BIRTH OF THE EUROZONE TREATY

The midwives of the EUROZONE, Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France, affectionately known as Merkozy, will certainly announce the imminent birth of the EUROZONE this week.

With the benefit of the experience of the flawed Treaty of Lisbon, they will certainly avoid the adoption of most of the potholes in that treaty.  The new EUROZONE TREATY could become an example of how, and what, to revise in the EU treaty of  Lisbon in the next two years.

The EUROZONE TREATY will be less extensive than the Lisbon Treaty of the EU.  It will be necessarily more concentrated on money aspects of the EURO and the organization required.

Will it not need its own parliament ?  Will that not mean fewer but more specialized, elected Eurozone MEPs ?  Should official EU observers not have the right to attend certain meetings ? 

Europe should not miss this opportunity to put its house in order in the light of the new EUROZONE treaty when this is ready. That means redrafting the LISBON TREATY.     

ARE STANDARD & POOR'S PLAYING AT POLITICS ?

What are the real objectives of S & P, FITCH and MOODY ? Are they
supposed to be financial rating agencies, or are they something else ?  Are they playing at politics ?

Recently, S & P jumped the gun when they announced that France had lost its AAA rating.  They withdrew the rating hours later but the harm had already been done !!!  Have they paid any compensation or appologized for their "error" ?

Now, just when EU leaders are meeting to make important decisions concerning the EUROZONE, its future organisation and orientation, S & P announce that six Eurozone countries risk losing their AAA rating in the near future !!! 

S & P have at present a high reputation, but if they want to anticipate, irresponsibly forecast, the effect of imminent political decisions they are overstepping their remit, the limit of their supposed functions !!!

If S & P get it wrong again, their reputation should be downgraded, but will they pay any penalties or compensation ?  POOR advice will hurt those who have to pay !!!  Will S & P be obliged to pay any compensation ?





  

BRITONS AND EUROPEANS WANT TO VOTE !!!

The present EURO problems in the EU which in turn lead to the realisation that a EUROZONE must be created to contain and govern the problem, in fact highlights a further problem !!!

EVERYONE, whether in the future EUROZONE or simply just hanging on in the EU, suddenly realises that he or she should have the right to have his "say".  They want to vote !!!  This is a right and it must be respected !!!

Alas, we have already seen that when the LISBON treaty was pushed through, no one except the Irish got a vote !!!  National politicians who had been elected "sacrificed" the right of electors to have their "say" and waived through the LISBON TREATY.  What did these "politicians" gain.  GLORY ?  POSTERITY ? Or anything at all ?

This cannot, should not, happen a second time !!!  Everyone wants to vote !!!  Is this an abnormal request from taxpayers ?  

Sarkozy and Merkel are in continual contact.  They must know that a vote will be obligatory.  Such a vote on the EUROZONE cannot be avoided !!!  They should plan now for such a vote, early next year !!!

The timing of everything is important, but if you forget the electors, it could be critical !!!   No one wants to be duped twice !!! 

EUROZONE AUDIT FUNCTION ?

In the recent past there have been severe comments on the lack of efficient audit controls of EU expenditure.  In the present climate of EU or EUROZONE reorganizations, it is perhaps a very opportune moment to ask who is responsible for auditing budgets and the subsequent expenditures ?


A contoller function is naturally set up in most private companies, because the absence of controls is dangerous and bankruptcy is a quick consequence !!!


To be efficient, an audit function must be independent and must be supervised and supported by someone at Board level.  A properly staffed audit function can help Directors.  It can help to avoid scandals and embarrassments.  Auditors know that where there is money or expenditure, theft or misappropriation is possible !!!

A previous article in English in this Blog entitled "Les Millions Perdus de l'Europe" dated 2 November 2011 provides some examples of what can go wrong.

GOLDEN RULES ?

We hear a lot about "GOLDEN RULES" but on one occasion I saw a golden rule in action !!!

I had to go to Venezuela on a business trip more than 20 years ago, to visit a subsidiary company. While I was there I noticed that shops were closed and looked empty. The shop I had first noticed sold refrigerators and other household goods.

I asked the person with whom I was working on this trip what the reason was for this.

He replied quite simply that the budget for imports was limited.  When there was no more money available, one could not get import licences for certain goods anymore !!!

Angela Merkel has another golden rule !!!  Such rules can be very effective !!!

EUROZONE BIRTH PROBLEMS

President Nicolas Sarkozy and Chancellor Angela Merkel could go down in history as being the people who created the EUROZONE and who were instrumental in saving the EURO.  

There is still a lot of work to do and they know this, but no one country or person can do this alone !!!

The basic problem is that the EU treaty of LISBON is flawed; there are too many potholes in it.  The new EUROZONE TREATY of the 17 countries which have the EURO as their national currency, can avoid all these potholes and in so doing provoke a revision of the LISBON TREATY by all the 27 EU member countries afterwards !!!

The main structural problems to avoid, to correct, or modify are:

   -   100% unanimity in all votes:  a 75 - 25 % rule would avoid current stale-mates.

   -   There is at present a Parliament of the EU:  should there not be a Revision Chamber or Senate or Council of Super powers to adopt the Acts of the EU Parliament ?

   -    Should there not be a Prime Minister with a Cabinet elected     by MEP's ? (MEP = Member of the European Parliament).  Is the existance of the European Commission vital, or is it more of a hindrance ?

   -   Should MEP's not be elected at the same time when there are National Elections ?  Should EU elections every 5 years not be scrapped ?

The new Eurozone structure must take the above points into consideration in order to create a more conviviable structure to attain the important goals aimed at the survival of the EURO !!! 

Later, someone like David Cameron could perhaps mastermind the revision of the Lisbon Treaty.  One must not forget that
there are 27 member countries in the EU.    

EU SURVIVES, EUROZONE BIRTH PLANNED

The 27 country EU has survived, but it will be joined by a 17 country EUROZONE which will be fast-tracked !!!  Forcepts will probably be needed to ensure a quick birth early next year !!!  


The urgency of the EURO crisis means that all avenues like the IMF have already been explored.


Simply said, Angela Merkel wants a fiscal union and she wants to impose bugetary controls, what she and the Germans call the "Golden Rule".  This in turn means "Do not infringe the current limit of over-expenditure". 


Teutonic thinking does not accept the more relaxed attitudes in the Latin mentality of countries like France and Italy, and others.....


Nicolas Sarkozy wants the Euro to be saved at all costs.  Angela Merkel is in agreement but wants to protect German productivity She does not want Germany to have to pay the bill of all the costs if the EURO "goes under",  i.e. becomes bankrupt as may be the case with certain countries at the present moment.

So the real question is, who will cede, or concede ?

We must wait !!!   That is the battle !!!  Without concessions from either side there will be a stale-mate chess situation !!!

Next week perhaps, we will know more and we may be able to discuss the problems connected with the establishment of a EUROZONE organisation and the effects on the current EU Treaty !!!