Belgian central to resolving continental crisis

For almost a year, European leaders have laboured over a sprawling package of new fiscal rules that would force eurozone countries to rein in excessive spending and make their economies more competitive – a key slate of reforms as they seek to dig out of a debt crisis that has threatened the single currency.

But as they grind towards the legislative finish line, one unlikely obstacle is standing in their way: Guy Verhofstadt, a gap-toothed former Belgian prime minister.

Mr Verhofstadt, the energetic and outspoken leader of the centrist LiberalDemocrats in the European parliament, has become the legislator most feared by member states and the European Commission as they try to win parliament’s approval for the new rules.

“Verhofstadt holds the key,” said a senior European diplomat involved in the talks. “He is himself a separate institution. He has an enormous impact on the opinion of the parliament.”

Mr Verhofstadt is determined to use that influence to toughen rules he believes were unduly softened by national governments. At stake, he argues, is not only the survival of the euro but the opportunity to forge a closer union – one in which member states’ budgets, pensions and tax policies are more closely supervised by an empowered Brussels.

“It’s very clear that those who call for less Europe cannot say how we solve this crisis,” he said in an interview, arguing that a break-up of the eurozone and the reinstatement of national currencies would prove disastrous.

Such boldness is unsettling European diplomats, who are desperate to wrap up a deal this month. Any delay would set back for at least another budgetary year a central element of the reforms: the ability to fine governments that overspend. It could also send a worrying signal to financial markets already doubting Europe’s ability to respond to the crisis.

The next few days will be crucial after Hungary, the current holder of the EU’s rotating presidency, said it would make a “final push” in Strasbourg, the home of the European parliament, to try to narrow differences between the parties and identify a possible compromise.

Even if he is relatively unknown outside of Belgium, Mr Verhofstadt has long been one of Brussels’ most colourful and recognisable figures. He came within a British veto of becoming president of the European Commission in 2004 – a setback that left him “devastated”, according to Pat Cox, then president of the parliament.

Mr Verhofstadt channelled his disappointment into “The United States of Europe”, a federalist manifesto that called, among other things, for a common European army and government – a vision at odds with the recent rise of populist, eurosceptic parties in some corners of the EU.

He also found a home for his ambition in a newly empowered parliament. Traditionally, weighty legislative matters like the new fiscal rules would have been off limits to MEPs.

But under the 2009 Lisbon reform treaty, the chamber assumed near-equal powers to the commission and member states. Mr Verhofstadt seized on that authority to become a leading voice in the fiscal debate.

In October, he blasted Paris and Berlin for a secret deal they cut at the French resort town of Deauville that would give governments more wiggle room to avoid fines.

Although the Liberal Democrats are only the chamber’s third largest group, they could be pivotal to a deal because neither the centre-right nor centre-right group commands an outright majority.

In the Berlaymont, the commission headquarters, officials tend to bristle at the Belgian, whom they dismiss as a grandstander.

“The Eurobond is not going to happen. Full stop,” one said, rejecting Mr Verhofstadt’s proposal for a common EU bond to help struggling governments raise money more easily.

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