Three important results

The diplomatic patience of Herman Van Rompuy; the “European” voices of José Manuel Barroso, Martin Schulz, Mario Monti and Mario Draghi; the fist-banging on the table of Nikolas Sarkozy and Angela Merkel. Not to mention the disengagement, though comparatively low key, of the UK and the Czech Republic; the doubts expressed by Poland, Holland, Finland and Luxembourg; the concerns of Greece and Spain; and the perplexities of various states in Eastern Europe. The European Council of 20 January thus had many co-protagonists, each playing a different part, each singing a different tune, but in the end the hoped-for results were almost all achieved. The final documents, solemn declarations, new and future treaties, percentages and index numbers show, in substance, that after having touched its nadir at the end of 2011, the EU seems now to have its foot on the accelerator once again.Important results. The summit produced three main results. First, agreement was reached on the “Treaty on Stability, Coordination and Governance in the Economic and Monetary Union” – known as the “fiscal compact” – which will be signed by 25 countries (excluding the UK and Czech Republic) at the next summit on 1-2 March and, after having been ratified by at least 12 countries of the Eurozone, will come into force on 1st January 2013. Its task is precisely to define the commitments that each state will have to make to attain, or at least strive towards, the golden rule of zero budget deficit, and thus to confer sustainability on national accounts and on the Eurozone as a whole. A complex mechanism of mathematical calculations and sanctions for infringements, or excessive deficit procedures, is planned to regulate the Treaty’s implementation. The second result is the decision to accelerate the entry into force of the European Stability Mechanism (ESM) in July 2013. Also during the next European Council in March, the overall ceiling of the ESM will be established; it could vary between 500 and 750 billion euro. Agreement having been reached on the “fiscal compact”, the Germany of Chancellor Merkel could soften its own position and give the go ahead to a fund far more substantial than the estimated 500 billion, so as to create a stronger instrument for the defence of the Eurozone, building a firewall round the single currency and protecting national budgets from speculation on the financial markets. On the situation of Greece – an issue closely correlated with monetary stability – the discussion was brief, “more informative than decision-making”: discussion on the problem will resume in February-March.Development, jobs. The third salient point of the Council, which also represents the real novelty of communautaire policy in recent months, is the definition of an overall strategy for growth and jobs. A seven-page document on the matter came out of the Council: though it leaves open many questions that remain to be defined in March, it shows a renewed willingness to act in concrete in various directions: youth employment, single market, support and financing of small and medium enterprises (SME). The document also contains some important appendices on green economy, energy, and the use of cohesion funds (of which some 80 billion euro remain to be invested in the months ahead). In its chapter on jobs the document affirms that “in Europe today there are over 23 million unemployed. If growth rates are not improved, unemployment will remain high”. That means “intervening concretely to overcome the imbalance between demand and supply of skills and geographic imbalances”. Steps must also be taken to “reform labour markets and tackle labour costs in relation to productivity”. The question is one that falls under the competence of member states, and each country will be called to define a national reform programme. But the EU can support these efforts. Various policy options are recommended at the continental level: boosting “efforts to promote the first working experience of young people and their participation in the labour market”, with the objective of helping them to find a first job “within a few months” after leaving school; increasing “in a substantial manner the number of apprenticeships and training schemes”; adopting measures to curb school dropouts; and fully utilizing the EURES professional mobility portal. The EU will support these aims with various measures, including the reinforcement of programmes for professional and higher training, a different use of the European Social Fund, and the full and reciprocal recognition of professional qualifications.Single Market and businesses. As further regards EU growth strategy, emphasis is being focused on the Single Market, which “represents a fundamental motor for economic growth”. Clear commitments are established to this end: e.g. the reinforcement of the digital single market, the reduction of the bureaucratic costs that are burdening businesses, the accord for the simplification of book-keeping obligations by the end of June 2012 and that on the simplification of regulations on public bids for tender by the end of the year; the “modernization of the European regime of intellectual property”. There follows a chapter on the need to boost investments in SMEs, given that the current “contraction of credit seriously limits the ability of businesses to boost growth and create jobs”. In this case, a positive role can be played by the ECB, the European Investment Bank and a different use of structural funds.