GERMAN CHANCELLOR Angela Merkel is coming under increasing pressure from an alliance of European leaders, among them the Taoiseach, to scale back her push for changes to the Lisbon Treaty to recast the EU’s fiscal rulebook.
The schism pits Dr Merkel and French president Nicolas Sarkozy, her key ally, against the leaders of Britain, the Netherlands, Spain, Italy, Ireland and a clutch of other countries. José Manuel Barroso, chief of the European Commission, also opposes a revision of the treaty.
These divisions come as the EU authorities try to craft new systems to prevent a repeat of the Greek debt debacle and destabilising episodes such as the meltdown in the Irish public finances.
Dr Merkel will ask an EU summit on Thursday and Friday to explicitly commit to change the treaty to develop a permanent bailout mechanism for distressed euro countries and new penalties for rule-breakers.
Mr Sarkozy resolved last week to back her call for a narrow revision of a treaty. But other leaders argue that a reopening of the pact could trigger referendums in countries like Ireland and a welter of counter-claims to rewrite other elements of the treaty.
While alignment between Berlin and Paris has pushed treaty change to the top of the EU agenda, other leaders believe it would be unwise to make a specific pledge to rewrite the Lisbon document.
Taoiseach Brian Cowen is at one with leaders who would prefer an open-ended examination of the Lisbon document without any specific promise of change. Others with a similar stance include British prime minister David Cameron, Dutch leader Mark Rutte, Spanish premier Jose Luís Zapatero and Silvio Berlusconi, chief of the Italian government.
EU foreign ministers will review the situation in Luxembourg today at meetings in which they will also receive briefings from European Council president Herman Van Rompuy, summit chairman.
There are two strands to Dr Merkel’s proposal. First, she wants to empower the EU authorities to suspend the EU voting rights of governments that persistently break European budget rules. This is particularly sensitive for Ireland as granting new power to suspend democratic voting rights would amount to a transfer of new competences to Brussels. As such it would be very likely to require a referendum.
Dr Merkel’s second proposal is to set up a permanent rescue scheme when the three-year lifespan of the €750 billion emergency fund set up last May ends. She says governments should also have the option of entering an “orderly national insolvency” procedure under which they could renegotiate their national debt.
There is some discussion on whether this could be achieved by inserting a statement into the treaty that such supports do not amount to a technical infringement of the legal ban on EU bailouts for member states. Some legal experts believe that might not require a referendum in Ireland.
