Brussels, 27/09/2011 (Agence Europe) - Just prior to the debate on the state of the Union, the leader of the Alliance of Liberals and Democrats for Europe (ALDE) in the European Parliament, Guy Verhofstadt, has written to Commission President José Manuel Barroso, calling on him to save the Union by developing “an exit strategy” from the crisis.
The member states have relied on the European Council for solutions. “However, the European Council is ill suited for such a role”, Vehofstadt says in his letter. He goes on to argue that “the European Council is at best able to take temporary solutions but incapable of providing a comprehensive plan and vision for the future”. He notes that it was the Parliament which had insisted that both the recent economic governance package and the financial supervisory package be significantly strengthened. “But this is not enough.” He says that, in his view, the European Commission should present a new, detailed and comprehensive approach for overcoming the current crisis based on a number of points. Firstly, current arrangements for crisis management (the EFSF and the ESM of the future) are cumbersome. A European Monetary Fund operating under Community rules accountable to the European Parliament and deciding by majority voting should be established. The euro can no longer be the hostage of a fringe eurosceptic fraction in a single eurozone member state. “The use of unanimity will kill the system.” Secondly, what the eurozone needs is “real economic government” that handles economic and fiscal policies at the Union level. A senior member of the Commission should be appointed as European finance minister (a move that presupposes reorganisation of the Commission). This European finance minister would be tasked with defining the main thrust of economic policy of the eurozone and, in this capacity, chair the Eurogroup. “We might also examine whether the functions of the presidents of the European Council and Commission could be merged to strengthen coherence.” Thirdly, it is necessary and urgent to recapitalise the European banking sector, and this, of course, must be done in a transparent way. Fourthly, the Union should establish a system of common issuance of bonds that mutualise in a progressive and partial way eurozone debt up to a maximum of 60% of GDP with differentiated interest rates within this range. The system should ensure greater discipline but also provide enhanced solidarity. Fifthly, a Pact for Economic Convergence, Jobs and Growth is needed. This Pact should be based on an obligatory convergence code with minimum and maximum levels to be applied to the main pillars of the member states' economies but providing flexibility on how these should be applied. “The necessary austerity needs to be accompanied by a qualitative and quantitative growth programme.” The proposed Pact would be driven by the Commission which would monitor and enforce implementation. In parallel, a growth strategy financed through EU project bonds and the smart use of money allocated in structural and cohesion funds and also unused payments should be set out. Sixthly, there should be single representation for the euro area in international financial institutions, with the aim of establishing the euro as a global reserve currency in the medium and long term. Finally, the accountability and democratic legitimacy of the Union must be guaranteed. “It is essential that all actions of the Union are subject to effective democratic control by the European and national parliaments.”
Verhofstadt urges Barroso and the Commission to “use your power of initiative to propose a package to achieve the transformation of governance in the eurozone that is so clearly needed”. A clear roadmap containing the seven points above should be presented no later than the next European Council in mid-October, the ALDE Group says. “We cannot wait any longer if we want the euro and the Union to survive”, Verhofstadt states in conclusion.
For the Greens, economic governance should be led by Barroso. The Greens/EFA Group noted that it did not support Barroso's appointment. Daniel Cohn-Bendit said, however, that Barroso had to resist the creation of new institutions. “Mr Barroso will have to fight, and the EP will be with him in this, to make sure that economic governance is supervised by the Commission. The Commission should not agree to having (European Council President) Herman Van Rompuy, a puppet of governments, by its side”, Cohn-Bendit said.
Martin Schulz, leader of the S&D Group, said that the crisis in Europe was a crisis in member states. He expressed his concern over the swift renationalisation of European-level decision making, “at the expense of the Commission”. He said that, first and foremost, there had to be discussion of Van Rompuy's role. “The 17 heads of state or government of the eurozone set themselves up as the economic government. But that is not contained in the treaties. And where is it written that Mr Van Rompuy should be the president of the economic government? To whom will Mr Van Rompuy be answerable for executive action he takes which is not to be found in the treaty,” railed Schulz. (LC/transl.rt)