COMMONS

Impact of Treaty on Stability, Coordination and Governance

03 April 2012

The Treaty on Stability, Coordination and Governance is impossible to enforce, there are serious concerns over the rule of law and no concessions for UK.

The Treaty's impact on the eurozone

The Stability, Coordination and Governance (SCG) Treaty does little towards solving the eurozone crisis, other perhaps than providing some comfort to international markets, says the European Scrutiny Committee in its report, published today, into the Treaty's impact on the eurozone and the rule of law. Moreover it is possible that the Treaty will prove to be politically impossible to enforce. As undesirable as it may be, some form of breakdown of the eurozone clearly remains possible.

The approach taken to proceed with the fiscal compact raises a fundamental question about the application of the rule of law within the EU. The SCG Treaty would have been an EU treaty but for the veto. However, the EU institutions and the governments of the 25 Member States who have signed the Treaty, have embarked on a dangerous precedent in seeking to attain their political objectives irrespective of the rule of law in the EU.

The Government has made clear that it has serious reservations about the legality of what has been done, but the question of what it intends to do remains unsatisfactorily unresolved. When looking at the unprecedented letter sent from Sir John Cunliffe, the UK Ambassador to the EU, to the Secretary-General of the Council on 22 February, it appears that the Government does not want to stand in the way of 25 States reinforcing the eurozone, but sees the use of the institutions outside the EU Treaties, without the consent of all 27 Member States, as unlawful, irrespective of the consequences to and the lack of concessions for the United Kingdom and the current failure to take the issue of legality further.

To the Committee it therefore seems that the SCG Treaty must be deemed unlawful in the Government’s view. But when the Minister, Rt Hon David Lidington, was asked in evidence about the Government's concerns, he said that to suggest it was unlawful was "taking it a step further".
 

Comments from the Chair

Chair of the Committee, Bill Cash MP says:

"Politically and legally, it is profoundly unwise for the Government to suggest taking action, and then not to explain how it intends to carry it through, or what concessions are now being sought and achieved.
The approach to this Treaty provides further and ever more disturbing evidence of the European Union, in the context of increasingly coercive attitudes by Germany and France and the European establishment in pursuit of further and deeper political and legal integration, dangerously ignoring its own precepts for political ends. This is despite France and Germany’s own original failure over the Stability and Growth Pact. The Government must clearly state as soon as possible what action it now intends to take on the Treaty".

Although questions have been raised as to what the UK achieved by the use of its veto, the Committee concludes that the veto was justified because of the very real concerns about a breach of EU law, even if this was not the reason given exclusively for the use of the veto in the first place. The Committee notes that there is an increasing tendency for the EU to propound the virtues of the rule of law but not to apply it in practice. 

Further Information 

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