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Thomas de Maizière, currently the interior minister of Germany, but he is the one who negotiated the eurozone aid package in Brussels after Mr Schaeuble was taken ill:

“The philosophy of Europe is based on everyone doing their homework, so there are no bailouts. Article 122 [the emergency aid article of the Lisbon Treaty invoked by the European Commission to launch a rapid-reaction €60 billion loans mechanism for eurozone members, which Germany said could not be used as the legal basis for a much larger €440 billion eurozone defence fund] is an article intended to cover natural disasters. It is not a legal basis for helping countries that have caused their own problems by overspending. What reasons can there be for deviating from this principle? One is if the euro is in danger. A second precondition is that countries being helped must do everything to help themselves. Those two preconditions have now been met, and [the eurozone defence fund] is in line with German law:  we are providing loan guarantees under strict conditions, including conditions set by the International Monetary Fund.”

French Europe Minister Pierre Lellouche:

It is an enormous change. It explains some of the reticence. It is expressly forbidden in the treaties by the famous no bail-out clause. De facto, we have changed the treaty.”

Sources: The Economist and Financial Times

The correct term is not “we have changed the treaty”. It is “we have broken the treaty”.

One thought on “French and German Ministers Comfirm Eurozone Bailout is a De Facto Change to the Treaty

  1. A Crisis Cabinet is the Missing Link in the Eurozone Crisis debate.

    The President of the European Council Herman Van Rompuy proposed a “crisis cabinet” reports Honor Mahony of the EUObserver on May 25, 2010 in article Van Rompuy Wants Clearer Hhierarchy To Deal With Future Crises. He said that “there is not much hierarchy or organic links between the main players and the main institutions”. European Comission President Jose Manuel Barroso, the head of the European Central Bank Jean-Claude Trichet and Mr Van Rompuy himself would be the triumverate in this “crisis cabinet”. And Honor Mahony again reports that at the same time the President of the European Commission, Barroso, called Germany’s plans on improving economic governance in the eurozone as “naïve”. He believes that any treaty reform is not feasible in the moment.

    The May 2010 EU Finance Ministers Summit announced the foundation of European Economic Governance and waived state sovereignty. I believe The EU Crisis Cabinet could very well emerge to provide European wide policy and mechanisms for unified economic, banking, monetary and seigniorage government without Treaty reform or State Parliament approval.

    A currency crisis arose which took us out of the age of national independence into the age of mutual interdependence.

    We are now living in age of global governance where leaders meet in summit and announce policy, that is rules of governance; national sovereignty is foregone for the common good of all; then task forces develope consensus, and make further policy recommendations for final committment by leaders, who announce a Framework Agreement, which sets forth the economic, political, monetary and seigniorage rules for the region. Because of crisis, the word, will and way of the leaders supersedes constitutional law and national parliaments. A hierarchy of leaders, workgroups, and stakeholders govern, and the people follow.

    Can there be any doubt that the 27 member Eurozone area is headed for stronger governance? Herman van Rompu said …. Being in the ‘Euro zone’ means, monetarily speaking, being part of one ‘Euroland’.” relates Forside blog which provides the following quote: “I have no doubt that monetary union can function very well without far-reaching political union. On the contrary, there could even be a risk that excessive centralisation or harmonisation of economic policies might stifle healthy competition and weaken economic efficiency”. – Then ECB Chief Economist, Otmar Issing, 2001.

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