Brussels, 20/01/2011 (Agence Europe) - MEPs on the European Parliament's economic and monetary affairs committee will be discussing for the first time on Monday 24 January the package of draft legislation on reform of economic governance in Europe. Echoing their approach for the financial supervision package, they have decided to work on all six items of legislation in parallel. The rapporteurs are members of the biggest political parties at the EP - the Greens/EFA is the only one not represented.
Firmly believing, as they put it, that democratisation of economic governance is a necessity, not a luxury, the MEPs want member states to take ownership of the stability and growth pact (SGP). All decisions at EU level should be made public. Member states would be forced to incorporate into national law the main SGP targets, such as respect for medium-term budget objectives. The German constitution restricts the federal deficit to 0.35% of GDP between now and 2016 and France is considering a similar measure. When developing their budgets, countries should explain how they play to take account of comments made during the “European semester”, which the MEPs want to make binding. They also want member states to justify differences between their own and the European Commission's economic forecasts.
As far as the MEPs are concerned, the Commission should play a central role in the new economic governance system. Throughout the procedures set out in the stability and growth pact, the Commission's proposals would be deemed passed unless there were a qualified majority on the Council of Ministers opposing them (the “reverse majority rule”). The issuing of sanctions on countries infringing the EU rules would be semi-automatic (an idea that the Council of Ministers refuses to accept). Sanctions should be gradual (depositing capital with and without interest and fines) and fines of between 0.1% and 0.5% of national GDP would be issued using the excess deficit procedure. The MEPs want a new fine to be added to penalise countries that falsify financial information.
Eurobonds. The MEPs are keen to be involved in the debate about eurobonds. They suggest that joint sovereign debt bonds should be issued by a European Monetary Fund and such bonds should account for less than 40% of the GDP of the countries in question. Only countries meeting the SGP's deficit and debt criteria would be involved. Eurobonds should be senior debt, argue the MEPs. (M.B./transl.fl)