PLUCKY FINNS HOLD OUT FOR CONSENSUS
Mystery of what non-Ezone countries had to say
Euro-zone finance ministers meeting in Brussels on Monday night finalised the Treaty scoping out the responsibilities of permanent euro bailout fund to replace the temporary EFSF, the ESM. But the meeting ran way over schedule, as Finland insisted on full ezone consensus on ESM bailouts…and today, The Slog and others found various press offices somewhat evasive on the exact content. What do the other 10 non-Ezone States think about it? As yet, nobody wants to say.
Over at Zero Hedge earlier today, Tyler Durden was having an epi about EU evasiveness on the subject of the final Draft of the ESM. He may well have a point….and at the very least, we all owe him a debt for flagging this up.
It was due to be finalised at the EU ECOFIN meeting last night. This was the official dance schedule:
‘The 17 ministers of the euro zone will then be joined by 10 ministers from the other European Union countries to finalize a treaty setting up the euro zone’s permanent bailout fund, the ESM.’
The only thing is, nothing got finalised until 4.00 am at least. When I rang the ECOFIN press office today, there was a lot of umming and huffing and bluffing…oh, didn’t we post it? And so forth. And then everyone was in a meeting.
The Foreign Office said ‘nothing to do with us’, which is bollocks: funny how the FCO has an open-door policy, up to but not including SNAFUs. And the Treasury said there would be a press release later this afternoon from ECOFIN, but no – they didn’t have any details. My old mole at the Trezz has retired sadly, and my Brussels mole isn’t party to this sort of stuff.
Three hours ago, Der Spiegel online confirmed that a deal had been done. But the EU release – significantly – says, ‘The 17 euro-zone countries have reached agreement on the contract for the permanent euro bailout fund’. Er…what happened to the other ten?
As yet we don’t have any official confirmation. But it’s clear from the Finnish media that their Finance Minister insisted on (and got) 85% consensus for any and all dispensing of bailout money. The lady concerned – social democrat Jutta Urpilainen – is clearly somebody who could teach Camerlot a thing or two about (a) paying attention and then (b) sticking around to bully the bullies.
But there remains enormous confusion about the size of this ESM. While writing this, I have had breaking input from The Slog’s Bankfurt Mole that – as he feared – Merkel is ready to compromise on the size of the fund – the Spiegel piece also confirms this. But Mario Monti wants a $750bn fund “at least”, Christine Lagarde and Mario Draghi want a $1 trillion fund, and the markets (along with the Americans) would like one 2.4 times the size. There’s a twist in the tail, too: raising the capital of the ESM will also require the 85% consensus upon which Finland has insisted. Won’t that be fun.
Much of this list-wishing, however, remains a fantasy: Eurozone countries are required to provide a total of €80bn in cash capital to the new ESM, but as six of them are broke, in practice very few will partake to any great extent: Berlin admits that its minimum contribution will be around €22bn. There will be a deal of argie-bargie in the Bundestag when CDU senior players realise that, in reality, Germany will have to cough up rather more than that.
Keep your eyes peeled for some dissembling obfuscation from Osborne’s spin-doctors the UK Treasury Press Release.
The Slog 