Europe is in a 'state of confusion' - leaders are not leading
by our secret columnist in Brussels
Just when clear heads and clarity are needed to guide Europe out of its deepest crisis for generations – muddled thinking, bumbling contradictions and a complete lack of strategy are more apparent than ever. Our resident satirist Schadenfreude is growing tired of the leadership vacuum
The European Central Bank wants to change its policy and buy national bonds. Its intervention would, it is said, help to stabilise borrowing rates which are at risk of becoming unsustainable. But there seems to be uncertainty about whether this would be a planned and preventive operation or one activated only when the rates begin to blimp.
In any case, Germany does not want the bank to finance government borrowing. But the ECB, in common with central banks under European Union rules, is independent of governments and it is anomalous for it to be given official advice on its operations. The German government would not dream of telling the Bundesbank how to behave. If the ECB listened to Germany, even for very good reason, it would be regarded as selling out. You really cannot have it both ways.
Now the German government is also reportedly pressing for oversight of fiscal deficits to be switched form the European Commission to the European Court of Justice. This makes no sense whatsoever. Unlike the commission, the court does not act spontaneously. It receives a complaint and conducts judicial review of the facts and allegations presented to it by both sides.
One of the principal sources of complaint is the commission, which assembles the evidence that it submits to the court. In other word someone, normally the commission has to know all about the situation in question and to assess whether there will be a case to answer. Or perhaps Schadenfreude has got it all wrong and Germany simply wants deficit countries to be fined for their recklessness. No big deal - this is part of the fiscal compact under which the commission can impose a fine, which stands unless a majority of member states opposes it.
In Brussels jargon, this is a 'reverse majority' since normally majorities are for commission proposals. It has been said before that nobody understands how a fine large enough to be a deterrent can help a country that is in difficulty to recover. Maybe it is the relaxations of August that are responsible for a lack of clarity. Only another week to go for normal business to be resumed, assuming there is no catastrophe in the next few days.
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