Are we now going to have a EU referendum?
May 21st, 2010Who would have thought that the stresses and tensions between the Cons and the Libs would have been exposed so mercilessly so quickly? Angela Merkel, having to expend on behalf of Germany 20% (Euro 150bn) of the colossal Euro 750bn ($1 trillion) Greek bail-out, understandably is now demanding that there should be quite fundamental changes in the Lisbon Treaty to ensure that fiscal irresponsibility by one State cannot in future drag down the whole of the Eurozone.
Germany has already tabled a 9-point plan rewriting the Euro regime so as to embed legally sanctioned budget deficit ceilings in all the 16 member Eurozone States. At the heart of this is a new enforceable Stability and Growth Pact which is designed to achieve budgetary rigour to prevent any State exceeding certain deficit ceilings. This has of course been tried before to ensure that the more easy-going budgetary practices of the South of Europe were kept more in line with the stricter rules of the North – only to fall apart when both Germany and France exceeded the limits, but then because of their political muscle went unpunished. It’s a fair question whether this newer version will fare any better. But there’s a sting in the tail. (more…)
