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VP Rehn opened the conference by saying that: “When we met here last year, there were serious concerns that the euro could disintegrate. A tail risk, perhaps, but certainly something that was in many people's minds, or at least in the minds of the market forces. One year later, that tail risk has disappeared.” Rehn warned however that Europe was only gradually emerging from the crisis, and that “our patient will need surveillance and medication still for some time to come".
His guest, World Trade Organisation Director General Pascal Lamy, gave the 3rd Annual Tommaso Padoa-Schioppa Lecture in which Lamy examined what European citizens would be most concerned about in the coming year leading to the European elections. "Further European integration is it still the way forward”, Lamy underlined. But, the existential question that all Europeans will confront at the next European elections in 2014 and that political groups must answer is what is the future of the integration project?
In his key note speech, Irish Prime Minister Enda Kenny delineated the four key objectives on which the EU needs urgent progress, ranging from preserving financial stability and completing the banking union, to getting 'our young people back to work or into education'. "The important steps taken by the ECB under President (Mario) Draghi and the commitments made at the European Council last June mean a period of relative calm continues. We are very clear on the need to break the link between banking and sovereign debt. Achieving such clarity was critical to our managing the economic crisis. Now we must deliver, in real practical terms. Banking union is absolutely crucial. For leaders, it’s a credibility test we cannot afford to fail. Following through on decisions is the very least our citizens expect and demand”, Kenny said.
The three sessions that followed covered international competitiveness and picked up the topics of banking union and fiscal and economic union, allowing for fruitful debates exploring ramifications of the last few years of economic crisis and the way forward towards a more robust EMU.
The euro crisis may be abating, but with the European Union still mired in recession, how can its economies recover and compete? At the panel on securing the European competitiveness in a global perspective, a variety of ideas were offered to boost competitiveness, from cutting red tape to taxing better. Further capitalising on the Single Market, in particular as regards services and network industries, openness and innovation, with investment in R&D and in education and skill formation, were identified in Session 1 as major building blocks of a high-productivity strategy for European competitiveness.
An effective banking union is essential for the European Union if future euro crises are to be avoided, panellists at the Forum agreed in Session 2. But what will the components of this banking union be, and how will it address banking sector risks? The EU started work to establish a banking union last year in an attempt to break the ‘vicious circle' between banks and state finances and to avoid the burden of supporting banks falling on taxpayers.
The Brussels Economic Forum came to a close by a multi-faceted debate on the path leading to fiscal union, but also what is crucial for enhanced economic union, launched by MEP Sharon Bowles' statements and well-rounded views. The Member of the European Parliament and Chair of the Committee on Economic and Monetary Affairs talked about looking realistically at the monetary union: “The starting point ... is that the monetary union was incomplete, and we have or are in the process of achieving better discipline now over budgets, this is harder to do when times are difficult, but then again may not have been done if these were not difficult times”, Bowles said.
What would however help bring a further economic or fiscal union is democratic accountability, this is still lacking as the institutions are “historically lacking of democracy; full of good intent but ties of trust are being broken”, Bowles underlined.
Further reporting © Wall Street Journal: "ECB-Liikanen: Resolution Authority Needs Clear, Narrow Mandate"