Brussels, 02/02/2012 (Agence Europe) - In a resolution on the outcome of the 30 January European summit passed on Tuesday 2 February, MEPs call for the setting up of a new fund to help solve the sovereign debt crisis, based on an idea mooted by a group of German economic experts (see EUROPE 10544). The MEPs want the fund to be a temporary management system for over-indebted eurozone nations and for it to be included in new legislation to supplement the Stability and Growth Pact.
The independent group of German experts suggests setting up a redemption fund for the section of debt exceeding 60% of GDP of countries in the eurozone (see EUROPE 10528). The fund would buy up by this section of debt. Given the size the fund would have to be to buy up the debt in question, it would be able to finance itself at a lower cost than each of the participant countries individually. Member states would be expected to cut public spending and introduce structural reforms. This would be different from eurobonds because it would have an end-date and only last for 20-25 years.
The EP also calls for the introduction of compulsory lending for project funding, the drawing up of a roadmap for stability bonds and the levying of a tax on financial transactions at EU level.
Budget pact. The MEPs believe that virtually all areas of the new budget pact are do-able and indeed many have already been done within the existing set-up in the EU by means of derived law, apart from the -golden rule,- the reverse qualified majority vote system and the powers granted to the European Court of Justice.
The EP lists several improvements on the initial draft deal - the treaty will come into force by means of derived law; signatory countries not in the euro will be able to attend eurozone summit meetings dealing with competitiveness, the overall structure of the eurozone and key rules that will apply in the future, although the EP would have preferred them to have had exactly the same rights as full eurozone members; cooperation between the EP and national parliaments has been recognised; and it has been promised that the budget pact will be incorporated into the EU legal system within five years. (MB/transl.fl)