Brussels, European Bureau - Angela Merkel and Nicolas Sarkozy were present Friday, February 4, at the European Council in Brussels on an outline for a "pact of competitiveness" supposed to give substance to the economic governance of the Union money. Largely inspired by the German Chancellor, in consultation with the French president, this initiative is the latest attempt to turn the page on the sovereign debt crisis.
Each government would commit to carry him in his reforms to increase the competitiveness of the country. Paris and Berlin are also calling for greater harmonization of fiscal, wage and social. Merkel determines the capacity of the support of a state struggling with the adoption of such an initiative.
This would complement the Stability and Growth Pact, the only instrument of collective discipline developed during the creation of the single currency to limit government deficits and debt. No final decision is expected on Friday. An extraordinary summit of the eurozone could be convened in early March to finalize the "global response" that the Europeans are trying to set up under the pressure of the markets.
In the meantime, several projects are carried out simultaneously, amid continuing tensions on Portugal, Spain or Belgium. The aim is, inter alia, to strengthen the striking force of the fund, established in May 2010. With 440 billion euros of guarantees provided by the only states in the euro area, this instrument can occur alongside the International Monetary Fund (250 billion euros) and the European Financial Stability Mechanism (SS, with 60 billion euros, and guaranteed by the Community budget).
The device has been used to help Ireland in late November 2010. The redesign could, according to some European leaders, help persuade Portugal to finally accept international assistance and stand ready, if necessary, intervene in Spain. However, opinions still differ on how best to increase capacity and diversify tools FESF.
Germany wants to settle for "beef up" the capacity for effective action fund, currently limited to 250 billion euros. Other avenues are being explored, such as sovereign debt buyback by FESF - an alternative view with reservation in Berlin - or the establishment of credit lines more flexible.
A working group chaired by Mr Juncker is loaded by the European Council in March, setting the contours of the proposed mechanism, its degree of independence and resources. It will be open to non-members of the euro area - such as the United Kingdom, Hungary, Denmark - wishing to participate in work not directly associated with the device.
The creation of the MES must be made possible by a new reform treaty in Lisbon, to allow operations of a state bailout of the ailing euro. This reform "limited" was required by Mrs Merkel to circumvent the clause "no bailout" included in the European treaties. It is not without risk if ratification problem in one country or another.
The reform has been cleared by a working group led by the European Council president, Herman Van Rompuy, Fall 2010. It has also been the subject of formal proposals from the European Commission, which must be considered by the European Parliament and the Council of Ministers of Finance, by next June.
Philippe Ricard 
Each government would commit to carry him in his reforms to increase the competitiveness of the country. Paris and Berlin are also calling for greater harmonization of fiscal, wage and social. Merkel determines the capacity of the support of a state struggling with the adoption of such an initiative.
This would complement the Stability and Growth Pact, the only instrument of collective discipline developed during the creation of the single currency to limit government deficits and debt. No final decision is expected on Friday. An extraordinary summit of the eurozone could be convened in early March to finalize the "global response" that the Europeans are trying to set up under the pressure of the markets.
In the meantime, several projects are carried out simultaneously, amid continuing tensions on Portugal, Spain or Belgium. The aim is, inter alia, to strengthen the striking force of the fund, established in May 2010. With 440 billion euros of guarantees provided by the only states in the euro area, this instrument can occur alongside the International Monetary Fund (250 billion euros) and the European Financial Stability Mechanism (SS, with 60 billion euros, and guaranteed by the Community budget).
The device has been used to help Ireland in late November 2010. The redesign could, according to some European leaders, help persuade Portugal to finally accept international assistance and stand ready, if necessary, intervene in Spain. However, opinions still differ on how best to increase capacity and diversify tools FESF.
Germany wants to settle for "beef up" the capacity for effective action fund, currently limited to 250 billion euros. Other avenues are being explored, such as sovereign debt buyback by FESF - an alternative view with reservation in Berlin - or the establishment of credit lines more flexible.
A working group chaired by Mr Juncker is loaded by the European Council in March, setting the contours of the proposed mechanism, its degree of independence and resources. It will be open to non-members of the euro area - such as the United Kingdom, Hungary, Denmark - wishing to participate in work not directly associated with the device.
The creation of the MES must be made possible by a new reform treaty in Lisbon, to allow operations of a state bailout of the ailing euro. This reform "limited" was required by Mrs Merkel to circumvent the clause "no bailout" included in the European treaties. It is not without risk if ratification problem in one country or another.
The reform has been cleared by a working group led by the European Council president, Herman Van Rompuy, Fall 2010. It has also been the subject of formal proposals from the European Commission, which must be considered by the European Parliament and the Council of Ministers of Finance, by next June.
Philippe Ricard
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