The future of the Eurozone / The future of Kyoto:



 

The European Council on 8-9 December was concentrated on the debt crisis in the Eurozone. Very tough discussions by the Member states were dominated by a German-French proposal aimed at reinforcing the economic governance of the EU and including these commitments in the treaty. The European Economic Union was definitively included in the agenda. A deep compromise by all member states to transfer powers from governments to the EU was rejected only by the UK. So, the leaders of the Eurozone agreed to strengthen budgetary discipline in order to save the Euro. A new Treaty will include guarantees for a balanced budget, to be implemented in national constitutions, an automatic cut in spending if deficits rise and the submission of budgetary and economic plans for EU approval.

 

A key agreement is keeping structural deficits below 0,5% of GDP. Moreover, countries flouting the 3% of GDP budget deficit limit (the ceiling included in the Stability and Growth Pact) will sign an “economic partnership” plan with the Commission and the Council; and all countries will report the EU before issuing debt on the markets. Additional changes to the Pact will introduce automatic fines for countries that break this 3% limit.

 

However, the Council has been call several times with the utmost urgency in order to find the definitive solution to this never ending agony. But answers seem to be short, late and bad. You can read more in the article “Where is this crisis leading Europe? (updated)”.

 

The future of Kyoto

 

The Brussels summit produced some more results than previously expected, quite the opposite than the other big summit in Durban, with rather insufficient commitments. Climate change does not seem to be a real priority for international community. The agreement reached at the global climate change conference in Durban, South Africa (28 November-11 December) only satisfied those who have consistently been blocking progress, i.e. the Americans. The announcement made on 12 December by Canada that it is withdrawing from the Kyoto Protocol on greenhouse gas reduction is yet another blow. Canada is the first country to officially abandon this unsuccessful effort. In fact, while Japan and Russia refused to sign up for another period of commitment, they did not take that one step further and legally repudiate the protocol. The EU did its best to reach an agreement including all parties and somehow showed its leadership in the multilateral process, but key points have been postponed once again. The results of the conference will bring about only very few restrictions to prevent the destruction of the world’s climate system. The EU firmly pushed all countries to commit to reaching a legal agreement for the post-2020 period, while developing countries insisted with just as much firmness for a second period of commitment under the Kyoto Protocol. The EU is the only major actor left in Kyoto.

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