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26 versus 1 — really?

14 December 2011

7:34 AM

14 December 2011

7:34 AM

Judging from much of the coverage in UK media, you would be forgiven for thinking that Britain is
on the fast track to becoming the North Korea of Europe — eccentric and completely isolated from the rest of the world. Indeed, the media narrative over the past couple of days has largely
treated the agreement reached at the summit as concrete, supported in full by everyone apart from Britain. Or ‘27-minus’, as Commission President Jose Manuel Barroso put it.

The reality, of course, is quite different. Leaving aside whether Cameron could have played his
cards better (he could have), as Gideon Rachman
pointed out
in yesterday’s FT, ‘the picture of an isolated Britain’ will become blurred as the rest of Europe grapples with the Merkozy deal.

So let’s have a look at the level of support in cabinets and parliaments around Europe, for the deal’s main points: fiscal integration, stricter EU budget rules and sanctions, new rules
for the euro’s permanent bailout fund (the ESM) and fresh cash contributions to the IMF.

France. For all the Sarkozy rhetoric, his main rival, the Socialist candidate Francois Hollande, leading him by 18 per cent in a hypothetical second round clash, has said that: ‘If I’m
elected president, I’ll renegotiate this deal…to add to it what it lacks today’, being particularly critical of constitutional limits on budget deficits.

Germany. Scratch the surface and the Germans aren’t overwhelmed either.
In addition to the deal being seen as an insufficient to solve the crisis, the Bundesbank has warned that the proposed new IMF contributions could take Germany above the
‘bailout’ ceiling established by the Bundestag.

Denmark. The Merkozy deal appears to have split the newly-elected Danish centre-left coalition. Danish Foreign Minister
Villy Søvndal (of junior coalition partners the Socialist People’s Party), and PM Helle Thorning-Schmidt ( Social Democrats) have been accused of contradicting each other over whether the
pact could restrict the government from pushing through its economic programme. The agreement is now pending analysis and approval in Folketinget, which will also consider whether a referendum is
required (it’ll most certainly be avoided). A poll this week found that 54 per cent of Danes want the pact to go to a public

Sweden. The Swedish minority government looks unlikely to get the necessary majority to get the package, as it stands, through the Riksdag. The leader of the opposition Håkan
Jurholt has warned against becoming euro members ‘via the backdoor’. The centre-right coalition
remains split on the issue, with PM Fredrik Reinfeldt saying that it would be a ‘bit strange’ for the country to join. Meanwhile, Swedes are becoming increasingly sceptical. A fresh
poll out this week shows that over 80 per cent of Swedes would vote ‘No’ to the euro in a referendum, compared to 42
per cent two years ago, while support for EU membership has dropped from 55 per cent to 47 per cent in a year.

Poland. Opposition parties Democratic Left Alliance and the Law and Justice parties have warned that the deal would violate the Polish Constitution, and therefore needs a two-thirds majority
in both houses of the Polish Parliament, which is far from guaranteed. Law and Justice has even threatened to over-turn the agreement once in power (which, it should be said, can be a while). The
government maintains that the pact actually won’t impact on Poland until it joins the euro.

Finland. The Grand Committee in the Finnish Parliament has launched an inquiry
into whether the country’s Prime Minister Jyrki Katainen potentially over-stepped his mandate in the negotiations in Brussels last week. In its current form, the deal is unlikely to pass
Parliament as the majority rule for the activation of the ESM (meaning Helsinki will be stripped of its veto over future bailouts) will require a two-thirds majority in the Parliament to be
compatible with the country’s Constitution. Such super-majority looks unlikely since the main opposition parties the Centre Party and the Finns (previously ‘True Finns’) both
oppose the deal.

Czech Republic. Prime Minister Petr Necas told the Czech press, ‘It wasn’t possible to sign up to this
international agreement for a number of reasons. But the main reason was this – nobody knows what’s in it’, saying that the deal will need approval form his Parliament. In addition, the
Czech Finance Minister Miroslav Kalousek yesterday said that the suggested additional IMF contribution is ‘extremely high,’ estimated by the Czech Central Bank to be equal to 10 per
cent of official Czech reserves, something echoed by Czech President Vaclav Klaus.

Hungary. Hungarian PM Viktor Orban will let the Hungarian parliament decide whether to agree to the deal, although with his Fidesz party enjoying a solid two-thirds majority, he
could in theory easily push it through should he want to.

Netherlands. The situation is not fully clear, with the Social Democrats appearing to have
on their previous request for early elections to be called if further transfers of sovereignty to the EU were to take place under last week’s agreement. With the Social
Democrats, the government would have the majority needed to push through the agreement.

Ireland. Ireland will decide whether it needs to be put the agreement to a referendum when the details of the agreement are clearer (probably March), with chances for a vote seen
as 50-50. Deputy PM Eamon Gilmore also said that ‘I believe there will be a lot of discussion on that between now and March. I will be surprised
if Britain is not involved in that discussion’.

The Finance Ministry has said that the country will not
to the agreed €200 billion IMF capitalisation, even though the country is a member of the eurozone.

So is it fair to reduce this myriad of opinions and political positions to a 26 versus 1 discussion? You decide.

Mats Persson is director of Open Europe.

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