Reshaping Europe’s economy – MEPs and MPs debate key issues

EU2020 strategy, EU economic governance, and public finances were the key issues in the first day of debate between Economic and Monetary Affairs Committee MEPs and MPs from EU Member State parliaments on Tuesday. The event continues on Wednesday morning, with a half-day debate on the world's new financial architecture.

The EU's post-crisis economic strategy and plans to modernise financial architecture worldwide are being debated at a two-day meeting of MEPs and MPs from EU Member States in Brussels.

EU Council Presidency plans for finalising the EU2020 strategy and developing a new form of economic governance were presented by Spain's economy and finance minister Elena Salgado on Monday.  The Council should agree by the end of March on priorities for the new strategy and a general idea of the type of governance system needed, she said, adding that the Council must use Lisbon Treaty provisions to the full, drop some EU 2020 goals, and make the remaining ones made more comprehensible to the public.

 

The EU2020 strategy must built on growth and public finance consolidation, said Economic and Monetary Affairs Commissioner Olli Rehn, stressing that "this two-pillar structure is the basis of the Commission proposal". Mr Rehn also called for more co-ordination among EU Member States on fiscal matters and macro-economic imbalances, such as the lack of competitiveness, in parts of the EU.

 

European Central Bank senior economist Jürgen Stark offered MPs and MEPs a health check on the EU economy. Signs of stabilisation since Spring 2009 meant that the ECB's non-standard measures could be rolled back, although growth would remain unstable for a while yet, he said, adding that if left in place too long, "such measures could distort money markets, set wrong incentives and lead to price instability". Countering recent criticism of the Bank’s policy in times of crisis, Stark said that policies with a lax attitude to inflation would only distract attention from the fundamental goal of fiscal consolidation.

Jose-Maria Garcia-Margallo Y Marfil (EPP, ES), questioned whether recent statements by Spanish Prime-Minister Jose-Luis Zapatero on binding governance could be implemented since, he said, the EU treaties would not permit it.

 

Philippe Lamberts (Greens/EFA, BE), asked why fiscal consolidation plans appear to focus solely on cutting expenditure. "Should we not also see how to reform our taxation systems to raise revenue and ensure more equality?" he asked. "Sustainability is being melted down to a mere adjective in the discussion on EU2020. We have to focus much more on resource efficiency", said Sven Giegold (Greens/EFA, DE), who also contested suggestions by Olli Rehn and Jürgen Stark suggestions that the deficit countries must bear adaptation costs on their own.

Edward Scicluna (S&D, MT), observed that it would be hard to whip up enthusiasm for the EU2020 strategy  had  when all everyone is currently thinking of is debt. Olle Schmidt (ALDE, SE), by contrast, felt that the situation Europe finds itself in now is infinitely better than that at the end of the 1930s crisis. "We don’t need more pessimism", he said.

 

Miguel Portas (GUE/NGL, PT), criticized the stability and growth pact criteria as arbitrary. "Why should the deficit limit be 3% of GDP and not 6% and why should the government debt limit be 60% and not 90%?", he asked, adding that "the important thing is not quantitative limits but to co-ordinate debt well at the EU level", he said.

The event continues on Wednesday morning with a half-day debate on the new financial architecture. Speakers include Dominque Strauss-Khann, Mario Draghi and Michel Barnier.