Brussels, 19/01/2011 (Agence Europe) - The leader of the ALDE Group at the European Parliament, Belgium's Guy Verhofstadt, has published economic governance proposals on the fringes of the EP plenary in Strasbourg, which go beyond the ideas set out in the draft legislation that will be discussed at the economic and monetary affairs committee on Monday 24 January 2011 (see EUROPE 10225).
Throughout the procedures set out in the stability and growth pact, reverse majority voting should become the rule, according to the Liberals. Suggestions from the European Commission on the introduction of penalties against a country in the eurozone would in this way be considered passed unless a majority of member states oppose them. The Commission and the ECB back this idea, but not the member states which, in the report by the taskforce on economic governance (see EUROPE 10247), want politicians to have room for manoeuvre on any decision that would lead to penalties.
The Liberals want the annual rate of public debt reduction to be increased to 1% of member states' GDP, but the Commission only recommends a reduction of over 0.5% of GDP. The structural reforms undertaken under the EUROPE 2020 strategy should be binding and go as far as penalties, according to the Liberals. The austerity policies are described by them as necessary but not going far enough, and the Liberals call for them to be accompanied by investment in growth areas like the creation of European project bonds to fund big infrastructure projects under the aegis of the EIB.
European project bonds. The Liberals recommend the issuing of eurobonds that eurozone countries would finance in line with their own debt's credit rating. AAA-rated countries would pay more than at present, and countries with lower ratings would have a lower interest rate than at present. The joint issuing of bonds would only cover the section of the debt of up to 60% of GDP of each member state. (M.B./transl.fl)