In the margins of the European Council meeting on 2 March, the leaders of twenty five European states formally signed the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (the SCG Treaty aka ‘Fiscal Compact’ Treaty). When compared with the rancour of the December European Council summit which saw the UK Prime Minister block a direct revision to the EU treaties, for President Van Rompuy– celebrating his re-election as European Council President and appointment as the new Euro Summit President – the Spring European Council was conducted in a “team spirit”. More importantly, for Commission President Barroso, the treaty signalled the “irreversibility” of the Euro and underpinned its credibility.
As with my earlier contribution on the European Stabilisation Mechanism (ESM) Treaty, I want to reflect on this turn to treaties as a response to the economic crisis. As is by now well known, the unwillingness of the UK government to negotiate a revision to the EU Treaties without obtaining certain ‘safeguards’ for its financial services sector prompted other EU states to turn to the vehicle of an international treaty to enshrine in law a ‘fiscal compact’ among participating states. In the end, the Czech Republic also decided that it would not participate, leaving it to the remaining 25 EU states to agree a treaty amongst themselves.
There is much that has already been, and will be, written on the SCG Treaty. The issue of the very legality of the Treaty has itself been discussed with UK MP Bill Cash succeeding in obtaining an emergency parliamentary debate on the issue. For the moment, there are three main issues I want to illustrate. The first is the necessity of treaty reform. The second is the consequence of bypassing the mechanisms and processes for EU treaty reform. The third is the role played by domestic constitutional requirements.