Who will stay in the European Union when the new fiscal Euro union starts?

Friday's EU summit (December 9^th 2011) has presented the 17 Euro countries with a fiscal union from Germany and France. The remaining 10 countries, who do not participate in the Euro monetary collaboration, will have to take a decision of how they will participate in the “new” EU union. The dilemma in this new attempt from Germany and France, is only based on, the fiscal problems in the union.  The general structural problems and herby the complexity in the European collaboration has not been addressed.

During the financial EU summit, the 10 countries, which remain outside the Euro collaboration, have

(journalist Michael Rathje), 3 options when they decide on their future participation in the EU.

1. As a no Euro country, you can decide to stay outside the fiscal union and the Euro collaboration.
2. As a no Euro country, you can decide to participate in the fiscal union and give up the Euro reservation which countries as Denmark, UK and Sweden has.
3. As a no Euro country, you can decide to work a hybrid solution – participate in the fiscal union but stay outside the Euro collaboration.

As we can see from UK – David Cameron the prime minister have pleaded for option one. UK do not want to be in a structure where EU bureaucrats will get further power, and where sovereignty has to be taken away from local government as Germany and France have suggested in the “new” fiscal union for the 17 Euro countries.

The fiscal union has two main purposes, where the first purpose is not new for the entire EU, it has never been enforced, by any authority in the union. The second purpose, are new and look into the structure of the single member country but still only in the economical area.

• To secure that the budget deficit wont exceed 3% of the BNP
• To introduce a new economical demand the “structural budget deficit”[1] which must not exceed 0,5% of BNP in each member country.

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[1] The structural budget deficit has to take into consideration the single member country cyclical conditions as high unemployment

The interesting part with the first demand only a very few countries have ever been able to maintain this demand and only for periods. The second demand gives real trouble as there have not been defined a single measurement to calculate the structural budget deficit. The interesting part is that this new fiscal union, has to be ratified, in March 2012 by the members who want to participate. It seems that the 17 euro countries don’t have any choice, the remaining 10 countries (Denmark, Bulgaria, Latvia, Lithuania, Poland, Romania, Sweden, Hungary, the Czech republic, and UK ) has to take a decision of weather participate or stay out of this new collaboration in EU. UK is the only country, which up front have refused to participate even though they could risk to loose economical and political influence and even be sanctioned by EU. An opinion pole in UK have shown that 57% of the UK population agrees with the prime ministers decision.

The remaining 9 non Euro members of EU has to look into if they have to have a national referendum on each of the subjects as it could take sovereignty away from the individual member state. Another question is it possible for each of any of the 27 EU countries to comply with the new rules in the fiscal union. The new fiscal union demands, really puts up more questions than it solves. 

·         Does the new fiscal union solve the EU problem?

·         Will this new structure leave an Europe in two speeds?

·         Will the 17 Euro countries, be able to keep an unification when the smaller members can not pass the demands and need further help from ECB or other members?

The European Union dispute about a fiscal collaboration opens up for another discussion, do we in Europe have a structure that can justify such a collaboration to save the Euro. The countries have not even looked into the differences in culture and financial responsibility for each member state. They have not looked into if the development of each member state complies to an average, and is there an average which can be followed by all states in the union. Another question is the majority of member states ready to further sovereignty submission to the EU bureaucracy. The complexity of the European Union as it is today don’t seem to have a public support in the union members populations. Inhabitants in EU do not understand the bureaucrats in Brussels nor the rules or regulations that they have to follow. If the EU should stay as a union, it needs to be much simpler and get an unification on broad topics which slowly could make a unified Europe. If we look at United States of America, the unification has taken more than 200 years and still there are mutual topics that make deep clefts in the population. The Europeans has to work on the various topics but it will take time and we need to have a Europe in different speed or ells it will break.