Brussels, 14/09/2011 (Agence Europe) - On Wednesday 28 September, the European Parliament gave the go-ahead to the agreement reached between EP representatives and the Polish Presidency on changes to the Stability and Growth Pact. The new rules will increase budget discipline by setting deadlines for the reduction of debt, but will not alter the Maastricht criteria - keeping deficits below 3% of GDP and debt at below 60% of GDP. The new rules introduce macroeconomic surveillance of both deficit-ridden countries and those in surplus. Fines may be levied earlier in the proceedings and with less room for manoeuvre on eurozone countries breaking the rules. Like in the vote at the EP's economic and monetary affairs committee, the European Left rejected the changes because they focus on austerity rather than growth. The ECOFIN Council will formally conclude the legislative process on Tuesday 4 October.
The EPP welcomes the changes to the SGP. “Financial markets need a predictable, strong and transparent European economic governance. The six legislative proposals provide for this”, said Corien Wortmann-Kool of the Netherlands. Portugal's Diogo Feio said the changes to the SGP would help prevent future crises and strike a balance between public finance stability and economic growth. The chair of the Liberals, Belgium's Guy Verhofstadt, said that it was totally down to the Liberals that the changes had been voted through because they had demanded clear rules and greater discipline, with automatic penalties. French Liberal Sylvie Goulard suggested the setting up of “economic dialogue” whereby finance ministers would attend hearings at the European Parliament to explain their country's policies.
Anger on the Left. German Social-Democrat Udo Bullmann said the Left had rejected the agreement because they believe there's another way of getting out of the crisis, and the changes resulted in an Austerity Pact of cuts and penalties that leaves countries no room for manoeuvre to make smart spending and key investment. He called for a different strategy, combining both a correction in public finance, social justice, proactive job-creation policies, eurobonds and a true European budget. These sentiments were echoed by the Greens. Belgium's Philippe Lamberts said the legislation that had been voted through was a pro-cyclical, self-destructive cocktail that would increase poverty and destroy popular support for the European project, but he admitted that some progress had been made, like the introduction of macroeconomic surveillance. He added that the fact that both excess surpluses and excess deficits would be examined was clearly a major improvement.
EU Economic and Monetary Affairs Commissioner Olli Rehn said that the EP vote marked a sea-change in the management of monetary union as the new rules would ensure budget discipline and facilitate economic stability, both of which are key to sustainable growth and job-creation. The spokesperson said the Commission would be unveiling eurobond options later this year. (MB/transl.fl)