British veto threat on the EU budget ‘very dangerous’

Janis A. Emmanouilidis, Euractiv, 23.10.2012

Link to original article


A looming British veto on the EU budget for 2014-2020 could heavily undermine the Union’s efforts to emerge from the eurozone sovereign debt crisis, Brussels analysts warned yesterday (22 October). […]

Cancelling the November summit?

Janis A. Emmanouilidis, senior policy analysts at the EPC, went further, saying that German Chancellor Angela Merkel could decide to cancel the November summit if Cameron insists that he will veto any deal other than a total freeze on spending, as reported by the Financial Times yesterday.

If the November summit is canceled, the December summit would “not be ambitious enough,” restarting the eurozone crisis, Emmanouilidis said.

This looming crisis comes as the EU’s common currency is starting to emerge from the three-year sovereign debt crisis, Emmanouilidis said. The three reasons, he said, were that the European Central Bank had made use of the “big bazooka”, by buying sovereign bonds on the secondary market, that the EU appeared now ready to think long-term, and that there was a substantially reduced risk that any country will exit from the eurozone.

But he said that the dangers were still around and confidence could be easily undermined.

He pointed out at the “very fragile situation in the European banking sector” and lack of answers to the Spanish question as well as the ongoing Greek crisis. In addition, he said Cyprus and Slovenia had “to become programme countries” by negotiating bailouts similar to those of Greece, Ireland or Portugal.


A looming British veto on the EU budget for 2014-2020 could heavily undermine the Union’s efforts to emerge from the eurozone sovereign debt crisis, Brussels analysts warned yesterday (22 October). […]

Cancelling the November summit?

Janis A. Emmanouilidis, senior policy analysts at the EPC, went further, saying that German Chancellor Angela Merkel could decide to cancel the November summit if Cameron insists that he will veto any deal other than a total freeze on spending, as reported by the Financial Times yesterday.

If the November summit is canceled, the December summit would “not be ambitious enough,” restarting the eurozone crisis, Emmanouilidis said.

This looming crisis comes as the EU’s common currency is starting to emerge from the three-year sovereign debt crisis, Emmanouilidis said. The three reasons, he said, were that the European Central Bank had made use of the “big bazooka”, by buying sovereign bonds on the secondary market, that the EU appeared now ready to think long-term, and that there was a substantially reduced risk that any country will exit from the eurozone.

But he said that the dangers were still around and confidence could be easily undermined.

He pointed out at the “very fragile situation in the European banking sector” and lack of answers to the Spanish question as well as the ongoing Greek crisis. In addition, he said Cyprus and Slovenia had “to become programme countries” by negotiating bailouts similar to those of Greece, Ireland or Portugal.

Emmanouilidis pointed out at the social and economic situation is worsening in many member states, and “the collateral damage of the crisis” is that nationalism, populism, political extremism and separatism are on the rise.

Emmanouilidis insisted that the 18-19 October summit, by “muddling through”, would not give the solution to Europe’s problems. He pointed out a various “worrying signs” from the summit: the “loss of determination to create the banking union,” the “inclination to backtrack from decisions taken earlier”, and to a “wait-and-see attitude” which was becoming dominant.

To this, a risk element he mentioned the “growing polarisation” between France and Germany.

In the meantime, the European Parliament invited Merkel to discuss pending issues related to banking union and the 2014-2020 EU budget. She is expected to address the mini plenary session on 7 November in the afternoon.

For the article see here.


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