Pervenche Berès, is a member of the Socialist Group and rapporteur for the European Parliament on the financial crisis. For those who know her, it is not surprising that her draft report is not just restricted to examining the situation but also includes innovative, and often courageous, suggestions for managing the financial community and European economic governance. Guy Verhofstadt, the president of the Liberal Group at the EP, is leading the troops towards making a push forward in European construction, in a federalist and supranational direction. It is quite likely that he will not appreciate very much the current tone of this column, which highlights and recognises the progress made by Europe, whilst he considers this progress as being half-hearted and insufficient. Both Ms Berès and Mr Verhofstadt, in their individual ways, currently represent an essential trend in European construction, which warrants some explanation.
Four suggestions from Ms Berès. There is a risk that some of the ideas contained in the draft report by Ms Berès will disappear because 1625 amendments have been presented! - with the result that the committee vote has been postponed until September and the plenary vote until October. This is why it is necessary to discuss the orientations now, whilst waiting to see what will actually be retained. The rapporteur outlined them a few days ago in Paris at the appropriate committee at the French Parliament. The four most important orientations are as follows: a) to create a Mr Euro, who will merge the three functions of the European commissioner for the economy/finance, the president of the Eurogroup and the president of the Ecofin Council; b) to consider the revenue raised by the tax planned for financial transactions as an own resource of the EU; c) to involve member state parliaments in Community work, so that they are duly aware of the European dimension when they vote on the national budgets; d) to reject, in the context of sanctions against member states infringing the Stability Pact, the possibility of removing voting rights (this would go down very badly with the public) and rather, retain the obligation of increasing VAT or other taxes to cover excessive deficits. In October, we will find out the result of the EP plenary vote on these innovations.
The Verhofstadt project. The positions taken by Guy Verhofstadt emphasise the institutional aspects. In an interview he declared that “heads of state and government are still in a pre-crisis mindset. They think that with a little intergovernmental cooperation they will be able to solve the problems. The situation, however, requires a push forward in European integration (…) European supervision of financial activity? The Council came up with a kind of coordination between the national bodies. What didn't work during the crisis, we've decided to keep! The same goes for hedge funds and the same thing for economic governance”. In his opinion, the financial markets are waiting: “For months now they have been testing the EU's ability to make a leap forward in the creation of a European economic pillar. The markets will not tolerate any half-hearted cooperation between states”. The situation requires that a leap forward be made: “This is the right moment. A leap forward cannot be made when one's back is against the wall; it's like that in politics. The Lisbon strategy was the intergovernmental method: States were going to control each other mutually. It did not work in the Stability Pact. If a small country does not respect this pact it's a Greek tragedy, but if a big country is at fault, the pact is adapted! We saw this with Germany and France in the past. We have to avoid making the same mistakes”. He did recognise that there had been some progress: “At the beginning of the Greek crisis, the line taken by Angela Merkel was negative, deplorable. We lost time. She did, however, change tack. I believe that the Germans will, bit by bit, understand that more Europe is in Germany's interest. Germany has nothing to win in a Europe that does not work or a Europe where certain states achieve bad export results”. Mr Verhofstadt has confidence in the European Parliament, which, in his opinion, is becoming more in favour of substantial progress being made in this connection.
Let's not rule out a two-speed Europe. We will soon see what line the Parliament takes. It should not be forgotten that Mr Verhofstadt has always taken into consideration the possibility that a great leap forward in favour of a federal Europe will not be accepted by all member states. In the event that this transpires, he believes that they should not rule out a two-speed Europe (with a less explicit terminology, such as Jacques Delors' differentiation). This would not be anything new because it was in this way that the eurozone and the Schengen area were able to come into being - two essential elements of progress in European construction over the last two decades.
Tomorrow, this column will conclude a brief exploration of ongoing developments in the economic and financial domain, and will allow the president of the Council and other figures to have their say. (F.R./transl.fl)