EU summit enjoys more relaxed atmosphere | Europe| News and current affairs from around the continent | DW | 02.03.2012
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EU summit enjoys more relaxed atmosphere

The main issues are growth and jobs, and there is even time to anoint Serbia as the latest membership candidate - this is the most relaxed EU summit since the start of the ongoing euro crisis.

Ireland's Prime Minister Enda Kenny, European Commission President Jose Manuel Barroso, EU Council President Herman Van Rompuy and Denmark's Prime Minister Helle Thorning-Schmidt attend a tripartite social summit ahead of a two-day European Union leaders summit in Brussels March 1, 2012. REUTERS/Sebastien Pirlet (BELGIUM - Tags: POLITICS)

EU Gipfel in Brüssel 01.03.2012

With jobs and growth being the main themes of the European Union summit in Brussels, it was appropriate that European statistics office Eurostat released its unemployment figures on Thursday.

The statistics said that the EU has now reached its highest ever jobless rate since the introduction of the single currency. Particularly worrying are the high levels of unemployment among young people – in Spain and Greece, nearly half of young people are without work.

Chancellor Angela Merkel thinks that this can only be solved through structural reform – the whole of Europe, not just Greece, needs to become more competitive. "There are too many areas where Europe cannot compete internationally. We have to change that," she said. Too many countries, she added, "were not fulfilling their potential." But there are unlikely to be dramatic decisions at this summit. Instead, there would be an exchange of ideas over many small steps.

Fiscal union

But the mood at the summit is notably relaxed. Finnish Prime Minister Jyrki Katainen laughed when a journalist asked him whether the crisis was over. "The crisis isn't over, but this isn't a crisis summit," he replied.

Another reason for the happier atmosphere is that the fiscal union pact – meant to foster budget discipline – is now ready to be signed. Almost all EU countries, including many outside the eurozone, want to sign up.

The two rebels are Britain and the Czech Republic. Czech Prime Minister Petr Necas named one key reason for his refusal: It is, he said, "not a good idea to have special euro summits without all the member states. We fear that that could lead to political tensions."

Along with other critics, he sees a danger that the EU could split if the Eurogroup begins to hold separate meetings. Indeed, it remains unclear what role the non-euro states are to have in the fiscal union pact.

European Parliament President Martin Schulz talks to Germany's Chancellor Angela Merkel during an European Union leaders summit in Brussels March 1, 2012.

Merkel does not want to expand the ESM any further

Great strides in Greece

The Eurogroup finance ministers turned their attention almost exclusively to Greece in a special summit ahead of this week's EU meeting. There, the governments finally concluded that Greece had fulfilled the necessary conditions to release some parts of the second bailout package. But it took some last-minute cuts to be passed in the Greek parliament on Thursday morning to seal the deal.

German Finance Minister Wolfgang Schäuble praised what he called Greece's "great strides," but he did not want to make any concrete promises.

It remains to be seen how much private creditors will have to contribute to Greece's debt cut, which of course depends on how big the public share will be. In recent parliamentary budget committee negotiations, Schäuble refused to rule out further rescue packages for Greece. He was more cautious in Brussels: "I think it's a bit hasty to start talking about a third one now."

ESM row

Another decision that has been put off is whether or not to boost the EU's permanent rescue fund, the European Stability Mechanism (ESM). The ESM is mean to protect weaker euro-countries and replace the European Financial Stability Facility.

Up until now, Germany has refused to go over the agreed 500 billion euros ($666 billion). But the pressure is building, and Berlin is becoming increasingly isolated. Even Austrian Chancellor Werner Faymann wants to see more cash in the pot. "I think if you're building a protective wall, you should know that stronger walls are better than weaker ones," he said.

Martin Schulz, president of the European parliament, doesn't think that Germany's resistance will last long. "I think there will be an increase in the ESM," he said.

Serbia's President Boris Tadic and European Commission President Jose Manuel Barroso hold a joint news conference in Brussels.

Serbia finally gained its candidacy status, despite Romanian objections

Door opens for Serbia

The easier atmosphere in the euro crisis means that other issues have found a way into the summit – particularly EU expansion. Only a few hours after the start of talks, Serbia was formally recognized as a candidate for membership. According to the EU foreign ministers, the country has fulfilled all its obligations, particularly in normalizing relations with its former province Kosovo.

Only Romania had raised an objection, in the area of protecting minorities. Since this was an issue that required unanimity, an initial decision was blocked on Tuesday and delayed until the summit proper. Romania finally gave up its objections on Thursday evening and signed an agreement with Serbia.

No Schengen for Romania and Bulgaria

Romania's recalcitrance on Serbia may have had something to do with the row over the accession of Romania and Bulgaria to the Schengen zone. Only the Netherlands has blocked their entry into the border-control-free area, on the grounds that these two countries cannot be trusted to secure the EU's outer borders.

But the main issue is corruption. If Romania had been banking on bargaining Serbia's candidacy status for entry to Schengen, it didn't work out. As Dutch Prime Minister Mark Rutte put it, "We think that Bulgaria and Romania have not done everything that they should." This issue, too, has thus been put off for now.

Author: Christoph Hasselbach / bk
Editor: Andrea Rönsberg

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