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We are now five years into the crisis with its economic imbalances, credit booms, real estate bubbles, and unsustainable public spending in most of The EU Member States. Some new tools have been developed for the eurozone to better coordinate economic policies and ensure preventive and corrective fiscal surveillance. The ECB has developed a new policy toolkit for containing financial fragmentation in the euro area. With the ESM, we have built a firewall to avoid sovereign financial distress spilling across borders. The external rebalancing in the euro area is underway. And growth is gradually coming back towards a positive path.
Looking ahead: A Blueprint for EMU
Challenges still remain for the future and this is why the Commission keeps feeding the debate on the deepening of the EMU. Legislative proposals for a Banking Union are currently being negotiated. We have also proposed to strengthen the ex-ante coordination of major economic reforms and that the long-term European perspective should comprise a fiscal stabilisation capacity and the common issuance of public debt.
Although, in the Blueprint, we give priority to measures that can be realised under the prevailing framework, the proposals I just mentioned will ultimately lead to Treaty changes.
Economic governance – Expectations of citizens
The instruments I have mentioned are important elements of post-crisis economic governance. Many people say that closer integration for the overall EU will emerge from our response to the crisis. But I would go further and say that closer integration is already happening: it is our response to the crisis. However, while crisis response has brought closer integration in institutions and procedures, it has not always fostered a sense of community among EU citizens. Nevertheless, citizens of the EU have high expectations of their policy makers. Most Europeans see a need for greater emphasis on social equality and solidarity, in order to face major global challenges. And the vast majority of citizens in most eurozone countries would like stronger co-ordination of economic and budgetary policies. I am sure this view is also shared by citizens of non-Euro Member States.
Economic governance – An approach for the Union
Beyond the issues strictly linked to the eurozone itself, there is a legitimate expectation from our citizens that the EU should contribute to a comprehensive growth and job strategy for all. The European reinforced economic agenda implies closer cooperation at EU level on agreed policy priorities and targets, together with country specific approaches based on macroeconomic imbalances and economic and fiscal policy surveillance. For this, we have the European Semester - a comprehensive tool to improve the consistency, focus and timeliness of economic policies. The European Semester has already shown its merits.
But I believe that we need stronger involvement of National Parliaments and the European Parliament in the European Semester and although some elements of the European semester are limited to the euro area, those outside the eurozone must not be marginalised or left behind. Nor should our Single Market be undermined.
Scope for European tax policy
Šemeta explained where he saw scope for moving forward with taxation policy in the context of the European Semester and even beyond: combatting tax evasion; and implementing fair tax systems.
Closer fiscal integration
A common European fiscal capacity, whatever its immediate purpose, will have to be supported by revenue. And when it comes to revenue, we must not forget the verdict “no taxation without representation”. There are many debates about various aspects of a European fiscal capacity on the functional side. I wish to see just as many debates and thoughtful contributions on how to strengthen European economic governance along the lines of democratic participation.
We need to be more creative in setting up similar formats and events, where we can learn from each other, learn about our citizens, and provide an open space for articulating preferences at European level. In essence, I am arguing for a genuine revenue capacity at European level.