After a worrying time about this 'renegotiation' European officials are saying today that they are now willing to help the French president complete the treaty of fiscal discipline through a growth initiative. Indeed, the 'claims' made by François Hollande reassured Brussels, because the projects already underway continue.

Les Echos adds that the President of the European Commission, Jose Manuel Barroso, said that he is happy to benefit from the opportunity created by the arrival of François Hollande to encourage a boosting of investment, provided it does not go back on the necessary deleveraging.” However, the paper warns:

This sudden urge to increase growth projects, however, risks clashing with the reality of public finances. For the EIB to recapitalise, 10 billion euros must be found, while in order to reallocate unspent structural funds, the states would have to transfer to Brussels the 82 billion they promised but have yet to hand over due to delays. And that is without including the 80 billion euro bill for building up capital for the future European Stability Mechanism (SPM). (...) Without cash in the coffers, the growth debate is about toeing a fine line between budgetary discipline and plunging into recession.

… led the Commission which collapsed in 1999, after a devastating report on fraud and nepotism attacked the EU's executive body for serious management failings.

All 20 members of the Commission stepped down, in what was described at the time as the biggest crisis in the European Union's history.

Although absolved of direct involvement in fraud, Mr Santer, was criticised for “his failure to impose order on the Commission” the London daily notes.

Defending the decision, Euro Group president and Luxembourg PM Jean-Claude  Juncker declared that Santer, himself a former Luxembourg PM, “served both Europe and his country in the best way possible.” However, according to Martin Callanan, leader of the UK's Conservative MEPs --

Putting Jacques Santer in charge of fundraising is like putting Dracula in charge of the blood bank. Santer's little helpers have dragged him out of retirement to give him another cushy EU job.

This may serve as a “loud wake up call”, writes El País. Annually, Europeans waste

... 179 edible and healthy kilograms of food each [...] the major portion of which is household related, at 42% (of which 60% is apparently avoidable). Producers follow close behind on 39%; catering sector 14%; and lower down the scale, distributors at 5%.

Taking into account that 16 million Europeans receive aid from charity organisations, the report asks to-

... redistribute leftover food to poorer people which would end up as refuse.

The report drafted by Italian socialist MEP Salvatore Caronna calls on the Commission to promote measures to reduce waste, such as the double date labelling [sale date limit and latest possible consumption] and with discounts on food products damaged  or close to the expiry date.

And when governments respond, they do so in a half-hearted fashion: by waiting for the Franco-German couple to take the initiative.

Willingly or perhaps not so willingly manning the helm, “Merkozy” has managed to pilot the euro through the shoals of the crisis – at least until now.

At the same time, their management of the emergency and the developments to come have enshrined the triumph of the intergovernmental method, favoured by Angela Merkel and Nicolas Sarkozy, as well as the President of the European Council and adroit weaver of compromises, Herman Van Rompuy.

It is a method that has its advantages – we can react more rapidly, more effectively, and more legitimately when decisions are taken by government leaders – and its disadvantages: the absence of transparency and the de facto marginalisation of “small” countries.

The other drawback is that the intergovernmental method has sidelined community institutions (the European Commission and Parliament) to the point where it has weakened the entire EU, which is now perceived by the public as a part of the problem rather than the solution.

In spite of José Manuel Barroso’s demands for a more important role for the Commission – with, as a first step, control over the observance of the new pact for the euro – the institution he presides continues to viewed by  commentators and a significant section of public opinion as  a club of non-elected bureaucrats, which assumes that it can tell sovereign governments how to manage their budgets, and even how to apply austerity measures that are deemed to be inevitable.

This is the main disadvantage of the organisation that is supposed to embody European governance. Although they benefit from the approval of the European parliament, the European commissioners are not elected by citizens, but designated by member states.

This lack of direct suffrage has caused many Europeans to question the legitimacy of their actions. That is why it is desirable that they should be elected, either directly by citizens, or, perhaps more realistically in the short-term, by the members of the European Parliament.

“To deal with the crisis more decisively,” the Madrid daily writes, Van Rompuy proposes that the European Financial Stability Fund [EFSF] “recapitalise banks directly, and he does not preclude issuing Eurobonds in the long-term.”

For El País, Van Rompuy and Barroso -

... are finally getting to the heart of the financial problems plaguing Europe: an economy paralysed by the complete lack of credit due to the banks’ mistrustful unwillingness to lend.

The Commission, meanwhile, wants to strengthen budgetary control of the countries in the eurozone by gaining the right to –

... demand [of national parliaments] a revision of the draft budgets if the Commission considers that they fail to fulfil obligations under the Stability Pact.

“The rich countries have had their way”, comments the Warsaw daily and names them all: the UK, the Netherlands, Sweden, Austria, Denmark and Finland. These member states had long fought for the EU budget to be frozen in real terms, arguing that the Commission was in no position to raise spending when everyone around was making cuts. “The result of the negotiations on the 2012 budget may prove a precedent for the much more important bargaining over the 2014-2020 Financial Framework”, concludes the Warsaw daily, stressing that the UK, supported by France and Germany, has already made it clear it won’t agree to any spending growth above inflation. The new EU Financial Framework is to be endorsed by the end of next year.

German Chancellor Angela Merkel, French President Nicolas Sarkozy – increasingly dubbed 'Merkozy' in the European press – but also Eurogroup President Jean-Claude Juncker, IMF Managing Director Christine Lagarde, European Commission President José Manuel Barroso, European Council President Herman Van Rompuy, ECB President Mario Draghi, and Olli Rehn, the EU Commissioner for Economic and Monetary Affairs. The group was born from a chance meeting at the Frankfurt Opera House on 19 October, where all of its members attended a ceremony to mark the end of Jean-Claude Trichet’s tenure as President of the ECB.

For El Mundo, the existence of the informal group has highlighted:

... a conflict between democratic legitimacy and the urgent need to find a solution to the euro crisis. […] Some analysts argue that the new behind-the-scenes government is also the best possible counterweight to the power of “Merkozy”, because the inclusion of European institutions in the GdF also gives a voice to less powerful states.

Critics of the GdF, who claim it is responsible for the political assasination of George Papandreou and a knife stuck in Silvio Burlusconi’s back, have dubbed it a ‘politburo’ in reference to its absence of democratic legitimacy, while its supporters maintain that it is a necessary antidote euro crisis.

Famous for its zealous commitment to correct spelling, FAZ notes that “the first page alone has nine mistakes.” Responding to the ensuing shower of complaints, the editor of the “cocky” publishing house explained in a press release to accompany almost two million published copies that he “has come to accept these mistakes, for economic reasons on the one hand, but then also because literature is not a spelling test.” He also acknowledges that the publishing project was “a good deal”, funded as it was by the European Commission “with a six-figure sum”. For its part, Brussels says it “wants to dig deeper” on the grant issue before responding officially.

To prove to sceptics that he is more alive than ever, Barroso pulled out two flagship proposals meant to calm the financial markets: First, a tax on financial transactions across the EU. Second, eurobonds for the eurozone... the sole offer that the same Barroso placed on the table last year at the same time, (the green light to a European debt facility to finance targeted investment projects), never saw the light of day [...] If he wins through just on the issues of financial regulation, at the height of the crisis, it's because he spent a good deal of his first term (2004-2009) unravelling what little regulation of the markets was already in place. [...] How can he claim today to have the means to put the markets back in their place?

For Público in Lisbon, Barroso's speech had “an essentially political objective: to reject the Franco-German proposal for an economic government of the eurozone that was presented by Chancellor Angela Merkel and President Nicolas Sarkozy during their meeting on August 16.” 

Yesterday, Mr Barroso told them that the 'economic power' in the Union can be wielded only by the Commission. And he said it before the only EU institution he can rely on in this affair - the European Parliament. His speech gives us a little taste of an admission of weakness. The Commission that he chairs has almost vanished in battle in the maelstrom of the European crisis. It has been systematically marginalised by the determination of the Franco-German duo. It has looked on helplessly at the transfer of power to Berlin. And if there was indeed a protagonist in the real fight against the destructive effects of this crisis, it was the European Central Bank. One might say that this shift is inevitable, and that the debt crisis has only speeded it up.

In any event, we must recognise that the Commission is taking action, notes El País, writing that Barroso's intervention before the European Parliament has been

one small example of realism in the doldrums of blunders and useless rhetoric that has characterised the management of the crisis in the eurozone lately.

Among the proposals put forward by the President of the Commission, Público singles out the figure of 0.01 percent: that's the amount of the “Tobin tax” that Brussels plans to impose on transactions among banks by 2014:

The figure shows the timidity of the initiative, compared to the 4,600 billion euros that European citizens have injected into the financial system since the start of the crisis. We will just have to wait and see if it will succeed, since the elephantine decision-making machinery of the Union requires that any modification of EU tax law be approved unanimously by all member states - and the British government has already expressed its opposition to the tax.

No offence to the President of the Commission, but he is not the one who should be giving the “speech on the state of the Union” - it's Angela Merkel who should, affirms editorialist Marek Magierowski in Rczespospolita:

He is not the one who pulls the strings and it won't be him who will be blamed for a possible disintegration of the eurozone… The EU is ruled by the German chancellor and everybody - world politicians, economists and investors alike - is keeping their eyes fixed on her [...] Barroso's speech was frequently interrupted with ovations from the MEPS and from leaders of the conservative parties in the European Parliament, whose comments betrayed something approaching enthusiasm. Everyone played their role perfectly wonderfully in the theatre of the EU. But real life is elsewhere.

The show of force by the President of the Commission, however, persuaded Maroun Labaki of Le Soir that

... José Manuel Barroso is a very able politician. A bit of tactics, some posturing, and great conviction: the President of the European Commission gave a grand and eminently political speech on the state of the Union'. [...] One can predict that an 'axis' was born yesterday between the Commission and the Europarliament. This rapprochement will be made de facto at the expense of the capitals and of the Council as a whole. The heads of state and government have true cause for worry...

With the euro stumbling, recession looming, unemployment rife, disaffection among young people becoming intolerable and the Mediterranean awash with turmoil, part of the European press just had to let rip, with great broadsides of irony, against the Eurocrats and their relentless desire to regulate every aspect of our lives without consulting us or, indeed, without any mandate.

Harmonising certain aspects of our environment is also what some  33,000 "Eurocrats" in Brussels are good for (just for the record, the City of Paris employs 40,000 people). But indeed, it is the Member States that have agreed to this, since it is they who approve the treaties that establish the competencies. Just as in national ministries, it is technocrats who develop the measures, which are then adopted by the executive (the Commission) and approved by the representatives of the people (the Council and/or Parliament). As some readers have pointed out, the process is no less democratic than it is at national levels.

That the EU is clumsy in its communication, both in terms of the form as well as – so often – the timing, has been fairly well explained: its declarations come across as cold, peremptory and formulated in most cases by persons (starting with the commissioners) that we are not familiar with and who do not speak our language.

Is a pedagogical effort perhaps in order on their part? Undoubtedly. Is greater transparency in the procedures for developing and adopting Community measures desirable? Certainly. But let's stop blaming the EU for doing what it has been created to do, among other things, by our own dear representatives.

Translated from the French by Anton Baer

Like the architect who was locked by King Minos, along with his son Icarus, inside the labyrinth he had built himself, the European Union finds itself cornered by the crisis at a point where all the difficult paths lead to a dead end. On one hand, austerity policies imposed upon the Greeks for the past year: not only have they had practically no effect on either reducing the deficit or reforming a corrupt and inefficient system but, as many experts pointed out at the time, they annihilated the possibility of economic growth, which is necessary to surmount the crisis.

On the other hand, the bail-out packages: the 110 billion euros promised widened the psychological gap between northern and southern Europeans and led to a hardening of the German position during the negotiations, but without actually relieving the Greeks or proposing any real prospect of ending the crisis.

There is another option; restructuring the Greek debt. But that leads to immediate deadlock because European leaders fear that the market reaction will result in extending the crisis to other eurozone countries.

At the same time, some of these same leaders are heading towards greater economic integration and “crisis federalism” which would lead to the creation of euro bonds and a supranational coordination of fiscal and budget policies. But this latter option is stumbling over the divergent interests of the member states. In any case, increased political and economic integration is counter to prevailing public opinion which has expressed its euroscepticism in the ballot box.

In short, wherever one looks, the EU-Daedalus is in bad shape. And like the mythical character, it will have to find a way out from the top of the labyrinth. Surprisingly, a part of the solution came from the European Commission. This week, at the presentation of its 2014-2020 budget, the Commission ascribed “priority funding” to “cross-border projects in energy, transport and information technology”. It also proposed “significantly more money for Research and Innovation to invest in our competitiveness; and more funds for Europe’s youth”.

In other words, it has identified the fields Europeans should invest in (and invest themselves in) to climb out of the economic and social decline in which they are mired. Unfortunately, these fine prospects are in contradiction with the policies imposed by Brussels and the Member States on the countries in crisis and with the policies of most European countries. Furthermore, it’s known that the good intentions expressed by the Commission before the budget discussions which are about to begin don’t commit it to anything since, if all of its ambitions are revised downward, it will be able to shift the blame onto the Member States, or the Parliament.

True austerity versus paper ambitions: European leaders won’t be able to govern for long with this contradiction which the peoples of Europe live with daily. It’s when he forgot about reality that Icarus, son of Daedalus, scorched his wings.

Translated from the French by Pat Brett

“Less developed Central Europe has obtained a continuation of regional funding, while the priorities of the moment – energy and Internet access – appear to be respected. On the other hand, the financial transaction tax proposed by Brussels to alleviate pressure on the European treasury has already been greeted by a British veto," reports Le Figaro.

The tax on financial transactions (TFT) or Tobin tax, "levied at a rate that has yet to be determined, would affect all the activities of financial institutions within the EU and bring in between 50 and 70 billion per year," which would provide the EU with its own budget resources.

For Libération, the proposal amounts to "a revolution, especially when you consider that how the alter-globalisation movement has campaigned for just such a measure, while the incumbent EU administration is the most right wing to hold office since 1958 – a faithful reflection of the balance of political power in Europe (22 out of 27 member states have right-wing governments)." However, there is no guarantee that member states will be in a hurry to introduce a tax which a spokesman for the British government, quoted by Euobserver, has described as "unrealistic."

Another bone of contention between the Commission and member states is the issue of cuts to what Le Figaro terms “eurocrats’ salaries”: this group of "of approximately 50,000 privileged [civil servants], who have benefited from a remarkable immunity to the crisis, will have to endure the most hard-hitting wage review in 50 years," remarks the newspaper.

"To speak of a flare-up between the unions and management – which in this case is the Commission – and the shareholders, otherwise known as member states, is an understatement.” Brussels will have to act quickly to resolve a what is a serious equity and credibility issue: it cannot ask everyone else to tighten their belts while it continues to enjoy such an opulent lifestyle “insists the treasurer of one member state. Eleven countries – including France, Germany, the United Kingdom and most of northern Europe –  are now involved in the struggle, and have issued an ultimatum to José Manuel Barroso. Le Figaro has obtained a copy of a letter in which they insist: 'a significant reduction in spending, including cutbacks on wages, pensions and perks, will have to be implemented'. The offensive against “exisiting entitlements” has heated up, at a time when Greece has been forced to make enormous sacrifices."

As it stands, explains Público, "European rules dictate that structural funds to support development of the poorest EU countries must be co-financed, to the tune of 15% to 25%, by national governments." However, the crisis and the austerity polices adopted by the majority of member states "have severely limited their capacity to benefit from European aid." As of last week, the Commission has proposed that Greece be allowed to reduce its contribution to the structural funds, and that similar conditions should apply, starting in 2014, to all countries that benefit from structural funds.

The European Commission is set to launch the debate on the 2014-2020 EU budget on 29 June, and is also proposing to freeze spending at the 2007-2013 level. Policies described as “future-oriented” – research, innovation, education and neighbourhood policies – will nonetheless be granted budget increases, as will justice and interior affairs.

The recommendations are made within a particularly difficult economic framework, Deaglio notes. “If public debt is not reduced, there is no growth. Without growth, the reduction of public debt is enough to push the economy towards a new recession,” he explains. Yet Brussels has chosen to “come down hard on the brake of rigour,” he says. What the Commission is saying in substance, he added, is “we don’t want to impose austerity to the Europeans, but it is a fact that excessive public spending is limiting our growth potential”. The Commission deems that the government plans submitted “lack ambition” or are “too vague,” and it suggests a series of priorities: raise the retirement age; cut back on early retirements; link wages to productivity; cut red-tape for businesses and provide research and development aid. “It’s good in principle, especially for someone who isn’t accountable to the voters, but the application of these rather noble resolutions is very difficult for governments faced with rising unpopularity,” Deaglio says. He notes that the Commission is “particularly severe with Italy,” seen as “the key country for the strength of the euro”.

Another key country is Spain, where the Commission’s recommendations received a rather chilly reception. For Spanish daily La Razón, they “seem neither sound nor opportune,” because they would “unleash an inflationary process with lethal consequences for an economy in stagnation such as Spain’s”.

The Commission is harsh also with Belgium, which is asked to quickly reform nothing less than its economic structure, notes Brussels daily De Morgen. For the paper, the EU has squarely placed “another bomb under the formation of the government. Although, a year after the legislative elections the parties are still negotiating the formation of the executive, the Commission’s recommendations come and disrupt the talks. According to another daily, De Standaard, they have even “struck at the heart” of Elio Di Rupo, the Francophone Socialist charged with forming a new government. They also “widen the gap between the [Socialists] and the N-VA”, the main Flemish party, which shares Brussels’ approach. “There is no need for Di Rupo to come up with a programme, [EU Commission President José Manuel] Barroso has done it for him, De Morgen wryly notes.