Fiscal Compact, a “difficult to digest” Treaty

National debt continues to be the main point of failure of the European Union. In these days, Ecofin Council is leading to the conclusion a Fiscal Compact Act, an international treaty that will significantly reduce the powers of parliaments in economic matters … that wish involve all EU countries, while stating that  memberships will be ‘at least twelve’ …

That’s what it is the Treaty hardly required by Monti, Merkel and Sarkozy:

•     the medium-term objective is that government budgets should be (or come after a ‘path toward’) in balance or in surplus
•     during convergence in medium term, the annual structural deficit can not exceed 0.5% of gross domestic product at market prices. The Parties shall ensure a rapid return
•    partecipant countries may temporarily deviate from their target in the medium term only in exceptional circumstances
•     ’exceptional circumstances’ means a period of severe economic downturn or an unusual event outside the control of the partecipant countries
•     in case of significant deviations from the medium term, a ‘correction mechanism’ should be activated automatically and partecipant countries have an obligation to predetermine it
•     partecipant countries must introduce appropriate rules into national law within one year after entry into force of  Treaty by means of binding provisions and permanent character, preferably a constitutional
• partecipant countries shall ensure the independence of national institutions responsible for monitoring compliance with the rules
•     treaty establishes an ‘Annual Report of the structural balance of public administration’, net of one-off and temporary
•     when ratio of government debt to gross domestic product exceeds 60% of the reference value the partecipant countries must implement the excessive deficit procedure, as the EU Regulation
•    European Union must implement a program of coordinated fiscal and economic partnership (including a detailed description of structural reforms) for the partecipant countries that are the subject of an excessive deficit procedure
•     implementation of the plans programmed annual budget will be monitored by the Commission and the Council of Europe
•     partecipant countries report on their ex ante plans to issue debt
•     partecipant countries whose currency is the euro shall undertake to support the proposals or recommendations submitted by the European Commission in a Member State violating the criterion of the excessive deficit
•     if a partecipant country considers, regardless of the Commission report, that another State has not complied with the terms of the agreement, may bring the matter to the Court of Justice, with a binding ruling
•     partecipant countries shall ensure that all the economic reforms that intend to undertake will be discussed ex-ante and, where appropriate, coordinate with each other
•     Premiers of the partecipant countries whose currency is the euro shall meet informally in meetings of the ‘Euro Summit’, where can be invited the President of the European Parliament and the European Central Bank Governor
•     President of the ‘Euro Summit’ is appointed by the Premiers of the partecipant countries whose currency is the euro by a simple majority
•     partecipant countries shall define the organization and promotion of a Conference of Presidents of the Budget Committees of national parliaments
•     the Treaty will be ratified by the parties in accordance with their respective constitutional requirements and shall enter into force on 1 January 2013, provided that there are at least twelve partecipant countries

What will discuss, starting from 2013, the parliaments of many European states is difficult to understand, since the spending limits and terms are defined elsewhere and ‘ex ante’.

As it is difficult to understand how countries like Great Britain, Sweden, Norway or Danemark will balance the initiative in the European Union of an ‘Euro Summit’ that works without them.

Or what could happen in Italy or Greece, where the Treaty, that reduces the effective democracy, will be legitimately approved  – at least in the eyes of citizens – by unelected governments, parliaments unable to reform themselves, corrupted parties ‘in re-construction’.

originale postato su demata