Eurobloat #0026 • June 2012
June 2012 was the month the euro nearly fell over, so naturally the cure was to centralise everything that was not already centralised. Two countries asked for rescue money, one Court rubber-stamped a near-billion-euro fine, and the Parliament threw a tantrum because member states dared to ask for their own border keys back.
Folly of the Month: A debt crisis built by Brussels, solved by more Brussels
At the summit of 28 and 29 June, eurozone leaders looked at a crisis caused by binding very different economies into one currency and concluded that the answer was banking union. The ECB would become the single supervisor of the continent's banks, and the European Stability Mechanism would be allowed to pour money straight into them, the better to "break the vicious circle between banks and sovereigns" that the single currency had so helpfully created in the first place. Supervision of your high street bank now drifts towards Frankfurt, the bill drifts towards taxpayers who never saw the loans, and nobody who designed the original trap is asked to explain themselves. It is the EU method in one summit communiqué: every failure of integration is a reason for more of it.
1. Spain asks for a hundred billion, and the eurozone obliges
On 9 June, eurozone finance ministers agreed to lend Spain up to one hundred billion euros to plug the holes in its banks, a sum that would once have been thought a national emergency and was now merely a Friday evening conference call. The money came with conditions for Madrid and a reassuring promise that this time the firewall would hold.
2. Cyprus joins the queue on the same day as everyone else
On 25 June, Cyprus became the fifth eurozone country to request a bailout, its banks having lost more than four billion euros on the Greek debt write-down that Brussels had earlier hailed as a triumph. A banking sector six and a half times the size of the economy met a currency union it could not leave, and the begging bowl came out, communist president and all.
3. Bail-in: the Commission discovers that losses should fall on someone
On 6 June the Commission proposed its bank recovery and resolution framework, complete with "bail-in" powers, so that in the next crisis the creditors of a failing bank might take the hit rather than the taxpayer. A sensible idea, arriving only after several rounds of doing precisely the opposite, and folded neatly into the new machinery of EU-level supervision.
4. The Court blesses Microsoft's 860-million-euro fine
On 27 June the General Court upheld the Commission's penalty on Microsoft for not sharing enough data with rivals, graciously trimming it from 899 to 860 million euros after spotting a Commission miscalculation. Brussels fines an American software firm the better part of a billion euros, gets its own arithmetic wrong, and the judges call that a result.
→ edri.org
5. Member states reach for their border keys, Brussels recoils
On 7 June, home affairs ministers agreed that national governments could reintroduce checks at their own internal borders in an emergency without first asking the Commission or Parliament for permission. A modest restoration of the most basic sovereign function, controlling who crosses your frontier, and a welcome one.
→ gov.uk
6. The Parliament boycotts everything in a fit of pique
Furious at being cut out of the Schengen decision, MEPs voted on 14 June to suspend cooperation with the Council on five home affairs files until they got their say back. President Martin Schulz called the Council's move "a slap in the face of parliamentary democracy", as if letting a country guard its own border were an act of vandalism rather than the whole point of having a country.
7. The EU-wide tax that would not die
At the same June summit, leaders conceded that the financial transaction tax would not be adopted by the Council "within a reasonable period", which is Brussels for "no". Rather than drop a levy several capitals plainly did not want, a willing few were waved towards "enhanced cooperation" so the project of an EU-level tax, eyed all along as the Union's own money, could shuffle forward anyway.
8. A new patent court, carved up by horse-trading
The 28 to 29 June summit finally agreed the seat of the Unified Patent Court by splitting it three ways, the main division in Paris with specialist annexes in London and Munich. Years of wrangling over real innovation policy reduced to which capital gets which filing cabinet, and a court whose location had to be negotiated like the spoils of a war.
9. Brussels tells you what your roaming should cost
With Regulation 531/2012 set to bite from 1 July, the Commission spent June congratulating itself for capping the price of mobile roaming across the Union. The same institution that had let operators gouge travellers for years now presented its own price list as a gift, while quietly extending its reach over yet another market.
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