
2. The Commission be able to request a new draft budget if the original showed serious divergences with commitments made by member states.
3. The Commission carry out closer monitoring of Member States under its ‘Excessive Deficit Procedure.’
4. The Commission would have the right to decide on enhanced surveillance of member states when financial stability is threatened.
5. The European Council could recommend to a Member State that it requests financial assistance.
6. All euro area Member States would be required to set up independent fiscal councils, and prepare budgets based on independent forecasts.
While Barroso’s pitch was weighed down by early resistance out of Berlin, it really seems like all of the points he made were inevitable conclusions of Euro proponents’ plans for community economic integration. Sure, they are coming earlier than expected and forcing more than one head of state’s hand in the matter, but greater transparency and reporting seems like a natural progression of integration plans for the community and really, in line with what I understood leaders like Merkel to be demanding more of out of Athens and Rome. Critics have pointed to a loss of economic sovereignty in the face of greater oversight from fellow member countries, but unless I missed something along the way, doesn’t an EU community of shared policies requires at least a level of lost independence in favor of the health of the larger community? I understood that to always be part of the plan.
Which leads me to the other big confrontation of recent days – the viability of a Eurobond for member states. Sure, it would mean more short-term benefits for those countries in the most need of assistance and require the most from the countries that have kept things in order. But like the Barroso’s proposals listed above, the bonds seem like a natural evolution or endpoint for the community’s economic integration.
Again – yes, they are coming earlier than expected but if a tool that will eventually be a part of the economic community could help strengthen fellow member states in a time of crisis, why not adopt them earlier than later. Resistance from Merkel and Sarkozy is certainly understandable as it allows a level of acceptance of economic misdeeds, but if eventually, why not now? And if they insist on holding out until a more ideal time, how good do things have to be before they can be considered? Or how bad?