Economy Euro zoneEuropean policy

Holland says “yes but” to Merkel. Its “European Initiative”. Our comments (updated)

(BRUSSELS2) The French president presented yesterday (May 16) during a formal press conference in Paris the desire to go on the "offensive", particularly at the European level. Her " european initiative “has a goal” to get Europe out of the languor that grips it and to reduce the disaffection of the peoples which can only compromise the very future of the European Union”. I am not sure that his proposals meet all of these objectives. They are not totally original and “mind-blowing”. But they have the merit of putting the Franco-German couple back at the heart of the negotiation game.

The cyclist's observation

F. Hollande thus takes up the observation of the cyclist dear to Jacques Delors – who was one of his mentors in politics – and wants to create a new movement. “ The European idea demands movement. If Europe does not move forward, it falls or rather fades away; it is disappearing from the map of the world, it is even disappearing from the imagination of peoples. It is therefore high time to carry this new ambition.”

The elements of a new intergovernmental discussion

This initiative is based on 4 proposals: economic government and budgetary capacity for the Euro Zone, plan for young people and investment plan, European Community for energy. 4 points which are not automatically totally innovative in the French position but appear a bit like the conditions of a new European negotiation. Because, at the same time, the French president clearly says “yes” to the German Chancellor's proposal “for a political Union”. A new tone which can provide, according to the classic European give-and-take strategy ('I accept what you ask, you accept what I want'), the elements of a new intergovernmental discussion.

A political union: an old German demand

Political Union, this “new integration step“, Berlin has advocated it with its wishes. For several months (several years), the main German leaders have been scolding him in every tone. France has so far reserved its response, contenting itself with dilatory responses. François Hollande responds today: rubbish! Let’s go…”France is ready to give content to this political Union“giving oneself”two years to get there“. Two years, "whatever governments are in place” he takes care to specify.

  • NB: A small point intended to emphasize that if it is not with Merkel in the CDU-FDP version that the president will negotiate, it could be with Merkel in another configuration (CDU-SPD or CDU-SPD-VERTS) or another chancellor (SPD-GREEN). A few days before the French president's visit to the 150th anniversary of the SPD in Lepizig is not entirely innocent... “It is no longer a matter of political sensitivity, it is a matter of European urgency.”  He added.

An economic government for the Euro Zone: an old French request

This “economic government” would meet, “every month“, around a “real President appointed for a long term and who would be assigned to this sole task".

  • NB: In October 2011, the “27” decided to create this function but by aligning it with that of the President of the European Council, same date of appointment, same duration of mandate… Without going so far as to indicate that the people were the themselves, it was an implicit incitement to the merger of the two positions. The “budgetary” Treaty (on stability, coordination and governance within the Economic and Monetary Union) had ratified this creation by indicating a minimum of two meetings per year. The “Hollande” proposal therefore assumes that this president is different from the president of the European Council, has a mandate of 5 years (and not 2 and a half years renewable once) and a more sustained frequency of meetings. This separation of the two positions would have advantages: avoiding any pre-eminence of the Euro Zone over the future choice of the President of the European Council or, conversely, for the Euro Zone to “suffer” a president “from outside the Euro Zone. It would have one disadvantage: multiplying the number of positions. Or else this “president of the Eurozone” should also chair the councils of ministers of the Eurogroup.

This economic government would have four functions:

– debate “ of the main economic policy decisions to be taken by the Member States” ;
- " harmonises(r) taxation » ;
– start to “ make an act of convergence on the social level from above” ;
– initiate a plan to combat tax fraud.”

  • NB: economic government for the Eurozone is a French antiphon. We remember the will displayed by President Sarkozy during the French presidency of the EU in 2008 and afterwards. But this idea is present in the French political corpus well before. President François Mitterand had already expressed this very clearly during the opening in Rome, in 1990, of the intergovernmental conference, which should govern the establishment of the Maastricht Treaty. “ If the IGC responsible for this economic and monetary union reaches the conclusion that a currency is needed (…) it will inevitably be forced to conclude that there is a need for an economic government of Europe " he said.

A budget for the Euro zone

A budgetary capacity “would be attributed to the euro zone” and the possibility, “gradually, to raise the loan” asks F. Hollande. NB: A proposal that he ranks in his speech in 4th position. We brought it back into the logic of economic government in 2nd position. The point is, in fact, much discussed and disputed. Berlin but other capitals were not very keen on this proposal at all, even hostile.

A plan for the integration of young people

The European financial framework, the European budget has already provided six billion euros for youth employment.” For the president it is necessary “mobilize immediately, even before the financial framework is in place for 2014, part of these funds so that we can come to the support of all the young people of Europe who, today, are struggling to find training or a use“. In addition, Europe should define “an investment strategy, particularly for new industries and for new communication systems".

  • NB: we are, here, in a fairly classic European scheme, the European Social Fund like the Lisbon strategy had already indicated youth employment or new communications systems as priorities. We are simply waiting to see what this “new investment strategy” means.

4° A “European Energy Community”

This “CEA” would be intended to “ coordinate all efforts for renewable energies and succeed together – while Europe has countries that do not have the same energy policies – to ensure the energy transition”.

  • NB: This is a campaign promise from President Hollande. But there is a fundamental division, often expressed in Brussels, on nuclear power. A point which opposes, again, Berlin and Paris. We can also only be severe. What a waste of time! Ten years ago, the ECSC, the European Coal and Steel Community, was allowed to bury itself, under the pretext that “coal is the past”. And that the existing Community instruments were quite sufficient. The ECSC, however, had quite innovative instruments (levies on producers, reinjection into capacities and training) which the current European instruments did not have and still do not have.

(Update) Addition of additional information on economic governance. And reminder of the budgetary treaty.

Download thespeech by President Hollande

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).