An economic government

AT a different time the agreement reached by France and Germany to create “the first true economic EU government” would surely have raised much more critical dust than it did on Tuesday when Chancellor Merkel and President Sarkozy launched it at their mini-summit.

Perhaps nerves were calmed by the fact that the “government” will be chaired by Herman van Rompuy; as the first president of the EU Council of Ministers under Lisbon Treaty provisions he has been almost invisible in the past year. Even so, the new body has been given teeth in the form of an obligation on the 17 members of the eurozone to pass laws to enforce balanced national budgets. As a first step it is a modest one but Eurosceptics will be on the alert for any strengthening of its provisions that might lead to a greater centralisation of power in Brussels.

Expectations that the Merkel-Sarkozy meeting might produce an agreement on the creation of joint “eurobonds” were disappointed, probably because Germany would have to be their principal guarantor. Britain responded to the new “government” with a statement that “it points in the right direction but we will need to see how it pans out”. Has anyone yet explained how an “economic government” of the 17 eurozone members will co-exist with the ten EU countries, among them Britain, who are not members?