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The 27 agree on an à la carte recovery plan

J. Balkenende and N. Sarkozy (credit: CUE - B2 archives, December 2008)
J. Balkenende and N. Sarkozy during the European Council (credit: Council of the EU – B2 archives, December 2008)

(BRUSSELS2) Relaunching the European economy in the face of the financial crisis? The question has already been debated so much in recent weeks that one could wonder what this new discussion was for between the 27 heads of state and government. In fact, serious differences had emerged in recent days between Europeans. And it was important to silence them and give a decisive political impetus to the 'famous' recovery plan.

Faced with serious differences…

The whole discussion actually focused on two points. Should we put a key figure – for example, 1,5% of GDP – or remain vague? Should we write “black on white” the possibility of applying reduced rates of VAT to sectors with high labor intensity (implying construction and catering for example) and for green products. The British defended a general reduction in VAT. The French were in favor of more sectoral public aid and a relaxation of competition rules. And the Germans played the guardians of financial orthodoxy and the pursuit of structural reforms. In other words, a beautiful cacophony in perspective… The whole point of the discussion, which began yesterday and which continues today, is to speak with a united voice, but allowing a wide range of actions. An “à la carte” recovery plan in a way.

…the solution: an à la carte plan

According to " national situations States could choose to: increase public spending, reduce in a “ of "fiscal pressure, reduce social charges, support certain categories of businesses or pay direct aid to households" the most vulnerable ". But no one would be obligated to a particular measure. In order to limit discrepancies, a safeguard is placed. Any measure should aim for an immediate effect, be limited in time and targeted to the most affected sectors (automotive, construction) ". And the " fundamental reforms should be started.

A little flexibility in the control of public subsidies

The 27 had to ask the Commission to be a little more " flexible » in the application of the rules for the control of public subsidies and to speed up the procedures for the distribution of European funds. They should finally urge » banks and financial institutions not to turn off the credit tap. See you next spring, under the Czech presidency, to assess the effects of this recovery plan before the G20 summit on April 2 in London.


Compromise on the Lisbon Treaty

A few hours before the start of the Summit, the presidency put a compromise on the table of the European Council, allowing the entry into force of the Lisbon Treaty, at the latest, by the end of 2009. According to a first text of which I was aware, Ireland undertakes to ratify the Treaty before the end of October 2009. In exchange, the 27 bury one of the key points of the reform. There will be no Commission with a reduced number of commissioners. Each state will keep its commissioner in the next college, appointed next November. A necessary guarantee for Ireland to organize a new referendum. A set of political and legal declarations must finally guarantee the right for Ireland to keep its specificities: neutrality, limitation of abortion, low taxation. Finally, by a legal trick, no country should lose any MEPs during the next legislature. The French will thus have 2 more deputies than would have been necessary. If this plan succeeds, it will not be the least success of the French presidency of the EU...

(Nicolas Gros-Verheyde)

Long version of an article published in Ouest-France between the two summit days

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Nicolas Gros Verheyde

Chief editor of the B2 site. Graduated in European law from the University of Paris I Pantheon Sorbonne and listener to the 65th session of the IHEDN (Institut des Hautes Etudes de la Défense Nationale. Journalist since 1989, founded B2 - Bruxelles2 in 2008. EU/NATO correspondent in Brussels for Sud-Ouest (previously West-France and France-Soir).