EG President @mariofcenteno claims that „the BICC has finally landed“. In truth, this thing has crashed in the desert of Eurozone nonsense a while ago and attempts to rescue the remains get increasingly desperate.
Thread:
Thread:
1/ So what happened: The Eurogroup has adopted another „term sheet“. It makes a bit clearer on what basis the funds from the instrument formerly known as Eurozone budget should be allocated (population and inverse of GDP/capita).
consilium.europa.eu/en/press/press…
consilium.europa.eu/en/press/press…
2/ It also makes clear that only 20% of the money in the BICC will not be pre-allocated and, if my reading is correct, that of the pre-allocated money, countries expect to get at least 70% back of what they paid in.
3/ On size, there seems to be no news. According to the term sheet, the Finnish want to propose the 17 billion the COM had proposed for the EZ part of the reform delivery tool. But there seems to be no way to agree on the size as of now.
4/ What’s more important, there is still no agreement on having an intergovernmental agreement to prop up the instrument with additional resources in case needed. Issue is kicked back down to state secretaries. But it is absolutely clear that that level won’t decide on this.
5/ That brings us to the most important point: Ministers discussed for hours and hours again about this. They didn’t solve the politically really thorny points. This thing is stuck. It’s not moving. And I don’t see how it will move anywhere sensible in the foreseeable future.
6/ I have argued here that what we need for the instrument to work is both flexibility and scalability. On flexibility, this term sheet seems to make things worse. On scalability, things are stuck.
delorsinstitut.de/en/all-publica…
delorsinstitut.de/en/all-publica…
7/ There could be one last hope: The EP has to approve this. And maybe the negotiations with the EP could unlock a bit of energy in case the EP gets its act together and pushes for something really bold. But I’m skeptical that will happen.
8/ In the end, it’s pretty clear now that some member states just don’t want a meaningful fiscal instrument. That is the reality. So maybe it’s time to leave the wreck in the desert. Finish the MFF discussion on all the other important issues. And start from scratch.
