Today, the European Commission has made several proposals on deepening the Economic and Monetary Union, following up on the Five Presidents' Report published in June. It proposes to establish "competitiveness boards" in each member state, an advisory European fiscal council, more unified external representation of the Eurozone and also further steps to deepen coordination of Eurozone economic policies during the European Semester.
The S&D Group welcomes the Commission's swift initiative and supports its approach of looking at the Eurozone more as one large economy, not just a group of countries. However, the Socialists and Democrats want to go further to tackle economic and social problems of the Union and deplore the fact that the Commission has not made any proposals to strengthen democratic accountability for decisions taken in the context of European economic governance.
S&D Group vice-president for economic and social policies, Maria João Rodrigues, said:
"The Commission rightly presses ahead with proposals to complete the EMU. This is crucial for making progress despite the differences of views among member states in the Council. The Eurozone's fragility is a big threat for the whole European Union and the Parliament is therefore fully engaged to strengthen the Eurozone before the next crisis comes.
"The Commission makes some useful proposals for proper assessment of the Eurozone's overall budgetary position, apart from looking at individual member states. It also rightly advocates a broader concept of competitiveness, including innovation, strength of human capital and other longer-term determinants of productivity. But this is not enough to prevent a race to the bottom! We need much more investments to strengthen economic convergence in the short term and consider social indicators like poverty and inequalities in plans to reduce macroeconomic imbalances. All these concerns should already be present in the first stage of reforming the EMU."
Elisa Ferreira, S&D coordinator for economic and financial affairs, noted:
"It is appalling that the Commission has been completely unable to draw the lessons from the way the crisis was managed, particularly inside the Eurozone. There is no critical evaluation neither of the legal instruments created for the economic governance - 6 pack, 2 pack and fiscal compact - nor of the huge problem that was created by the handling of the crisis from the Community method approach to an intergovernmental setting based on the Eurogroup. The 2 pack and 6 pack legislation was agreed by co-decision between the Parliament and the Council and centred on the Commission. The Commission now proposes to change the interpretation, the content and the compatibility of all these instruments without a prior evaluation of what went wrong and placing the Council and the Eurogroup in the centre of the process, without recognising that this was precisely one of the most dramatically negative elements of the crisis management. This is shocking."
S&D Group member Pervenche Berès, the rapporteur of Parliament's recent economic governance report, added:
"Since the start of this discussion about the completion of EMU, the necessary democratic strengthening has been a central concern. It is, therefore, unacceptable to see that the Commission proposals on the new European Semester make it more difficult for the Parliament to influence the process leading up to the adoption of the Euro area recommendations and the AGS conclusions ahead of the Spring Council, since the timeframe is much shortened. It cannot be that European economic policy recommendations completely by-pass parliamentary legitimization. This cannot become a simple deal between Commission and Council!"
"Parliament has repeatedly called for a proper inter-institutional agreement on economic governance, including in two reports I was in charge of (Note: the CRIS special committee report in the last parliamentary term, and this year's report on European economic governance). The Five Presidents' report was notably clear about two main EMU reform needs: more democracy and more Europe. The proposals made by the Commission today fail these needs. They do not even mention the inclusion of the European Stability Mechanism into the Community framework. On the external representation of the Euro area, it is more than a paradox to see the Commission proposing not only to put this European Parliament outside of the game, but also itself, by offering this seat to the president of Eurogroup."
This criticism was also issued by Roberto Gualtieri, chair of the European Parliament's economic and monetary affairs committee:
"Today's Commission package contains some interesting and useful progress, such as on a Euro area recommendation, but I deplore its lack of overall ambition in view of all the challenges the Eurozone faces today. We legitimately expected, as Parliament, to be properly involved in the shaping of this first phase of EMU reform. I therefore can only object to the choice of legal instruments made by the Commission, turning EMU reform into an exclusive affair between Commission and Council. I do not think that this is the spirit of the current Treaty or in any way in line with the inter-institutional practice in this field of the past years. The Commission is wrong if it thinks that reform will be better and speedier by excluding the European Parliament and by putting itself in the hands of the Council.
