Brussels, 30/08/2011 (Agence Europe) - The three EU institutions negotiating the changes to the Stability and Growth Pact (SGP) are doing their utmost to conclude the negotiations as speedily as possible, hopefully by the end of September. The crisis has reminded people just how connected economies are these days, and this is why speedy agreement between the EU Council of Ministers and the European Parliament is so essential, explained President of the European Commission José Manuel Durão Barroso on Tuesday 30 August after a meeting with Polish Prime Minister Donald Tusk. Welcoming Tusk's plan to press ahead with the talks at full steam, Barroso said the Commission had suggested compromises in July and August over the final outstanding issue, namely the introduction of more automatic penalties and decisions in the preventative arm of the SGP, a measure demanded by the EP but rejected by the member states (see EUROPE 10437).
Tusk said he hoped the talks on the six pack of legislative items could be concluded next month. On Monday, during a debate at the EP's economic and monetary affairs committee (see EUROPE 10440), Polish Finance Minister Jacek Rostowski said that reform of the SGP was a test of Europe's capacity to deal with the economic crisis and warned that if it proved impossible to agree on reform of the SGP, then this would be proof that the Community method has not been able to come up with solutions.
Economic governance. Economic and Financial Affairs Commissioner Olli Rehn, also highlighting the urgent need for agreement on the legislative package, argued at the meeting in the European Parliament for greater institutional clarity on governance of the euro area. “We need to reflect on how to improve the division of labour and respective responsibilities” of the eurozone summits and the Eurogroup, he said. European Council President Herman Van Rompuy will bring forward proposals on crisis management in the euro area before the end of October. According to Eurogroup President Jean-Claude Juncker, the Franco-German idea of twice-yearly eurozone summits is not enough to deliver the necessary response to the recurrence of financial turmoil. In mid-August, Germany and France proposed, too, that Van Rompuy become the fist president of the eurozone (see EUROPE 10436). Barroso will, at the start of September, set out the Commission's ideas for the EP on how to further strengthen economic governance. As for eurobonds, Rehn said that, in whatever form they were to be introduced, they would have to be accompanied by “a substantially reinforced fiscal surveillance and policy coordination”. The Commission will bring forward a feasibility study on eurobonds before the end of the year, once reform of the stability pact has been completed. (M.B./transl.fl.rt)