councilWe’ve been here before; staring into the inky blackness of the precipice while Europe’s political leaders gather in Brussels, locked upstairs in the Justus Lipsius building, only to emerge, bleary-eyed, in the early hours of the morning. Just six months ago, British Prime Minister David Cameron had vetoed the EU fiscal compact (which then went ahead as an intergovernmental treaty, outside of the formal EU framework). Now, all eyes are on the new socialist French President, François Hollande. What sort of deal will he be able to work out with German Chancellor Angela Merkel? Will we see a banking union? A financial transactions tax? A roadmap towards eurobonds? Or will today’s Council be more of an interim “progress report”, with little firmly committed until further guarantees against “fiscal profligacy” have been secured?

We spoke to Sergei Stanishev, the Interim President of the Party of European Socialists (PES) – the umbrella party of social-democratic parties from across Europe – and asked him to react to some of your comments. What do the socialists hope to achieve through Hollande at this Council? First up, we had a comment sent in by Marcel that was highly critical of the idea of stronger European economies supporting their struggling neighbours. He left a comment saying:

My country, [the Netherlands], has pension fund assets totalling 130% of GDP. For the rest of the Eurozone on average this is 20-25%. Can you see why fiscal union would be a catastrophe for us? I don’t think you’ll find more than 1% [would] be willing to ‘share’ around, and those are the ones who can afford it. [Among] the lower middle class and lower incomes, who did not profit from the euro at all, you will find no such ‘European’ solidarity. It simply does not exist.

Here’s how Stanishev responded:

Next up, Protesilaos, a Greek blogger, sent us the following video comment about the fiscal compact (which was the result of the December EU Council):

Here’s Stanishev’s response:

Finally, one of the most high-profile policies of the socialists is a Financial Transactions Tax (FTT). You can read our infobox on the FTT here, and we’ve had several debates on the tax already (here and here, for example). Tim Worstall, a UK blogger, has several times argued that the burden of any FTT will fall onto consumers. How would you respond?

What do YOU think? Are you optimistic about today’s EU Council solving the eurocrisis? Will we see a banking union emerge? A financial transactions tax? A roadmap towards eurobonds? Or will this be an exercise in “kicking the can down the road”? Let us know your thoughts and comments in the form below, and we’ll take them to policy-makers and experts for their reactions.

19 comments Post a commentcomment

  1. avatar
    Natalia Lena

    The key to this summit and crisis is ECB…it should do its job properly…and let’s start printing money…!!!why USA does it??! And inflation is controlable…all these things happen because of a piece of paper and numbers in banks…!!

  2. avatar
    Christos Mouzeviris

    Haha..If only Mrs Merkel drops dead!! She actually mentioned that there will be no eurobonds “as long as I live”…So I do not keep much hope for a viable long lasting solution, it will be another mish-mash compromise, while one by one the crisis engulfs the European nations, especially those of the South…

  3. avatar
    Gerry Mavris

    Cyprus on July 1 , when it assumes the EU presidency must put forward the motion for EU wide economic, political and military sanctions to be applied on both Turkey and Britain for their blatant violation of Cypriot sovereignty by Turkish and British military forces. This is the time for all the Euro-zone to come together and apply the most extensive economic sanctions with political and military pressure to expel Turkish and British military forces from Cyprus forever. Turkey and Britain are both the prime cause of the economic crises inflicting both Greece and Cyprus at the moment, since Turkey and Britain have forced Greece to spend heavily on military expenditure to guarantee the freedom of Greece and Cyprus from Turkish imperialism and Turkish military aggression, so that the the British desire of undermining the Euro currency would come true and extinguished by the colossal 340 billion euro Greek military debt. Now is the time .The Eurozone must get back at the British led coalition that wants to make the EURO currency disappear from existence. The European Union must APPLY the most extensive economic, political and military sanctions possible on both Turkey and Britain to get them both OUT of Cyprus. This is the duty of the Cypriot Government and every Euro-zone government on July 1, 2012.

  4. avatar
    Peter Schellinck

    It is a now or never moment. The markets must see that Europe has a plan and is an united business partner. If not one might be better off buying a ‘one way’ ticket to another continent.

  5. avatar
    Gerry Mavris

    To put a fast end to this Eurozone crises, there must be a Eurozone budgetary union, Eurozone Bonds and the pooling of all Euro-zone resources into an effective and formidable EU Defense Force very fast. No more Swiss-style diplomacy with the adversaries of the Euro and the Eurozone member states , otherwise Britain and her coalition will achieve their objective of permanently demolishing the Eurozone for good. Its Now or Never. The moment of truth has arrived.

  6. avatar
    Peter Schellinck

    Today we must see the emerging of a true banking union and a roadmap towards eurobonds. Markets must see that our leaders are in control and not at the mercy of rating companies. A more business like attitude over political bickering is welcome. We are not at a cross road anymore, we are back on a high way and need to decide the way forward to more Europe. Kicking the can down the road would be kicking Europe out of the global league.

  7. avatar
    Nikolai Holmov

    No it won’t solve the crisis and no nothing with any real substance will come of it.

    Total debt sharing by way of Eurobonds will not happen as Mrs Merkel is on record only two days ago as saying “Not as long as she’s alive”. That is a very definitive “No”.

    There maybe some half-way house regarding debt, but a total debt sharing is an unambiguous “No” from Germany.

    As for “political union” that is also not going to come from this meeting either. Maybe somewhere a long way down the road, but not a result of today.

    When we get past the fluff of any up-beat market comforting statements made, the cupboard is very likely to be very bare of real actionable outcomes.

    Get used to the idea that this is going to roll on and on and on for years to come.

  8. avatar

    I think the self- evident answer to the question is a simple ‘No’. This is now summit (I think) number 19, and as with its predecessors, there will be a bland communique committing to measures at some unspecified point in the future. Nothing of substance will emerge and the markets will continue their assault on Spain.

    What then, must be done. What I am hoping, as a British citizen, emerges from the rubble is a realisation that without a significant degree of commonality in culture, language and mores, the EU as a 28 country organisation (with Croatia due to enter) the drive towards an ever closer Federal Union is somewhat premature, and not in keeping with the people of Europe’s will.

    Therefore, I am in effect, the antithesis of Gerry Mavris, who believes that although the people of Europe have shown no desire whatsoever to seize upon what is a moment of crisis to proceed apace with federalism, that the Eurozone Leaders should ‘do it anyway’, thus confirming the suspicion that the idea of the EU being democratic is not much more than a pretense.

  9. avatar
    MandyandPj Leneghan

    There is no way that this is going to work if the EU continue down this road. First of all, the EU must end its ambitions to be an ultra- nationalist single Europe. A duel currency system needs to be put in place, each member nation should return immediately to their own currencies for domestic use only. Each national government should take control of the money supply of their respective currencies and take complete control of printing that currency. National currencies should be isolated from the global system, being only for internal use. This would allow nations to make available as much of their currency that is required to run their own local economies. The Euro should be retained for cross border use and be the only international reserve currency that the EU will use. The EU would have to back away from international binding agreements that do not allow for fair trade and obviously the international gambling financial cartels. All goods and services within the EU should be made or provided by Europeans where it is possible to do so and forget these pretend free trade agreements with outside the EU. A bit rough but most should get the picture…pj

  10. avatar

    Europe is like a 2 headed dog at a crossroad, cut off one head take a decision and move on.

  11. avatar

    i am setting an ultimatum for Europe to solve this mess, cuz i’m losing patience with this stupid crisis in my territory.

  12. avatar
    MandyandPj Leneghan

    Dual currency, each member nation reintroduce own currency, print own currency for domestic use only. Local currencies will all have different values to the Euro but it will allow each member nation scope to ensure its citizens quality of life. A bit like seperating the speculative (euro) system from the retail (domestic) needs. Nothing else will work except complete breakup…pj

  13. avatar
    Nico Keppens

    What happened with the idea to split saving banks from investment banks? It would guarantee better the ‘common’ citizens’ money and, with the new Council proposal, it is in the benefit of the banks too: saving banks run less risks to fail, so banks will ‘only’ have to support investment banks if these ‘fail’.

  14. avatar
    catherine benning
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