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Britain and other European Union countries put their weight behind Franco-German calls for tougher eurozone rules at a summit today (29 October), agreeing on "limited" changes to the EU's main treaty in return for a cap on the EU budget.

Officials struggled to deliver the message that legal tricks could accommodate both Germany's push for treaty change and conflicting calls from several other countries which had rejected the idea. Regarding treaty change, the key word is "simplified", officials explained. A simplified provision, enshrined in Article 48, Section 6 of the Lisbon Treaty, allows member countries to unanimously adopt a decision amending all or part of the main elements of the Treaty on the Functioning of the EU (TFEU), which governs how the Union carries out its work. Such a procedure would avoid the need to call a constitutional convention, experts explained. In addition, the European Parliament would only be "consulted" instead of enjoying full voting rights as part of the normal co-decision procedure. The changes to the treaty are to be settled by mid-2013, before the expiry of the present emergency fund agreed earlier this year to deal with crises such as the one that hit Greece. The objective is to replace that with a permanent mechanism. The simplified treaty change procedure will not enter into force until it is approved by member states in accordance with their constitutions. Most EU countries are expected to ratify the decision by a simplified procedure in their parliaments. As for Ireland, it remains unclear whether a change effected in this way would require another referendum.

UK Prime Minister David Cameron appears to have been instrumental in forging a deal, lending his backing to Franco-German calls for treaty change in return for keeping a lid on the EU's 2011 budget. 11 member states, including Britain, France and Germany, will send a letter to the European Commission and Parliament today saying that their plans to increase the EU budget by 5.9% in 2011 are "especially unacceptable at a time when we are having to take difficult decisions at national level to control public expenditure". The letter was signed by the leaders of the UK, Germany, France, the Netherlands, Sweden, the Czech Republic, Denmark, Austria, Finland, Slovenia and Estonia. The bloc's finance ministers had earlier voted for a limited increase in the EU budget of 2.9%. "We are clear that we cannot accept any more than the 2.9% increase proposed by the finance ministers," the leaders say in the letter. Cameron argued that a planned increase in the EU budget would cost his country's taxpayers the equivalent of one billion euros. The 2.9% rise would still cost them £435m (500m euros). Parliament to fight back By agreeing to cap the budget, EU leaders set themselves on a collision course with the European parliament, which has the power to approve or reject the proposed budget. Negotiations between the European Parliament and the Council, which represents the 27 member countries, over the EU's 2011 budget kicked off on 27 October (see 'Background'). "If Cameron is prepared to give up the British rebate [...] then we can for sure discuss a reduction of the budget," said Martin Schulz, leader of the Socialist & Democrats group in the European Parliament, speaking to EUX.TV, the European policy news channel powered by EurActiv. "The European budget is not to be compared with national budgets," said Schulz. "There are no own resources. We have no European taxes. We have no own money. It is money coming from the member states. We can make no debts. The British budget must be reduced because there is enormous debt. Europe has no debts," he said.

Less than one year after the watershed ruling from Germany’s Federal Constitutional Court that empowered Germany’s parliament to trump EU law, Germany is using the ruling to force the EU to conform to its will. The issue Germany has chosen to test this extraordinary power not given to any other EU member nation is Iceland’s bid to join the EU. The EU’s decision to consider Iceland as an official candidate was expected to be made in a late March summit, following a favorable recommendation from the EU commission. It was delayed, however, to give the German parliament time to examine the commission’s opinion. For Iceland to be considered as an official candidate for EU membership, several German parliamentary committees must consent to the move.

It is interesting that the first time Germany has forced the EU to consult the Bundestag in an expansion of EU power is in the matter of enlargement—not even if a nation will become an actual member, but in such a trivial matter as whether it will be considered an official candidate. Just look at Turkey’s bid for membership to see how meaningful being an official candidate is. This area of EU power typically doesn’t have a direct impact on any of the current EU members, and so Germany chose to try out its new power in an uncontroversial way. This is apparent by the lack of headlines devoted to Germany’s first use of its national “supremacy clause.” The other heavyweights of the EU, France and Britain, are not calling foul, and none of the other member nations seem concerned that the EU’s enlargement policy was just hijacked by Germany.

EU heads of state and government will have to make difficult choices when they meet in Brussels for a summit on 29-30 October, with uncertainty over when the Lisbon Treaty will come into force having huge consequences for the size of the next European Commission, analysts told EurActiv.

Background: According to pro-EU politicians, Europe is in a "completely new" situation after the resounding 'yes' vote in the second Irish Lisbon Treaty referendum, held last Friday (EurActiv 03/10/09).  At present, 25 out of 27 EU member states have ratified the Union's reform treaty, and the news from Poland is that its president, Lech Kaczyński, will soon sign the ratification by the country's parliament, completing the procedure in that country too.  All eyes are now turning to the Czech Republic, where a group of 17 Eurosceptic senators close to the country's president, Václav Klaus, filed a second complaint against the Lisbon Treaty with the constitutional court in Prague, putting its ratification on hold (EurActiv 30/09/09).  This strategy is seen as an attempt to delay final ratification of the Lisbon Treaty until a conservative government comes to power in Britain, where elections are due next year.  Tory leader David Cameron, who leads comfortably in opinion polls, said that in the event that the Lisbon Treaty is not fully ratified by then, he will call a referendum in the UK, despite the fact that the country has already ratified the treaty in parliament (EurActiv 24/09/09). 

On the one hand, EU leaders can assume that the Lisbon Treaty will soon be ratified and invite member states to submit candidacies for commissioners and other top jobs. Alternatively, they can choose to avoid taking any risks and launch a procedure for nominating a smaller-size Commission under the current Nice Treaty, analysts told EurActiv. 

National Politics and European Integration: From the Constitution to the Lisbon TreatyMaurizio Carbone 0 ReviewsEdward Elgar Publishing, 2010 - Law - 243 pagesThis book discusses the domestic politics of treaty reform in the European Union, from the failed referendums on the Constitutional Treaty held in France and the Netherlands in May-June 2005 to the entry into force of the Treaty of Lisbon in December 2009. The chapters, written by some of the finest scholars in the field of EU/European politics, show how European integration has increasingly become a contested issue in a majority of Member States. Going beyond the view that national governments are the main, if not the sole, driving force in the process of European integration, this book shows that other actors and factors have played a central role in preference formation and inter-state bargaining. These include: political parties, public opinion, the media, presidents, constitutional courts and, more broadly, political systems, ratification hurdles and the general negotiation context. National Politics and European Integration combines empirical analysis and theoretical explanations for one of the most controversial periods in the history of the European Union. This important book will be of great interest for advanced students in EU studies, comparative politics and public policy.« Less

A renowned research institute has suggested that Macedonia change its name to an agreed formula on the day of its EU accession as a means of resolving its ongoing dispute with Greece. As exotic as this may seem, the proposal has already triggered interest and debate in regional media.

The proposal, signed by ESI President Gerald Knaus, has triggered a lot of interest and debate in regional media, the institute notes in a press release circulated yesterday (12 July).

While most Europeans find the Greek position puzzling or irrational, the prevailing political thinking in many capitals is that the EU enlargement process should be slowed down, the ESI paper notes. In this context, the fact that Macedonia's EU bid is stuck is even welcome, the institute claims. Gerald Knaus is categorical in saying that if a compromise between Skopje and Athens is reached, then a referendum in Macedonia will be called. But the Macedonian politicians who may be ready to make concessions over the country's name would do so only on the condition that it would actually ensure the country's EU accession, the ESI director argues. To "square the circle," the ESI suggests making a constitutional amendment in Skopje that changes the country's name now, allowing Athens to support the start of EU accession talks later this year. But the amendment would only foresee the change's entry into force on the day Macedonia actually joins the EU. The proposed constitutional change could read: "All references to the Republic of Macedonia in this constitution will be replaced by a reference to XX (a compromise name) on the day this country joins the European Union." If for some reason Skopje never joins the EU, it will never have to change its name, the ESI paper reads. Knaus also argues that the proposed solution would allow both countries and their leaders to claim victory. In parallel, Greece should promise to allow Macedonia to join NATO under the name FYROM (the name under which Macedonia joined the UN) once the constitutional changes have been passed, he says.

German Chancellor Angela Merkel has pressed EU leaders to accept the treaty change as she fears Germany's powerful constitutional court may raise objections to the €440 billion temporary European Financial Stability Facility (EFSF), agreed in May and set to provide aid to Ireland. While EU policymakers insist the temporary facility and earlier aid to Greece do not contravene the EU treaty's 'no bail-out clause', Berlin is keen to remove any legal uncertainty, with a number of legal challenges currently under examination by the German court.

The treaty change is to take place under a new procedure introduced under the Lisbon Treaty - the simplified revision procedure - allowing for limited treaty changes without the setting up of a convention, on condition that new powers are not transferred from the national to EU level. In the draft conclusions, EU leaders also call on euro area finance ministers and the commission to finalise work on setting up the permanent aid mechanism, including features that could force sovereign bond holders to accept diminished returns on their investments, should a eurozone government be forced to call for aid under the ESM from 2013 onwards. The move stands in marked contrast to aid terms recently agreed for Ireland, under which holders of Irish sovereign debt and senior debt in Irish banks were not forced to accept a 'haircut.' Instead, Irish taxpayers will indirectly pay back the €85 billion borrowed from the EU-IMF for many years to come. Analysts say this move was partially designed to prevent further instability in the European banking sector, with many firms considerably exposed to the Irish market.