Yesterday William Cash MP asked the Speaker to grant an urgent debate on the draft inter governmental Treaty which Mr Cameron declined to sign for the UK last December. The Speaker heard his case. Many of us were in the Chamber signifying our suport for an early debate. The Speaker granted Mr Cash’s requests on its merits. The government declined to oppose the suggestion, so tomorrow we will have our three hour debate.
I was pleased he did so. Mr Cameron is soon off to another summit of EU leaders. It is important that he presses UK concerns. Whilst it is great news that we will not sign this Treaty, it is important that the 25 signatories do not seek to use EU institutions to enforce their proposed Treaty in any way that inflicts loss or duties on the UK. The UK is raising legal questions about how such a Treaty of the 25 would work, given that the 27 are the custodians of the EU institutions and of the EU Treaties. Can they use the EU institutions at all, when two members of the EU have declined to accept this draft Treaty?
The debate needs to go wider than these important legal and constitutional issues. The truth is the Treaty of the 25 is in trouble. The French socialist candidate for the Presidency has said he wishes to renegotiate the Treaty. The re are rumours that incumbent President will offer a referendum on it. The Irish have now said they would need a referendum. Instead of this Treaty being a quick fix for the Euro, a rapid dash to stronger controls over Euro member budgets, it is in danger of becoming a long running constitutional saga which could help to unmake governments and thrust more antagonism between governments and their electors.
The draft Treaty, even with an easy passage, was never going to resolve the Greek crisis, for example. It is all well and good the EU or a group within the EU telling Greece to spend less and tax more, but they have been saying this for years and it has not happened. Saying it under some new powers in a new Treaty, and threatening to fine Greece if she does not comply, is bizarre. As Greece has run out of money and has to borrow so much from other Euro states and the IMF, she would have to borrow the money from them to pay the fine. How would that help?
Much of the ground in the draft Treaty is reminiscent of the old Growth and Stability Pact all Euro members were meant to follow. It is similar, but Germany claims there are new enforcement procedures and sharper focus to the fiscal union in the draft Treaty than in the existing Treaties for Euro members. It looks as if Germany’s insistence on greater clarification and enforcement of fiscal union rules will create more dislocation in the churning politics of Euroland. Meanwhile Greece has promised to have an economy growing every year from next year to 2020. If it does manage to do so, it will once again fail to hit the deficit reduction targets that it has promised to meet before.
The EU awaits nervously as private holders of Greek bonds make up their minds whether to accept the new much reduced terms for their bonds. They wait nervously to see if Greece can at last find policies which simultaneously cut spending, increase taxes and promote growth. They watch to see if the contagion might spread to Portugal. And now with baited breath they contemplate what the voters might make of their latest fiscal union ideas, given that it looks as if somewhere in the union a referendum will be held on it if the Treaty survives to ratification.