Response to crisis should go beyond euro

The eurozone must realise the promise of the single market.

There are moments in the life of the European Union when the protagonists appear to be on automatic pilot. They move through well-rehearsed routines, fulfilling their stereotyped roles. Our readers know, before they get beyond the headlines, that the position of Poland will be X, the concerns of France will be Y, MEPs will be worried about Z, and the European Commission will be bleating plaintively that it deserves the credit, not the blame.

But so acute is the eurozone’s current crisis, that a dislocation is possible. The member states, the European Parliament and the European Commission just might be jolted off their usual tracks. In the course of the next three weeks, up to the European Council of 28-29 June, the likes of Germany, France, Spain and Italy, will have to weigh up very seriously where their best interests lie.

Germany in particular has consistently stuck to some very clearly elaborated principles about public finances, about the proper role of the European Central Bank and about what is and is not permitted by the EU’s treaties. Chancellor Angela Merkel must decide what compromises, if any, are either desirable or possible in the light of the eurozone’s difficulties.

Similarly, France, whose principles are less clearly elaborated but whose instincts are no less deeply engrained, will have to decide whether it can support greater fiscal union for the sake of the eurozone. An acute appraisal of the options is required. Unthinking reflexes are inappropriate to the context of crisis.

It helps perhaps that the rest of the world is also in economic turmoil. The sense of danger ramps up the sense of expectation. It becomes permissible to take risks and to contemplate extraordinary steps.

Not that there is any guarantee of success: it may yet be that the member states have woken up too late to the gravity of the situation. By the time that the European Council arrives, it could be that a succession of bank-runs has de-railed those ideas for fiscal union, whose gestation has been so painful and whose birth is overdue.

But if the member states are given the chance to respond creatively to the crisis, they must do more than the bare minimum.

The EU has to exploit this moment when everyone is so acutely aware of how much is at stake. The creative crisis thinking should not be limited to arguing about a banking union, Eurobonds and a super-regulator. Herman Van Rompuy, the president of the European Council, has to call the bluff of the national governments and break through various deadlocks on legislative proposals.

High on the list is the energy-efficiency directive, which Van Rompuy himself recently cited as an example of a measure to boost innovation and economic growth.

A final round of negotiations for a first-reading agreement is scheduled for next week. The member states are trying to water down the proposal and its binding measures, which makes a nonsense of all the rhetoric about a proposal that is supposed to be good for the environment and the economy. The way the member states are heading, its effect on both will be limited. The heads of government should call the sectoral ministers to order.

The proposal for a European patent is another item, supposedly of great economic importance, where the national governments have failed to live up to their own rhetoric. The competitiveness council was deadlocked again last week. On this issue in particular, habits are deeply engrained. But if the current economic crisis is not sufficient to force a re-think, when will it ever happen?

Patching up a fiscal union will not in itself be enough to save the eurozone economy. If the eurozone is to flourish in an ever more competitive global economy, it must realise the promise of the EU’s single market. Van Rompuy and José Manuel Barroso, the Commission president, must seize the moment, before normalcy reasserts itself.

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