21/03/2011

Future Euro stability fund
MEPs ask for community method to be respected

By Lasse Böhm, German Press

A permanent stability fund for the euro

After the mortgage and the banking crisis, some Eurozone countries have increasing difficulties in paying for their debt. With interest rates for bonds shooting up for Greece as well as some other countries of the Euro currency area, Eurozone countries have decided to set up a permanent stability fund, continuing an already existing fund which will expire by 2013. In the future, Eurozone countries experiencing financial difficulties will be able to apply for loans from the Euro Stability Mechanism (ESM), the Heads of Governments of the Euro area Member States decided at a special meeting of the European Council on 11 March.

The community method to guarantee legitimacy

While governments are negotiating the last details, MEPs want to make sure the ESM does not duplicate existing EU institutions. The European Parliament's draft response to the treaty changes necessary to set up the ESM therefore calls for the European Commission to be involved in setting up the future Euro rescue fund. Its author, German EPP Group member Elmar Brok, emphasised the need for the European Council to make clear that the intergovernmental approach used so far does not lead to a duplication of institutions. At most, it should be used as a precursor to placing the new mechanism within the community framework in the future. "An intergovernmental approach means no or almost no parliamentary legitimacy, as well as an incapacity to act in many areas due to the requirement of unanimity," Brok said in plenary.

What changes to the Treaty on the Functioning of the EU?

His report, which was already approved by the European Parliament's Constitutional Affairs Committee and is scheduled to be put to the vote in plenary on 23 March, therefore asks the European Council to either redraft the proposed change of Article 136 of the Treaty on the Functioning of the EU, taking into account the need to respect community institutions, or issue a clear commitment that the ESM's operational features will be decided on the basis of a proposal by the European Commission, which should also operate as its secretariat in implementing and monitoring the stability mechanism. In doing so, it must report back to the European Parliament, the draft report says. While the European Parliament has no formal right to block or modify this treaty change, which is necessary to allow the creation of the ESM in the first place, its opinion is necessary before the European Council can formally adopt the proposal.