The “economy” leg of EMU is no longer paralysed. The economic dimension of the economic and monetary union (EMU) has been sorely lacking. Jacques Delors denounced this shortcoming from the very beginning but despite certain political forces and pundits failing to take account of it or recognise it, it is, nonetheless, being born under our very eyes. The fierce ongoing debate on the common economic guidelines for the eurozone is indeed an attempt to put this aspect of EMU into practice. It is quite normal that a variety of different opinions exists but the objective is clearly that of developing common rules. This is indeed a decisive watershed for EMU. The era in which one did not even dare to speak of the issue is long gone; and the image (once again created by Mr Delors) of a lame EMU, with one good monetary leg on which to walk and the other economic leg, paralysed, was considered to be not only pertinent but also incurable.
Everything has changed. The monetary leg has been further strengthened with safeguard mechanisms that only two years ago would have been thought unthinkable, given that the idea of financial solidarity between eurozone countries was initially ruled out. The economic leg is beginning to move and lively discussions on this issue take place on a daily basis. Nonetheless, any open talk about this being part of evolution towards genuine European level economic governance, appears to be taboo. Divergences are highlighted (which are inevitable and I would even say logical, given the diversity of political orientations and especially of the different situations in member states). The turning point, however, consists of the fact that it can now negotiate these subjects itself, but this is never underlined. I repeat - EMU, with both its legs, is now being born. Different protagonists are aware of this, as proved by the example of the Economy/Finance Council's press release, to which I will be returning.
German orientations. The spotlight is currently focusing on Germany and Greece. Ms Merkel used the occasion of the report from the Five Wise Men to provide an early introduction of the orientations her government would be adopting to tackle demographic challenges. A few examples - a gradual increase in the retirement age for those born in 1977 or afterwards, which has been set at 67 years as from 2009 and from 69 before 2060; an increase in the number of immigrants to 350,000 a year but particularly for the highly skilled; more work for women through reforms incorporating greater childcare facilities. Ms Merkel accompanied these announcements with information regarding the pension systems and paid holidays in countries that do not respect the rules of the euro but which receive aid for tackling their budgetary deficits - earlier pensions, more holidays…
Thomas Händel, MEP from the Left group, responded by accusing the German Chancellor of ignorance and being anti-social. He said that she had provided incorrect and false figures and that her desire to string up a line of member states on the lowest social level possible was unacceptable. Greece must increase the taxes of the most well off and put an end to speculation and Germany must, in particular, put a stop to its arms trafficking to Greece. The political row is now out in the open and it focuses on economic policy.
Innovation advocated. The report by Sylvie Goulard, from the Liberal group, was even more explicit. It aims to introduce common economic standards. I'm not yet totally familiar with this text but she has already provided indications of one innovative or, one might say, revolutionary aspect of it. Why does the economic monitoring of member states' budgetary behaviour only deal with the deficits? In her opinion, it should also define the maximum level of trade surpluses. This would obviously target Germany, which has been criticised for damaging eurozone balance through excessive exports in comparison to its level of imports. I doubt that this is a good idea because it would be strange to punish a country that is exporting too much. The Germans are also currently in the middle of relaunching consumption levels, which will subsequently mean increasing their imports. The essential element of the Goulard report would, nevertheless, be to reintroduce economic dialogue that went beyond the current European semester (which involves the exchange of information on the budget drafts of each eurozone country and an assessment by the Commission, but without any real coordination between the national budgets).
I do not intend to discuss all the different ideas and projects today but to highlight the putting into practice of the ongoing economic dimension of EMU, underlining that this involves a revolution of sorts. For a Europe that is supposedly permanently in crisis and almost moribund, this is already quite an achievement.
(F.R./transl.fl)