Untangling the knots

The EU “has met the worldwide financial crisis with united resolve and has done what was necessary to safeguard the stability of the Economic and Monetary Union”. These are the opening lines of the “Conclusions”: the document on the decisions taken during the meeting of Haeds of State or Government held past June 17. Remarks mostly focused on the taxes on banking institutions and transactions, to the benefit of European and global market recovery. Moreover, the 15-page document (at www.consilium.europa.eu) also delves into other issues addressed at the Council: Europe 2020, economic governance, G20 Toronto summit, the UN Millennium Development Goals meeting, the “Europe 2030 project” on the future of the EU, the European Pact on Immigration and Asylum, the Declaration on Iran’s nuclear program.Progress in governance. European Council President Herman van Rompuy commented on the outcome of the summit displaying a certain degree of optimism. Van Rompuy explained that the Council gave the green light to the Europe 2020 growth strategy (“that will set things in motion in the real economy”), took a decision on the principle of bank levy and on international financial transactions that will be presented to the G20 in Toronto (although several countries have already expressed their opposition, including Canada, where the meeting will take place next June 26-27). Regarding public finances the objective is “to step up stability” notwithstanding the “situations at national level”. Steps forward were made as relates to economic governance on which the Commission is due to submit specific proposals (several items on the agenda were postponed to the Community’s upcoming meetings). “The European Council – made known the Belgian politician – decided to open accession negotiations with Iceland and confirmed, “Estonia will adopt the euro”.Rigor and development. “Fiscal consolidation is essential for innovation, growth and employment”. The “unanimous endorsement of the Europe 2020 strategy is a fundamental step”. Commission President José Manuel Barroso drew the final balance of the summit in conjunction with Van Rompuy and Spanish President José Luis Zapatero, EU President-in-Office. “There has been an agreement on some of the most important orientations in terms of economic governance” following the proposals put forward by the Executive. “We will submit further proposals” in the coming months. Barroso broached several issues, which include: the “stress testing” of banks, the financial supervision package (“the mandate agreed today gives us a clear and united European position for the G20”). Concerns were expressed over Belgium’s upcoming rotating Presidency (from July 1st) (after the June 13 elections Belgium is busy putting together a stable political government coalition). In the Conclusions, EU27 governments unanimously and harmoniously write: “we adopt Europe 2020, our new strategy for jobs and smart, sustainable and inclusive growth”; “we reaffirm our collective determination to ensure fiscal sustainability, including by accelerating plans for fiscal consolidation where warranted”; “we confirm our commitment to ensuring financial stability”, both at the level of the EU and at the G20; “we fully agree on the urgent need to reinforce the coordination of our economic policies” and “We agree on first orientations as regards the Stability and Growth Pact and budgetary surveillance as well as broader macroeconomic surveillance”. On this issue, the final report of the Task Force chaired by Van Rompuy will be sumitted in October. “Evanescent” targets? The Conclusions fix the 5 EU2020 targets, which are: raising to 75% the employment rate for women and men aged 20-64; improving the conditions for innovation, research and development in particular “with the aim of raising combined public and private investment levels in this sector to 3% of GDP”; reducing greenhouse gas emissions by 20% compared to 1990 levels; increasing the share of renewables in final energy consumption to 20%; and moving towards a 20% increase in energy efficiency. Finally: improving education levels, in particular by aiming to reduce school drop-out rates to less than 10% and by increasing the share of 30-34 years old having completed tertiary or equivalent education to at least 40%”; promoting social inclusion, in particular through the reduction of poverty, “by aiming to lift at least 20 million people out of the risk of poverty and exclusion”. However, despite the good intentions, the last two items are implemented to the national governments’ discretions. Hence, these are rather evanescent targets.