Brussels, 01/02/2012 (Agence Europe) - MEPs are critical of the handling of the sovereign debt crisis, with a plethora of criticism of the outcome of the European Summit on Monday that aimed to focus on growth and jobs, but whose main decision was the agreement by twenty-five member states on an intergovernmental budget pact (“fiscal compact”) to boost budget discipline (see EUROPE 10542).
The growth stimulus decisions were described by Joseph Daul (EPP, France) as paltry. He explained that growth should not be stimulated artificially by an increase in spending, but should instead consist in making the European economy more competitive, which can be done by completing the internal market - the legislation has been passed but not yet applied. Daul, who heads the EPP party at the EP, said that everyone in Europe needs to know which countries are not pulling their weight when it comes to the internal market. He approved of the plan to make better use of existing EU funding to help people find work. The leader of the Social Democrats, Austria's Hannes Swoboda, said that the decisions about growth were no use for Portugal. He called for cash to be raised using the financial transactions tax (FTT) and for it to be fed into the real economy. He said that while it was true that Europe's leaders were starting to think about youth unemployment, why did they punish countries that break the public deficit rules, but simply issue statements if the same countries fail to meet their employment targets? Yet another summit ending in fine words and good intentions when what Europe needs is action, lamented the leader of the Liberal group at the EP, Belgium's Guy Verhofstadt. He suggested three measures that can be taken right now to boost growth - having the headquarters of the central EU patent dispute in Brussels for the meantime to settle disputes about the EU patent (leaving the final decision about the headquarters until later); - getting the “project bonds” started to help fund big infrastructure projects; and - changing the EU structural fund co-funding rules. On behalf of the ECR party, British Conservative Martin Callanan said that DG Employment at the European Commission should be scrapped because all labour law must be abolished if jobs are to be created, as Eurocrats were singularly unable to create jobs. Lothar Bisky (GUE/NGL, Germany) called for a European Sustainable Growth Pact covering public investment in education, training and sustainable infrastructures.
Budget pact. The Left-Right split immediately came to the fore whenever the budget pact was mentioned. Wanting national budget deficits to be reduced (adding that they often hide regional deficits), Daul hoped the new treaty would be signed, ratified and incorporated in the EU treaties as soon as possible. He said the member states that preferred to go it alone (the United Kingdom and the Czech Republic) would end up regretting their decision. Budget discipline is needed, said Verhofstadt, but how can Italy get out of a rut if the interest rates on its long term debt are as high as 6%? No more half-hearted measures, he said, calling on the eurozone to make a great leap forward, for example by pooling some of the eurozone nations' debt.
Hannes Swoboda criticised Germany's attitude of calling for outside intervention in Greece on the technical front because it has failed to meet its budget and macroeconomic targets. He said Merkel had to understand that the EU's leading country must do all it can to bring Europe together rather than split it asunder. He predicted that the new budget pact would not be applied because the next French president, François Hollande, has said he wants it renegotiated. On behalf of the Greens/EFA, Germany's Rebecca Harms said she was ashamed at the outcome, adding that Greece needed a genuine anti-recession programme to get companies to invest in the country and alleviate Greek demoralisation, but instead of that, the country was to be given a “super EU commissioner” with his or her own budget, and people were talking about yet more spending cuts, which only makes the crisis worse in struggling countries. Harms said that going by what is happening in Portugal, there is a genuine danger of the crisis spreading. Slamming financial speculation for undermining countries' room for manœuvre, Bisky criticised the unilateral austerity approach that even the IMF is unhappy about. He pointed out that the budget pact is undemocratic because it does not allow ordinary people to express their views on it.
Eurosceptics had plenty to say. Callanan said he did not disagree in principle with budget discipline, but said it would make it impossible for struggling countries to see the end of the tunnel and leave the euro. Nigel Farage (EFD, UK) criticised the budget pact for humiliating member states that do not keep up with the Germanic view of the economy, saying that young people were suffering from being in the eurozone while Van Rompuy and his colleagues were wittering on about growth, he said, saying to Durão Barroso that everyone knows that Portugal's next. Andrew Henry William Brons (NI, UK) said he was sure that at the end of the day, the EU budget rules would be used to reduce people to slavery. (MB/transl.fl)