Angela Merkel Wants To Reform EU Charter By 2012

BERLIN (Reuters) - German Chancellor Angela Merkel is seeking to speed up reform of the European Union treaty and wants all 27 EU member states to give their approval by the end of 2012, government sources said on Sunday.

Merkel won a victory last month in getting the EU to consider amending the Lisbon treaty, which took more than eight years to negotiate, arguing it was necessary if the bloc was to set up a permanent system for handling financial crises.

Herman Van Rompuy, the president of the European Council, is due to report back in December on how limited treaty change proposals might be carried out. The initial aim was to get the amendments ratified by all member states by mid-2013.

Now Germany wants concrete proposals to be ready at the latest by spring 2012, so that a so-called government convention can be agreed.

"The government is pushing for a limited amendment to the treaty to allow greater influence over states that bust budget rules and agreed obligations on stability and consolidation," a source told Reuters. "This should be done and dusted by the end of 2012."

Many of the EU's 27 member states are opposed to altering a charter which they struggled to ratify and fear difficult referendums on further change.

Some states also believe more stringent action can be taken against profligate euro zone members without changing the charter.

Merkel has suggested she would like to see the EU have the right to interfere in national budgets in extreme cases where euro zone stability is put at risk. But Germany has stopped short of that in its proposals and asks rather for sanctions for those that breach deficit rules to be written into the treaty.

This would involve the right to challenge states at the European Court, to have their budgets declared void, without meddling further in the details.

Under the German proposals, the EU commission would also play a stronger role in monitoring budgets.

(Reporting by Andreas Rinke; Editing by Andrew Heavens)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[Kush Patel]

10:28 PM on 11/14/2011

sounds scary... www.360slim4free.com

[OPeixe]

11:10 AM on 11/14/2011

Another depressing Monday, is certainly not going to help anyone.

All those fears from Americans, and some British, that Germany is taking over Europe, of the new Reich are absolutely ridiculous, based only on your own propaganda, and the twisted thinking that the US will do better with a broken Europe.

Nobody feels like that in Europe, Merkel is in a role I suspect she never wanted, but the circumstances are what they are, and really some one needs to start thinking on the future, I mean the future after the crisis.

She represents the right wing in Europe, she represents the interests of the currently stronger nation, and still she only insists in the necessity of having a strong Euro, not leaving any country, not loosing basic social benefits, and maintaining the conservative economic policies that are at the core of the EU.

Considering the long history of Europe, does any one really think we won't come out stronger from this?

[CologneCitizen]

04:54 AM on 11/14/2011

Angela Merkel is one of the few Europeans at the helm that is able to show leadership. She will not say what people want to hear, but rather what she thinks is right that has to be done. Amazing that in this day and age, so many posters here live in the past with all the WW2 rhetorics about domination and the lost war. At least she is determined to do as much as she can for her electorate and the German people. Can you say the same about Obama ?

[Richard Bartholomew]

07:49 AM on 11/14/2011

'Can you say the same about Obama?'

I can't.

[FogBelter]

01:24 AM on 11/14/2011

I'm sure the whole of Europe wants to be ruled by Germany and France.

[Michael GE]

10:23 AM on 11/14/2011

Have you read the entire article or even better read the full proposal? It's about giving all nations the chance to challenge disruptive budgets at the European Court (which is not governed by France and Germany).
Actually, that is the opposite of what you claim, because now the sanction mechanism is solely in the hand of the EU Council and thus it's pure politics and you need far reaching consensus among the member states. That hasn't worked, as Germany and France who were the first to breach the stability covenant but avoided being sanctioned, demonstrated.
At court, politics will not matter nor will the size of a country.

[Hypocrates]

12:18 AM on 11/14/2011

A key part of Merkel's reform is a new name for the EU.... Germany!

[Fountouki]

02:30 PM on 11/15/2011

Apparently, you confuse Germany with the USA, which stole the name of the double continent and calls itself "America".

[Independent66]

11:36 PM on 11/13/2011

Germany was not able to conquer Europe via a war, but they just might do it through the ECU Charter. Control of a sovereign nation's budget, is a big deal. I doubt the French, Italians, Spaniards, etc. would agree to that kind of control. The only alternative to a significant default by many of the ECU members is for the Central Bank to run the printing presses to fund the deficits. This would weaken the Euro and make their exports cost less while their imports would cost more. Germany has not supported this approach because the are an export economy and they believe in a strong Euro. They funded East German unification and they don't want to do that again with the weak countries in Europe.
We will see the same kind of problems as our weakest States suffer their own economic crisis in a few years.

[Hypocrates]

12:20 AM on 11/14/2011

They might be willing to repeat what they did with East Germany, just as long as the result is the same, namely forgoing national identity and accepting inclusion in the 4th Reich

[Independent66]

10:21 AM on 11/14/2011

I can't imagine the rest of Europe agreeing to be internally controlled by Germany. Two world wars were fought over control of Europe. Would we accept the same kind of control from China? It is estimated that the ECU needs $3t to survive intact. They cannot even find $1t. We plan to borrow that every 2 years! We are getting to the same place rapidly.

[Michael GE]

10:16 AM on 11/14/2011

I disagree with the "printing press" argument. First of all: Is inflating deficits away smart or fair? I believe no. Inflation is like a flat tax imposed on anybody. It will hit the poorest and savers hardest while those who own (and invest) huge sums of capital (as their primary means to create income) can easily (as they do now already) hedge against that. But one cannot hedge against if his food and electricity and all the daily things become more expensive while the salaries don't rise.

Secondly, imagine the ECB had already done what some in the US and UK propose (on both sides of the aisle), namely to announce that they will just buy national bonds as needed to keep interest rates low. You think Berlusconi would have left office or attempt any reform in Italy?
Besides that, the ECB is currently (Lisbon Treaty) not allowed to buy bonds on the primary market. They have to intervene on the secondary market and anything else does require a change of the treaty. But buying on the secondary market is just to the benefit of banks: The banks will lend themselves at 1.25% interest money at the ECB, then buy national bonds with x% interest rates and sell them back to the ECB. The difference in the interest rates is a net gain for the banks.

[iam99]

11:27 PM on 11/13/2011

When anyone says that you must be quick and get such-and-such a thing done - right NOW!
Your proper response is to get the slows; move very very slow.

Beware - their agenda, may not be yours.

[UnknownSolider]

11:10 PM on 11/13/2011

Where does England stand, that is the huge question.

[Hypocrates]

12:21 AM on 11/14/2011

On the fence, where she will stay until forced to choose one side of the fence or the other

[OPeixe]

01:04 PM on 11/14/2011

England is becoming more irrelevant every day.

[SoCalNick]

07:46 PM on 11/13/2011

Seeing this Woman's picture reminds me of the international humiliation the shrub caused our Nation when we walked up behind her and gave her a VERY much unwanted Neck-rub.

It shows a pattern of how the leaders of the right demean women , even those in POWER.

No matter who you are..these people want..no NEED you to feel inferior to them or they just cannot live with themselves.

DO NOT TOLERATE IT!

That is all

[OPeixe]

01:04 PM on 11/14/2011

She is also a leader of the right.

[bldr1bob]

06:27 PM on 11/13/2011

In other words...............hurry up and pass it before the Germans get a chance to read it............

[Stavo]

06:23 PM on 11/13/2011

Bottom line, Merkle is hoping that gw bush will come back to Germany and give her another neck message and goose her someone. She likes being around those adults with childrens minds.

[Vendetta101]

04:43 PM on 11/13/2011

Germany is taking through banking what it couldn't take by force .... Europe

[muysuave41]

04:26 PM on 11/13/2011

A power grab for Germany.

[Peanut Santiago]

07:13 PM on 11/13/2011

I have a feeling this is going to get messy.

All those eurozone countries are not about to give up their sovereignity.

This was supposed to be an economic union and it turned out far from perfect.
I can't see how they (especially Germany) can whip it into a political union.

[Michael GE]

10:04 AM on 11/14/2011

What is the "power grab" here?

What Europe had, so far, was the goal that everyone kept spending (aside from emergencies) within the limit of 3% deficit. But the mechanism to "enforce" it was broken, not the least because it was Germany and France who first ignored the limit and then fended off any attempt by smaller nations to be sanctioned for that.

What has become obvious now is also that having one currency but seventeen completely independent national budgets and strategies doesn't work. So it makes sense that all Finance Ministers get together before they make their budget proposals to the national parliaments and have their 16 peers and/or the EU Commission and Parliament look into it and comment it. The ultimate budget authority will firmly remain with the national parliaments. Part of that proposal, btw, was the compromise the EU reached around mid September which includes that also too large trade surpluses by one member can be sanctioned ... clearly something that would mostly concern Germany and still, did you hear outright protests or a "no"?

The idea is that every nation can challenge disruptive national budgets in the European Court so that no longer just politics, decide about sanctions. I think that is much smarter, much more to the advantage of the smaller countries. But to establish this, you need to amend the Lisbon Treaty because only based on that could the European Court rule.

[muysuave41]

10:31 AM on 11/14/2011

Michael GE -- nice to see your counter posts.
The post states 'the right to interfere' is a power grab. Whatever the leadership dreams up will consolidate power away from sovereign governments to other national powers. And no, there are no peers to Germany or France. The EU was structured to benefit the more powerful countries as everyone who is going through austerity knows since they have the biggest banks, hence better outcomes.

The banks are the primary source of funding for government deficits, government debt represents a large proportion of the asset base of most eurozone banks. Insolvency of one therefore threatens insolvency of the other.

The prevailing narrative is that this symbiosis makes the largest European banks too big to fail, driving eurozone governments to provide massive capital infusions and guarantees to banks during financial crises. The truth, however, is that, given the level of eurozone government indebtedness and the relative size of Europe’s banks, Europe’s largest banks are now too big to save. National leaders fail to discuss this.

[marinatha]

04:24 PM on 11/13/2011

Germany wants hands off of its gold reserves, why. Are they not all in this together?Out of this will come a stronger EU ran by Germany.Watch out world.

[Hypocrates]

12:23 AM on 11/14/2011

Watch out world? It couldn't be any worse than having the US run amok as it has for the last half century.

[marinatha]

01:38 PM on 11/14/2011

Were talking the world now.....

[Michael GE]

09:37 AM on 11/14/2011

Regarding the German "gold reserves": It's actually quite simple. The German government does not control them. The gold reserves, IWF Special Drawing Rights, currency reserves, etc. are controlled by the German central bank (Bundesbank) and by them alone. They are independent from politics.

You look into the contemporary political history of Germany and you will see that several federal Finance Ministers tried and failed to tap into these reserves. If you look closely at the timeline of the last summit you will notice: Any debate about it was not taken off the table by Chancellor Merkel at first but by the President of the Bundesbank Weidmann. His "no" was a "no".

And btw: Portugal also has huge gold reserves, but like in Germany these are controlled by their central bank. So no one forced them to put these reserves on the table in the negotiations about their bailout. Some second or third line politicians proposed that, but it was rejected by the government.

[marinatha]

01:37 PM on 11/14/2011

Watch and see.

[robert horwitz]

01:00 PM on 11/13/2011

What a mess. Maybe if George W rubbed Angela Merkel's shoulders again it would help?