EU talks stutter-step toward an agreement
BERLIN -- As European Union leaders try to come to an agreement over a package of measures to stop the spiraling debt crisis — agreed to in advance by the German parliament Wednesday — they are also pushing for steps to bring the continent closer together that some say are actually increasing the divisions in the bloc.
"The European Union has 27 members, not 17 members, and the (other 10) can't be (left) out (of the process)," said Piotr Maciej Kaczynski, researcher at the Center for European Policy Studies in Brussels.
But Chancellor Angela Merkel, whose conservative Christian Democrats unveiled far-reaching proposals for closer integration Tuesday, including a pan-European monetary body, said changes were necessary and it was important to solve the problems of the bloc.
"The world is watching to see if we are ready and able to take responsibility," she told the German parliament Wednesday before the vote. "If the euro fails, Europe fails."
On Wednesday, the German parliament approved a de facto increase of the $610 billion bailout fund, allowing it to be leveraged to bring it to over $1.4 trillion. This frees Merkel's hand at a summit overnight in Brussels to agree to a final deal, one put off at Sunday's summit after already being once delayed.
Even so, European leaders also signaled there might be another delay of what was supposed to be, finally, a deal of all deals at the summit of all summits. Analysts say they expect nothing different of the plodding EU leaders.
"You have 27 national sovereign governments … and all of them subject to domestic pressures," said Ben Tonra, professor of European politics at University College in Dublin. "Getting consensus among 27 is always tough. Plus you have the added nuance of there being the EU core of the eurozone and a growing division between that 17 and the other 10 countries."
The package being negotiated is three-pronged: increasing the European Financial Stability Fund, the so-called bailout fund; providing billions to recapitalize dangerously leveraged banks; and shaving the debt owed by Greece to bondholders to reach an agreement on a second bailout for Greece. This, known as the haircut, could cut up to 50% of Greece's bank debt, if Merkel gets her way.
The details, constantly being renegotiated, are not yet clear. But what is obviously on the table now is the open flirtation between eurozone leaders toward a deeper relationship to save their currency.
"European integration is profoundly in the interests of all member states and deeply connected to their future prosperity," European Central Bank President Jean-Claude Trichet said recently. "For Europe to realize fully its future potential, it needs the right rules and the right institutions. It requires a solid form of governance to ensure that the actions of individual countries are oriented towards the common good."
Still, some complain that is creating more cracks in the European Union, and causing anger and havoc in the process. And it is leaving EU countries outside the eurozone with a conundrum: What to do now. Some countries such as Poland want to make sure they are not excluded. Others such as Britain are split, with some lawmakers calling for a way out.
