Denmark’s six-month presidency of the European Union ended as it started, in the shadow of the European sovereign debt crisis. Yet, the country has helped negotiate several agreements which could see Europe’s economy emerge stronger in the long run.
Under the theme of “Europe at Work”, the country outlined four priorities for its time in the job: a responsible, dynamic, green and safe Europe. These encompassed its wish to tackle the debt crisis, boost employment and growth, and quicken Europe’s transition to a green economy.
Between January 1 and June 30 it helped bring consensus among the 27-member EU bloc on issues ranging from higher energy efficiency in member states, to better monitoring of the financial sector.
During crisis, turmoil and huge debates about what is going to happen in the future, “we have managed to say ‘This is an EU of 27 states and we can take concrete decisions together even though we are so very different’,” said the economy minister, Margrethe Vestager, who chaired EU ministerial meetings on finance and economy in the past six months.
Many of those decisions have been about how to deal with a Europe burdened by debt and low economic growth, and whether deeper austerity or investment in growth is the right way out of crisis.
“I think that it is about both things. Wise decisions have already been taken and we need to implement them and make sure that we get financial order in the European house, but also get the growth machine working,” Vestager told Xinhua in a recent interview.
The headline agreement under Denmark’s watch was the so-called Fiscal Compact Treaty, adopted by 25 EU member nations, which seeks to impose tougher budget discipline on EU countries and penalize states exceeding a 3 percent budget deficit target.
Country-specific economic policy recommendations for all 27 members were also adopted by the presidency for the first time, as was enhanced surveillance of euro countries with financial problems.
Stricter liquidity and capital requirements for banks were also agreed, as a way to control risks and prevent future financial crises in the EU.
Tougher regulation of trade in financial derivatives was approved in a bid to insulate the financial system from failures in individual banks.
“A number of proposals have been passed and will be implemented. And I think that is the basis for a much more solid banking and financial sector in Europe,” Vestager said.
Moreover, the Danish residency has prepared the basis for agreement of the seven-year EU budget (2014-2020), also known as the Multi-annual Financial Framework, worth some €1 trillion, and which is scheduled to be agreed at the end of 2012.
The budget covers common agriculture policy, cohesion policy, and research and development policy among others, and Denmark pushed to have these funds also used in direct job creating activities.
A notable failure was in finding agreement on the imposition of an EU-wide tax on financial transactions. Backed by France and Germany, and resisted by Britain and Sweden, among others, it was finally dropped from the presidency agenda for lack of unanimity among member states.
Still, PM Helle Thorning-Schmidt, who was the face of the Danish presidency, said she was “very satisfied” with the EU’s readiness to create growth and impose economic discipline.
“This has been about concrete results for citizens and businesses (in the EU), and we have delivered,” she told public broadcaster DR on Thursday.
“It is not so easy to get consensus on real solutions from 27 parties at a time when there is just talk of crisis and crisis,” she added.
However, the Danish presidency could have done more to communicate its results to citizens and businesses, experts here say.
Marlene Wind, director of the Centre for European Politics at the University of Copenhagen, said the presidency “has not been very visible” as the European debt crisis has grabbed all the headlines.
Major political and economic events such as the recent French and Greek national elections, a second bailout package for debt-rammed Greece, and a €100 billion euros bailout of Spanish banks, had also “overtaken” the presidency agenda in its final weeks, she said to Xinhua.
Moreover, Denmark’s status as a non-Eurozone country gave it limited influence in discussions concerning the 17-member common currency zone, and the neutrality expected from any EU president, means its ability to set the EU agenda was always going to be limited.
In fact, results of an opinion poll by DR released Thursday showed that 33 percent of Danes polled had no idea how the Danish government had discharged its EU presidency.
Yet Wind believes cabinet members and civil servants have worked hard to deliver a stable and scandal-free presidency, and that the presidency “delivered results, concluded as many dossiers as possible and prepared for Cyprus to take over”.
Cyprus is the third and last leg in a trio EU presidency with Poland and Denmark, but starts the job today under the shadow of having requested an EU financial bailout for its indebted economy.
“It is going to be very difficult and the Cypriots will need to get a lot of help behind the scenes, from the European Commission, from Poland and Denmark,” Wind said.
Growth and reform
The Danish EU presidency ended on a high note with EU heads of government agreeing to roll-out an EU growth and jobs pact worth around €120 billion, at the final top-level meeting during the Danish presidency in Brussels on Thursday.
EU leaders also agreed to establish a joint banking supervisory body for the Eurozone, marking a first step towards a European banking union. They added the Eurozone’s bailout fund could be used to stabilise bond markets without further austerity measures being imposed on those member countries which comply with EU budget rules.
Earlier in its term, the Danish presidency had negotiated issue of project bonds for investment in infrastructure projects in Europe, and agreed reform of the EU single market for goods and services to help boost competitiveness, among other long-term ways to boost growth.
Future measures for securing EU growth include a European treasury with powers over member states’ budgets and the issuing of so-called euro bonds.
However, economy minister Vestager said such actions must go hand-in-hand with cutting public debt, boosting competitiveness and reforming labor markets across the EU.
“The problem is, if it was just a question of spending, then we would not be in this situation. You have to do much, much more than being bailed out, because it is in your structures, in your reforms, that you find the solutions,” she said.