French court hands Hollande victory with EU ruling

Reuters News
Posted: Aug 09, 2012 2:56 PM
French court hands Hollande victory with EU ruling

By Catherine Bremer and Daniel Flynn

PARIS (Reuters) - France's Constitutional Council ruled on Thursday that the EU's budget responsibility pact did not require a change to the constitution, easing its path to ratification and removing a headache for Socialist President Francois Hollande.

The ruling allows Hollande's government, which had insisted it would not write a budgetary rule into the constitution, to press ahead with implementing the pact in September using a "super-law" which it can pass with its parliamentary majority.

A constitutional reform would have required a three-fifths majority of a special joint session of parliament, forcing Hollande into an embarrassing reliance on the conservative opposition and potentially delaying ratification until December.

It would have also entailed a lengthy debate on Europe which would have exposed bitter divisions in Socialist ranks, reviving painful memories of Hollande's failure in 2005 to unify the party in support of an EU Constitution, which was later rejected in a national referendum.

Many on the French left say the new pact allows Brussels to dictate national policy by allowing it to impose sanctions on countries that fail to respect a structural deficit ceiling of 0.5 percent of gross domestic product (GDP).

In its ruling, however, the Council said the treaty impinged no further on national sovereignty than existing EU budget rules, which impose deficit limits on euro zone member states.

"The Treaty of Stability, Coordination and Governance ... limits itself to repeating, and reinforcing, existing engagements," the ruling said. "There is no transfer of powers in terms of economic or budgetary policy."

The fiscal pact, signed by EU leaders in March, must be ratified by 12 countries before it can come into force in January, with the aim of calming investors concerned at heavy public debts.

Eleven EU member states have ratified the pact, excluding Germany, where the Constitutional Court will rule on September 12 on whether it contravenes the constitution.


Welcoming the decision, Hollande urged his government to press ahead with quickly drafting the appropriate legislation.

"The President calls on the government to rapidly prepare a draft law authorizing the ratification of the pact as well as a draft organic law to guarantee the correct application of the text," Hollande's office said in a statement.

There has been no suggestion the Socialists would vote against such laws, although some Socialist deputies had said they would be opposed to writing the rule into the constitution.

Debate within the Socialist Party over how much say EU institutions should have in national affairs is one factor hampering Hollande's efforts to reassure Berlin that he accepts a road map to fiscal union.

Elected three months ago on a pledge to revive France's flagging economy, Hollande also faces the need for unpopular spending cuts and tax rises to meet deficit targets amid rising unemployment and signs the economy will slip back into recession this year.

Socialist Party secretary Martine Aubry, the daughter of former EU Commissioner Jacques Delors, welcomed the Council's ruling but said Europe also needed to press ahead with a 120 billion euro growth stimulus package championed by Hollande.

The anti-European, far-right National Front party, which won 18 percent of the vote in a presidential first-round vote in April, said voters should have the right to express their views.

"It was very surprising that the European treaty was judged as in accordance with the Constitution ... but it doesn't matter: we must demand a referendum," said party vice-president Florian Philippot in a tweet.

France's Constitutional Council has ordered constitutional amendments several times in the last few years, notably for the adoption of the European Union's 1992 Maastricht Treaty, its 1997 Treaty of Amsterdam and the Lisbon Treaty in 2007.

The Council comprises nine appointees, including judges but also others with political or administrative backgrounds, plus surviving former French presidents, currently three in number.

(Additional reporting by Emile Picy; Editing by Alastair Macdonald and Philippa Fletcher)