4. The present treaty gives an example of the sort of institutional mechanism needed: permanent structured cooperation (Art. 42 § 6 TEU, art 46 TEU, Protocol n° 10). Participation is conditional; it implies commitments, decisions are taken by participants only, most decisions can be taken by qualified majority, if commitments are not respected voting rights are suspended, states may decide to leave the cooperation. This system, devised for defence, has not been implemented because there is no appetite for defence cooperation at this moment, but it gives a sound legal basis for decisions by a limited group of member states, a basis which Eurogroup ministers (or Prime Ministers) do not have. It would also put an end to an anomaly: at present, member states may ask to leave the Union (art. 50 TEU), but they may not ask to leave the euro!
5. As we all know treaty modification is a lengthy process. Credibility should be enhanced by measures with an immediate impact. One such, abundantly debated, could be Eurobonds. Another would be to establish a single representation and a single quota for Eurozone countries in the IMF. Both these measures, as most others that can be imagined, have clear disadvantages. They also have many clear advantages, and the stuff of politics is to strike such balances.
6. A plan of this sort cannot be limited to technical institutional matters, because it requires strong support in public opinion. A first step to that effect would be to disseminate a better understanding of the unprecedented level of interdependence between European economies. Most voters accepted in 2008 that national governments had to save national banks, probably because they understood that their bank accounts were threatened. They should now be able understand that disorderly sovereign debt default in one part of Europe would make banks go broke in another, which could also threaten their bank accounts.
7. Most importantly, the deal must have a social dimension: a serious joint commitment to policies reducing the level of social inequality, which has increased recently to a point resented by a large segment of the population. And it should also have an ethical dimension, including a sincere collective effort to reduce tax evasion, and a joint decision to tax punitively unjustifiable levels of remuneration at the top echelon of major corporations, which is another source of resentment. Any European bargain must also be a social bargain.
There is no natural appetite, either in governments or in public opinion, for new sovereignty bargains or social compacts. In the normal course of events, such decisions are only taken when the alternative is an imminent crisis of disastrous proportions. We may be nearing such a moment, and it is therefore wise and useful to elaborate on solutions.
