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Europe: A timetable for a turning point?



Europe: A timetable for a turning point?

It is to be hoped that the events on the agenda for the second half of June 2012 will lead Europe and the G20 international community will find unity of intent. The goal is to draw up a road-map for economic governance and, where the European Union is concerned, the completion of the political integration process.

“Europe must open up new prospects for a recovery of economic growth and social justice”. These were the words of the Head of State, Giorgio Napolitano, after a meeting at the Quirinal Palace with the French President, François Hollande. “This must go hand in hand with agreed and shared budgetary discipline and steps leading to a process of fiscal union”. The European Council at the end of June will express “a firm and concrete determination to consolidate what has been a vital gain for Europe: the euro”

Saving the euro

The decision-making processes to save the European currency are in fact picking up pace. Indeed, both the Italian Premier, Mario Monti, and President Hollande, who met yesterday (14 June 2012) in Rome, spoke about Eurobonds and stable mechanisms to protect the euro from speculation.

The French President said he will not accept half measures, while Monti added that although a great deal has already been done it is not yet sufficient to shelter the EU from market turbulence.

A significant signal has arrived from the European Commission. At the G20, the EU will place the emphasis on its “determined action to deliver a comprehensive response to the sovereign debt crisis”, states the EU Commission’s spokesperson. At the same time, it will ask its partners for “a strong impulse for rebalancing the global economy”. It is in the institutions, therefore, that unity of intent and convergence on the new rules that serve to protect the single currency should be sought while at the same time opening up the road to growth.

The timetable

The dates in the agenda are significant. Sunday 17 June will see the outcome of the elections in Greece – a second vote, after that of 6 May. This result could be a decisive factor on whether or not Athens remains in the euro and in the Union.

On Monday 18 and Tuesday 19 the world’s leading economic powers will meet in Los Cabos, in Mexico

Next, on 22 June, President François Hollande, Chancellor Angela Merkel and Premier Mariano Rajoy will be in Rome as guests of the Italian Premier, Mario Monti. The four will discuss measures to tackle the crisis, in the run-up to the European Council later this month.

Lastly, on 28 and 29 June the Growth Summit will take place in Brussels. Initiatives to boost the recovery and employment, without neglecting rigour and reform, are envisaged.

Merkel’s invitation

The German Chancellor, Angela Merkel, has responded to calls from the other European countries to help safeguard the currency and move towards further integration. She said that Germany’s forces are not unlimited and its partners should not nourish excessive illusions as to its ability to save the euro. In other words, she invited the other member countries to view the stability of the euro as part of the broader issue of international monetary and financial stability that should be the focus of the G20. In essence, the major global powers must take responsibility for what is a global “system-level” crisis.

Whatever decision is taken on economic governance, it can only be formulated if there is a political will to do so. But many questions remain. Are the conditions in place to ensure that the remaining time before the European Council is used to put the question of political union and cohesion back on the table? How do we get to that point, given the weight of national interests, domestic political pressures, and an inability to take rapid, effective decisions?

More Europe, urges Terzi

“More Europe”, says Minister Giulio Terzi, “is not just desirable. It is a factor that can no longer be put off to a future that is already here and now. In the face of the crisis, there is no national way out. That is just an illusion and the sooner we abandon it the better for all concerned. The road to follow is that of greater integration. Political and institutional, and not just market and monetary, integration”.