Brussels, 26/10/2010 (Agence Europe) - United they stand, divided they fall. MEPs are planning to unite in force in their role as co-legislators in the process of enhancing the European economic governance system in the same way as they did over financial supervision. This was the main message emerging from the debate at the European Parliament's economic and monetary affairs committee on Tuesday 26 October. Corien Wortmann-Kool complained that reading the newspapers, one got the impression that everything has been settled by the taskforce and nobody takes any notice of the EP's position. The author of an own initiative report on economic governance adopted by the plenary last week (see EUROPE 10240), Diogo Feio (EPP, Portugal) said that by having a strong common position, the EP was able to be influential in the debate. Sylvie Goulard (ALDE, France) said that people had to be told that it wasn't only the taskforce of the president of the European Council, Herman Van Rompuy, or the Franco-German deal at Deauville that should determine the debate, but also the EP. Astrid Lulling (EPP, Luxembourg), however, said she didn't think there was an EP common position on the issue, as shown by contradictory comments last week in plenary about the Feio and Berès reports on how to respond to the economic crisis. She said that future discussions would force the EP to make difficult choices and say whether it was the Commission or the Council that should take “front row” in economic governance in the eurozone. She added that the EP should also say whether or not it agreed with automatic penalties.
Penalties. On the question of penalties on eurozone countries breaching the Stability and Growth Pact (SGP) rules, Wortmann-Kool said there was a danger of decisions being “over-politicised”, which was not what the EP wanted. She called for a very strong role for the European Commission. Goulard likes the idea of using reverse qualified majority voting whereby penalties would apply unless opposed by a qualified majority of member states. She wondered why penalties had been set at 0.2% of GDP. Philippe Lamberts (Greens, Belgium) said the penalties suggested by the Commission were “pro-cyclical” and wondered whether it was realistic to require a country whose public debt is 100% of GDP to cut the debt every year by 5%. He recommended carrots in the form of incentives as well as sticks.
Macroeconomic imbalances. Elisa Ferreira (S&D, Portugal) wants the criteria to be defined for analysing the completely new dimension to the SGP that is macroeconomic imbalances. Danuta Hübner (EPP, Poland) said that a distinction should not be made between internal and external imbalances. Sven Giegold (Greens, Germany) commented that it was counterproductive to ask countries to follow an austerity programme if the measures taken lead to deflation. Liem Hoang Ngoc (S&D, France) said the Commission's proposals for macroeconomic surveillance were “questionable” because they did not take account of imbalances between savings and investment or income gaps within a country. He warned against excessively tough measures like pay cuts, which would nip recovery in the bud. Nikolaos Chountis (GUE/NGL, Greece) said that nobody had been able to apply the SGP. He predicted that tighter budget discipline would lead to higher unemployment and social problems. (M.B./transl.fl)