European leaders were embroiled on Friday in a row over whether to reopen the ill-fated Lisbon treaty discussions, only four months after the EU’s new rule book came into force.
While German Chancellor Angela Merkel pointed to flaws that could only be fixed by revisiting Lisbon, British Prime Minister Gordon Brown insisted there was no appetite in Europe for reopening the treaty, after nine grueling years of argument about getting it adopted.
A two-day EU summit in Brussels ended with Merkel announcing that treaty changes were inevitable and Brown declaring them inconceivable.
Merkel appeared isolated, but nonetheless in a strong position after dictating the terms of a rescue plan for Greece aimed at forestalling its financial collapse and destabilizing the euro.
She was feted yesterday at home as Germany’s “iron chancellor” after securing the agreement against the odds on a rescue deal for Greece, but on the toughest of terms set by Berlin. Her hard line is playing well at home, but stirring complaints about a new “German hegemony” in Europe.
Berlin, which will shoulder the greater cost of bailing out Greece should that be necessary, appears bent on establishing a new system of penalties and sanctions aimed at preventing the recurrence of a Greece-style financial emergency among the 16 countries using the euro.
To obtain complete risk insurance, Merkel said the Lisbon treaty would need to be changed. The rules for deterring and punishing fiscal profligacy were inadequate, she said. “If the treaties are not right, we can’t say we don’t want to do anything for 10 years.”
That contradicted Brown, who has repeatedly said that after the Lisbon treaty there should be no more institutional changes in the EU for at least a decade.
Merkel has called for new rules to allow the expulsion of a country from the single currency if need be, and for the establishment of a European monetary fund. Both would need major changes in EU law.
Jose Manuel Barroso, the president of the European commission and Herman van Rompuy, the president of the European council, are known to be skeptical about revisiting the treaty, which many liken to opening a Pandora’s box.
The summit put Van Rompuy in charge of a “taskforce” that is to report by the end of the year on how the rules governing the single currency might be tightened.
One senior European official said no one but Merkel wanted to reopen the Lisbon treaty, a process that requires the agreement of all 27 EU governments.
Another senior official was worried about the potential impact in Britain and Europe if the current UK opposition Conservative party were to win the forthcoming UK general election, because they could use reopening the treaty to trigger a major crisis by holding a referendum in Britain.
“There are doubts,” said the senior official when asked about the Lisbon question. “There are member states that will reopen other issues. I know in Britain that the party that is ahead in the polls would like to open discussions.”
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