Various developments across Europe boded ill for future fiscal integration on the Continent, a move many see as the only way to resolve the fundamental issues underlying the current sovereign debt crisis roiling the euro zone.
A statement from the Czech Prime Minister, the defection of a member of the opposition Irish cabinet, rumblings from Poland and massive street protests in Madrid all combined in their opposition to the fiscal austerity program EU nations are expected to ratify this week as a way to face down the ongoing credit crisis. More actions are likely to occur later in the week, ahead of a EU summit Friday, where some of the EU member nations that have not done so already are expected to sign the fiscal discipline treaty.
The treaty would require ratifying members to keep their annual deficits within 0.5 percent of gross domestic product, an action that would result in massive cuts to public services and tax increases for many member nations, whose deficits exceed those parameters many times over.
In Ireland, Eamon O Cuiv, deputy leader of Ireland's largest opposition party, resigned after his party joined the government to support for the agreement on budget discipline. While Irish leaders are expected to sign the treaty on Friday, it will still be subjected to a referendum via popular vote, following a decision late Tuesday. The chances that the population will reject the referendum are considered high.
In Poland, Prime Minister Donald Tusk said that, while the government wasn't backing out of earlier commitments to sign the agreement, it may delay signing to ponder the language of the treaty since, as he said our signature depends on whether we're 100% convinced about every word in the final draft of this treaty.
Meanwhile, the Czech Prime Minister noted his government, one of the only two to have rejected the agreement when it was brought up late last year, was holding fast to its position, and would not be discussing the agreement in the near future.
The European fiscal compact, officially the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, was negotiated by European leaders between Dec. 9, 2011 and Jan. 31 of this year and agreed to in principle by all 27 EU member states except the United Kingdom and the Czech Republic. It sets strict parameters as to the budget decisions member countries can take, with the underlying goal of creating a more-perfect fiscal union. It has already been ratified by 12 countries, and the rest have until January 1 of next year to sign.
Observers believe public opposition to the measure, which some see as giving up national sovereignty, could derail the agreement.
That seems to be the goal of thousands of anti-austerity protesters, who also gathered Wednesday in Brussels, Paris and Madrid. The largest demonstrations, in Spain, were led by students, who protested against deep cuts to education budgets.