The European Movement-France (ME-F) welcomes today’s decision by the German Constitutional Court, which authorizes the definitive enactment of laws establishing the European Stability Mechanism (ESM), as well as the related Fiscal Treaty.
This decision removes a major obstacle to the ESM becoming operational, which can now be expected in the short term, given Germany’s share in the capital of this solidarity fund.
The implementation of the ESM is likely to complement the decision of the European Central Bank (ECB) of September 7, 2012, which announced its intention to buy short-term sovereign debt securities of struggling eurozone countries on the secondary market, in unlimited quantities. The ME-F welcomes such a decision.
This dual prospect is likely to ease the financial markets’ pressure on eurozone countries, which are facing the necessity to reduce their public deficits to a sustainable level. It also serves as a guarantee of stability and preservation of the eurozone’s integrity. Finally, it should lead financial markets to perceive the eurozone as a truly unique and united economic and monetary entity.
The conditions set by the Fiscal Treaty and the ECB for its intervention are likely to reassure regarding the sound management of public finances of eurozone states in the medium term.
Nonetheless, the ME-F calls on the eurozone governments and the ECB to demonstrate pragmatism in applying the procedures and timetable for deficit reduction, to preserve the conditions for restoring growth and employment, to avoid exacerbating deficits.
Furthermore, the ME-F stresses the necessity of respecting the budgetary sovereignty of eurozone states, as noted by the German Constitutional Court, and invites national parliaments and the European Parliament to address this issue, which is vital for the future of the eurozone and the European Union (EU).
Finally, the ME-F welcomes today’s proposals from the European Commission to entrust the ECB with the ultimate supervision of the eurozone banking sector, and beyond, under the control of the European Parliament. It invites the EU member states and the European Parliament to implement this unified banking supervision as soon as possible, and then to support the use of the ESM for the recapitalization of struggling banks, in order to avoid increasing the sovereign debt of states and the burden on European citizens.
