No, the euro was not saved at last week's summit meeting of the European leaders in Brussels. "We will not get a second chance to save the euro," French President Nicolas Sarkozy warned dramatically on the eve of last week's summit. Saving the euro, however, was not Sarkozy's chief concern. His concern was that enough time be bought until May 6, 2012, when he is seeking reelection.

In the next five months, several countries of the eurozone must refinance large parts of their public debt. But none need more money than France and Italy. France needs to refinance a staggering €177.7 billion ($237.9 billion); Italy, a country in which French banks have invested heavily, needs to find €179.9 billion ($240.8 billion). Raising such sums at a time when Europe is confronted with a severe capital dearth seems almost impossible.

Last Friday, the leaders of the eurozone – the 17 countries which use the euro as their currency – plus a few other of the remaining ten European Union (EU) countries who do not belong to the eurozone, decided to give the IMF €200 billion in bilateral loans.

The Europeans expect that non-European nations – such as China, India, Russia, Brazil and the US – will lend the fund an equal sum. This will then allow the IMF to help European countries in need to tackle their debt problem. The combined Franco-Italian refinancing needs until late April – €357.6 billion – broadly correspond with the amount Europe hopes to receive through the IMF. The IMF is headed by Christine Lagarde, Sarkozy's former Finance Minister. It is obvious that when Greece, Ireland, Portugal, Spain, Italy and France come knocking at her door, the funds will first go to France and to Italy.

IMF assistance, together with the money still available in the EU's bailout fund EFSF – some €250 billion – and a new European bailout fund in the making, the European Stability Mechanism (ESM), must allow the Europeans to avoid catastrophe. At least for now.

Sarkozy and the German Chancellor Angela Merkel even succeeded in persuading (or rather tricking or bullying) the smaller Eurozone countries into accepting that there will be no national vetoes in the ESM apart from those of France, Germany and Italy. The ESM will have the power to demand extra capital from the eurozone countries without the latter – except for the big three – being able to oppose this.

The political price which the European Union paid for last week's deal was, however, huge. It is not just the eurozone that is in danger of unraveling, but the entire European Union itself.

With the exception of Britain, the EU countries agreed last week to change the EU treaties. The latter was a demand of Sarkozy and Merkel who deem that treaty change is necessary to assure the markets that sovereign debts from eurozone countries are a safe investment. The European leaders agreed that the European Commission, an unelected body of bureaucrats based in Brussels which acts as the executive of the 27 EU states, will henceforth be able to impose stronger controls over individual countries' budgets. These controls include the obligation for EU states to submit their national annual budgets to Brussels for approval before submitting them to their own parliaments. There will also be automatic sanctions for countries in breach of the 3% deficit ceiling. These sanctions include an obligation for the national parliaments of the countries in breach of the ceiling to approve the policies prescribed by the Commission.

David Cameron, the British Prime Minister, was the only EU leader who refused to accept an additional transfer of sovereignty to Brussels.

Cameron's veto made it impossible to just change the existing EU treaty, as Merkel and Sarkozy wanted. Instead, the 26 EU countries other than Britain are forced to write a new, intergovernmental, treaty which applies only to those 26 EU states. The treaty is still to be written, but needs to be ready by late March 2012.

Britain has now effectively been pushed out of the EU's core. Cameron had no choice but to reject treaty change. Accepting would have forced him to hold a referendum in Britain. There is no doubt that he would have lost it.

The matter of the referendum, however, is still haunting the European leaders. According to a strict interpretation of its Constitution, Ireland has to hold a referendum on every treaty that restricts national sovereignty. Ireland's government is currently trying to find a way to wriggle out of allowing the people to vote.

Lucinda Creighton, the Irish minister for European Affairs, said the chance that a referendum will be held "is 50-50." Some legal experts of the Irish government argue that a referendum is not needed for last week's treaty because the obligation not to breach the 3% deficit ceiling was already incorporated for eurozone countries in the EU's 1992 Maastricht Treaty. They say that imposing penalties that an obligation be kept is not a transfer of sovereignty but a measure necessitated by the obligation that was accepted earlier.

The latter is also the argument used by Mark Rutte, the Dutch Prime Minister. Rutte rejected calls to hold a referendum in the Netherlands by saying that the agreement reached last week was but the "completion" of the Maastricht Treaty.

The 3% deficit ceiling makes it hard for European countries to avoid having the European Commission interfere in national budgets. In 2010, of all 17 eurozone members, only three small countries – Estonia, Finland and Luxemburg – were not in breach of the 3% deficit ceiling. During the past ten years, even Germany breached the ceiling 7 times and France six times.

Nevertheless, Cameron's opposition to transferring additional powers to Brussels has made him the target of recriminations by Sarkozy, who snubbed the British Prime Minister by ostentatiously not shaking his hand, and by Merkel, who suggested that Cameron had negotiated in bad faith and remarked that he "was never really with us."

Britain's having been isolated is also leading to tensions in the British government. Cameron's Liberal-Democrat coalition partners are pro-EU and fear that London will lose influence in Brussels. Lib Dem leader Nick Clegg, the British Deputy Prime Minister, said he is "bitterly disappointed" at Cameron's decision to opt out of the EU treaty, which, he warned, could leave Britain as the "lonely man of Europe." A British financial broker commented, however, that Britain is "as isolated as somebody who refused to join the Titanic just before it sailed."

Moreover, Britain might not remain isolated. The Czech and Swedish leaders have not signed last week's agreement. They say they will only do so after consulting their parliaments. Even the leaders who did sign the agreement to have the treaty changed will need to have that treaty ratified by their parliaments before it becomes legally binding. Dutch Prime Minister Rutte said that he and his colleagues explicitly pledged to act "as if" the treaty has already been ratified. However, unless the treaty is ratified none of the governments which succeed the present ones is bound by these pledges to act "as if".

Even Merkel will have to confront the Bundestag, the powerful German parliament. She also has to take the hurdle of the German Constitional Court which will most certainly not allow the Commission in Brussels supremacy over the Bundestag concerning fiscal policy.

The Finnish Parliament has already announced that it opposes the loss of a Finnish veto in the ESM. And whether the Irish Parliament will acquiesce in not holding a referendum is far from certain. These legal matters, however, will only become hot political issues once the experts have finalized the wording of the new treaty. As that will only be available by April, the unraveling of the framework conceived last week might only start in earnest by May, leaving Sarkozy ample time to secure reelection. What happens next, is not his concern right now. As they say in French: Après nous, le Déluge. ["After us, the flood."]

If Sarkozy is not reelected, however, the euro's days seem definitely over, as both his opponents, the Socialist François Hollande and FN leader Marine Le Pen, have already said that they do not agree with last week's decisions. Hollande, who until last week was leading in the polls, accused Sarkozy of "yielding too much to Berlin" and "caving in to the Germans," while Sarkozy clearly hopes to boost his popularity by bashing the Brits. Who do the French loathe most – the Germans or the English? Is that the question that will decide the fate of the euro and who will be France's next president?

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