Future of the euro depends on just how much Germany cares

A LOT of shadow boxing goes on in the EU.

Sometimes it’s necessary to bridge the cultural and linguistic gaps between people, occasionally for domestic as well as European politics. We’re witnessing a 15 rounder at present, ahead of the wording for the new treaty.

The European Parliament’s involvement has meant greater openness on the draft treaty than heretofore. They may not have a veto over the wording — this will be an intergovernmental agreement — but they do exercise a considerable amount of power.

EU leaders agreed that the parliament should be included and appointed three people to discuss the wording. The three parliamentarians — a German, a Belgian and an Italian — are prominent members of the three main political groups: the European People’s Party (EPP) of which Fine Gael is part, the Socialists to which Labour is linked, and the Liberal ALDE that includes Fianna Fáil.

In some ways, the treaty is incidental, since its provisions are already largely agreed to by member states through the European Commission and its major role in how member states run their finances.

But Germany has insisted on treaty change and has presented items for inclusion in the new rules that probably need a change to the existing document — such as the involvement of the European Court of Justice.

Germany has already shifted position on this once by agreeing the role of the court would only be to adjudicate on whether the ‘golden rule’ — limiting a country’s debts — was in line with what was intended.

Now they appear to be shifting once again, to have the European Commission alone responsible for referring a country to the court rather than allowing each member state to do so.

All a bit academic surely, as unless they make some changes to the way the court can hear such cases, two years will have elapsed before it comes before the judges, and by that time the commission will have taken its own action against the country not abiding by the set limits.

The outcome of these treaty talks could be profoundly important for Ireland on the assumption that nobody really wants us to have a referendum given the substantial likelihood of it being defeated. This allows the Government to push for concessions, not least a new, cheap loan to substitute for the expensive money the state borrowed before the bailout to aid the banks.

One thing in the Government’s favour is the attempt by the parliament to shift the ratification of the treaty from just nine member states to four fifths — which would mean 14 of the 17 eurozone countries. This reduces the number of countries that could effectively veto the new treaty.

The real question now hanging over the whole EU project and the future of the euro is does Germany care? They might not care whether Ireland or a number of other countries remain in the euro or not. They might not care if there was a difference between a German euro and an Irish euro.

The ECB’s distribution of huge monies to the banks has failed to stimulate the real economy and quickened the pace of the dance of death that the banks and the sovereigns are engaged in. It decreases the power of the politicians to break this deadly cycle and suggests the shadow boxing is more like Nero fiddling while Rome burns.