The European Commission’s reflection papers aim at taking a long-term view. We understand that not everything can be resolved in the short term, and that such a process of reflection can be helpful in preparing the ground for major reforms.
However, Europeans need to see a stronger economic and monetary union emerging right now - both more resilient and more effective in being an engine for sustainable and fairly shared prosperity. Already, past years have been marked by intense reflection on this matter. Clear proposals for reform have been set out, not least in the consecutive Four and Five Presidents’ reports, in the European Commission’s own communication on steps towards completing EMU, and in several important European Parliament resolutions, the latest of which on the need for a budgetary capacity and a strong European Pillar of Social Rights.
Therefore, we urge the European Commission to take responsibility and to present as soon as possible - and in any case in good time during this parliamentary term - legislative, institutional and financial proposals most of which can already be accomplished within the current limits of the Treaties, in order to complete EMU with necessary social, fiscal and budgetary policy capabilities.
There is no room for complacency or for reform fatigue at time of a rising tide of populism on both sides of the Atlantic. Europe cannot afford to procrastinate but needs to deliver. The existing governance system is not yet strong enough to tackle potential future crises and shocks as it should, nor is it yet sufficiently good at reaching the goal of full quality employment, generating sustainable growth and social cohesion. Action must be taken in order to mitigate negative spillover effects and to bridge the widening economic and social divides within the EU and the Eurozone. The challenge of clarifying the specific relations between the member states of the Euro area also needs to be addressed without waiting for the final result of the Brexit negotiations. Last, but not least, the mutual obligations between euro and non-euro member states should be taken into account, while the EU as well as the non-euro area Members should do their utmost to create the conditions for joining the euro area as soon as possible.
Without a well-equipped and well-functioning euro area, the EU will not be able to address successfully the many complex challenges of our time. At the heart of these lies the imperative to transform our model of development in line with the COP 21 agreement and the 2030 United Nations Sustainable Development Goals, to which all our Member States did sign up to in 2015.
During the crisis, the Economic and Monetary Union had to confront existential threats due to a combination of inadequate policy decisions, growing divergences within and among the economies of the Member States inside the euro area, ill-designed rules and a lack of critical policy instruments and institutions. This has been widely recognized, and some changes have occurred - such as progress towards a proper banking union, and a somewhat more flexible use of fiscal rules.
However, despite the ambitious plans outlined in the consecutive Four and Five Presidents’ reports, and the repeated calls and multiple proposals emanating from the European Parliament, further essential changes have still not even been initiated. Precious time has already been lost. This is particularly alarming in the context of today’s unstable and unpredictable global economic and political environment, and at a time of record-low interest rates, of persistent inequalities and high unemployment in a number of Member States, in particular among younger people and among women. The next crisis may be closer than we think, and the EU should speed up the completion of EMU before it could be too late.
The deepening of the economic and monetary union should include:
- A new policy framework, comprising a revised set of rules governing macro- economic, as well as macro-social, imbalances and budgetary surveillance to meet the multiple challenges of achieving full quality employment, economic and social cohesion, efficient and fair taxation, fiscal soundness, as well as environmental sustainability
- A Convergence Code, to be adopted under the ordinary legislative procedure for a five-year period to guide the euro area towards new economic, social and environmental convergence, ensuring a more sustainable and cohesive Europe
- A new agenda of future-oriented reforms, in which the economic, environmental, and social dimensions of sustainable development are treated as indivisible and equal
- A comprehensive and ambitious sustainable investment strategy combining existing and new instruments and resources
- A fiscal capacity to support upward convergence and counter asymmetric and symmetric economic shocks.
- The completion of the banking union, including support to an accelerated clean-up of bank balance sheets to improve growth prospects, a credible European deposit insurance scheme and a common fiscal backstop for the Single Resolution Fund
- Reinforced democratic ownership, legitimacy, accountability and control based on the Community method, with both a significantly reinforced role for the European Parliament at European level and of national parliaments at Member States’ level
- An improved European Semester process, including the formalization of the euro area aggregate fiscal stance as a key tool for policy formulation and implementation across EMU.
- A Common Corporate Consolidated Tax Base, to ensure that profits are taxed where the economic value is created, and set up a fairer corporate tax system in Europe
 The S&D Group has presented detailed and still relevant proposals for the deepening of EMU in its position paper of April 2015. The Party of European Socialists has formulated detailed proposals in its Presidency declaration of June 2016 and in the conclusions of its high-level working group on EMU.