Fast and harmonized answers
Mr Matolcsy opened his speech by saying that in the wake of the economic and financial crisis, the European Union and the Euro Area are facing challenges that require fast and harmonised answers. Accordingly, it is a priority for the Hungarian Presidency to adopt the six legislative proposals for a new structure of the EU’s economic policy, and to implement a Permanent European Stability Mechanism and the European Semester, a new procedural cycle aimed at the preliminary coordination of national economic and budgetary policies, while bearing in mind the targets of the Europe 2020 Strategy. The Minister pointed out that these tasks are closely and mutually linked, .
Building bridges between institutions
The implementation of the Presidency’s economic programme is subject to tight deadlines, according to the guidelines set forth in December at the European Council’s meeting gathering Heads of States and Governments. Accordingly, Hungary seeks to reach an agreement in the Council on the six legislative proposals on economic governance by the end of the first quarter, and wants to see “finalised and approved” legislative proposals in the European Parliament by June. According to Mr Matolcsy, this can be “a powerful message” for markets and investors.
In his introduction and in response to MEPs, the Hungarian Minister, Mr Matolcsy, stressed that “the Hungarian Presidency does not want to engage in a headless race for the approval of the six legislative proposals, but intends to seize every formal and informal opportunity to negotiate with both the EP and the European Commission. There is a need for ‘smart and good compromises,’ and the Hungarian Presidency will endeavour to build bridges that connect the three institutions."
Strengthening the Union, strengthening the euro
“A strong Euro Area and a stable single currency are essential to create a strong Europe,” said Mr Matolcsy several times during the hearing. This is supported by the preliminary coordination of national economic policies and the European Semester. Regarding the latter, the Minister said: “Slow growth, high and rising sovereign debt, and low employment are common to Member States, but these problems should be solved in country-specific ways, rather than by a one-size-fits-all programme.”
In response to a question about the Permanent Stability Mechanism, Mr Matolcsy stressed that it is managed by the Council, but it should be the subject of an intergovernmental agreement, given the EP’s and the ECOFIN’s lack of decision-making competence. He thinks that it is a “good idea” to issue euro bonds, but "we must first fix ourselves” and strengthen the Union and the euro, the aim of each proposal by the Presidency.
Financial services
Mr Matolcsy also talked about the great deal of legislative work to be done in financial services. The Presidency is making efforts to ensure the cohesion of different regulations and an increase in market transparency. This also applies to derivatives markets. Increasing transparency is a priority for Hungary in both stock and non-stock transactions. In this regard, Mr Matolcsy said that the Presidency strives to promote the achievement of the EU’s G20 commitments. He called it a happy coincidence that the G20 is this year presided by an EU Member State, France, which allows for close cooperation.
The role of bank taxes
In the field of taxation, the Presidency wants to reach an agreement on the Savings Tax Directive and supports the initiation of the negotiation on the review of the Energy Tax Directive, confirmed Mr Matolcsy, who received several questions from MEPs on the bank tax introduced in ten Member States. He admitted that introducing a bank tax is “a risky move”, because it can discourage banks from financing, so it should be accompanied by measures supporting small and medium sized enterprises. In the current situation, the bank tax is necessary for fixing budgets and restoring the balance, said Mr Matolcsy, but a harmonised EU bank tax should create reserves and prevent crises in the long run, rather than achieve consolidation.
The world will not wait
The Hungarian Minister said: “The world will not wait until we defeat our own crisis,” in acknowledgement of the importance of increasing investments and creating jobs in parallel with crisis management. At the same time, he pointed out that the ECOFIN is primarily focusing on setting the balance and strengthening economic coordination, while growth, employment and demography, the big issues are vital for the future, which falls inside the scope of other Council formations.
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