Praying for success

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Ann Cahill, Irish Examiner, 23.01.2012

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The latest EU treaty is meant to stabilise the eurozone and ensure greater fiscal obedience but it can’t solve all ills, writes Europe Correspondent Ann Cahill

Olli Rehn, the European Commissioner for Economic and Financial Affairs, noted that the vast bulk of the Treaty on Stability, Coordination and Governance does not actually require treaty status. Its real usefulness will be evaluated once Germany is needed to put more funds on the table. […]

In fact the European Commissioner for the euro, Olli Rehn, said that 95% of it doesn’t need treaty status at all.

But according to political scientist Janis Emmanouilidis, that is to miss the point in this drawn-out battle with the markets, investors, punters, banks, politicians, debtors and creditors that has been going on since Ireland agreed to "the cheapest bailout in history". [...]

But, points out Emmanouilidis of the European Policy Centre, the treaty is an investment in the future. "Its biggest value is as a key. I am sure Berlin needs this treaty for the government to argue with its own party first, its coalition partners, and the public to move towards a stability union, to ensure fiscal obedience will be assured in the future — this should not be underestimated," he said.

The argument that it does not provide a solution may be true. But its usefulness will be evaluated once Germany is needed to put more funds on the table, and this will happen if the crisis deteriorates, but also once Greece concludes its deal in the next few days with the banks on burning bondholders, when Greece will need another bailout of billions of euro. […]