United Kingdom

VI - Euro Plus Pact

On March 11, 2011 the Heads of State or Government of the Eurozone endorsed the Pact for the Euro. At the 24/25 March 2011 European Council, the same Heads of State or Government agreed on the Euro Plus Pact and were joined – hence the ‘Plus’ – by six others: Bulgaria, Denmark, Latvia, Lithuania, Poland, Romania (leaving only the UK, Czech Republic, Sweden and Hungary out).  
The objective of the pact is to foster competitiveness, foster employment, contribute to the sustainability of public finances and reinforce financial stability. In the Euro-Plus-Pact the Heads of State or Government have entered into commitments on a number of policy areas, in which member states are competent.        

What political/legal difficulties
did the United Kingdom encounter in the negotiation of the Euro-Plus-Pact, in particular in relation to the implications of the Pact for (budgetary) sovereignty, constitutional law, socio-economic fundamental rights, and the budgetary process?

Why Britain did not join

David Lidington MP (Conservative, Minister for Europe) noted that the pact is an instrument that has been created in order to help the eurozone to overcome its problems. Since Britain is not planning to join the euro, he believes that it is right to stay outside of it. He accepts that the position is different for those countries that see their future as joining the euro.

Britain side-lined?

David Lidington MP also noted that the language of the 24-25 March Council conclusions focus primarily on areas that fall under national competence and not so much on those measures of economic policy that are governed already by various articles of the Treaty—a single-market Europe by 2020, economic governance and macro-economic surveillance. Those are all areas of economic policy in which he believes all of the EU will need to talk and to act together. He noted further the explicit commitment written into the March conclusions that the Euro Plus pact will respect the integrity of the single market and should not undermine the functioning of the single market. Lidington later stressed that, if the members of the Euro Plus pact were to decide, hypothetically, to act in a way that ran contrary to the principles of the single market, they would be open as individual Member States to infraction proceedings in a way that any other Member State would be for breach of treaty obligations.

On 25 April 2012, Lord De Mauley stated that “Of course, as the euro area moves closer towards integration, we must and will remain vigilant to protect the UK’s interests. Where matters are, rightly, for discussion or agreement by all 27 member states, for example on the single market or financial services, they must be agreed by all 27 member states.”[1]

Status of the decision whether to join

He also noted that the decision whether or not to join the Plus-Pact is a political decision, not a legal decision. The Government, or any future United Kingdom Government could decide to change policy and take part in the pact without the need for a referendum, or indeed legislation.[2]

What other information is relevant with regard to the United Kingdom and the Euro-Plus-Pact?

The United Kingdom decided to stay out of the Euro-Plus-Pact

[1] House of Lords, Handsard, 25 April 2012, Col 1836 http://www.publications.parliament.uk/pa/ld201212/ldhansrd/text/120425-0002.htm

[2] Revised Transcript of Evidence Taken Before the Select Committee on the European Union: Inquiry on European Councils of 4 February, 11 March and 24-25 March 2011, Evidence Session No. 1. http://www.parliament.uk/documents/lords-committees/eu-select/Transcripts/cEUS040511ev1.pdf