Brussels, 13/06/2012 (Agence Europe) - The president of the European Commission, José Manuel Durão Barroso, speaking in a debate in plenary at the European Parliament on Wednesday 13 June, called for an inter-institutional agreement on growth at the upcoming European summit. The Commission and most of the EP want a stronger economic and monetary union (EMU), along with a banking union. They also want a serious EU budget for 2014-2020 to meet the needs of Europe's social and economic priority policies.
In order to lay down priorities and introduce a timeline, Barroso suggested an inter-institutional agreement on the future European growth stimulus. He said this would give greater democratic legitimacy, but the idea was criticised by the head of the S&D Group, Hannes Swoboda, who said that one could just imagine telling someone on the dole that never mind, at least there's an inter-institutional agreement on a growth agenda for Europe!
Barroso listed initiatives that should be included in the growth agenda, namely the Commission's budget and macroeconomic recommendations, increasing the EIB's capital, introducing project bonds to finance big infrastructure projects, making better use of the Structural Funds and introducing new proposals in October this year for the single market. The Danish European affairs minister, Nicolai Wammen, added extra items to this list, like reducing mobile phone roaming charges, the energy efficiency directive (on which a key inter-institutional meeting will be held on Wednesday) and trade deals that could lead to the creation of two million jobs.
Budget and banking union. Wondering whether all the member states had understood the urgency of the matter, Barroso said that EMU should be expanded to cover a budget and banking union in the eurozone, which would demonstrate the irreversible nature of EMU and might require a change to the EU treaties. If the European summit decides on this at the end of the month, then Barroso said he would be ready to unveil draft legislation in October this year on EU supervision of banks in Europe and an EU savings guarantee system. Budget union would require the introduction of new rules to flesh out the Stability and Growth Pact (see separate article), greater powers for the European bailout funds, partial pooling of eurozone sovereign debt and greater fiscal coordination. Barroso raised the question of the democratic legitimacy of this, calling for it to centre around the Community method, but not changing the current institutional set-up. To reassure London, he said that greater eurozone integration would not damage the internal market.
The head of the EPP Group at the EP, Joseph Daul of France, asked whether people were ready to make the next political leap forwards to get monetary union up and running, saying that Europe was the solution rather than the problem. Swoboda, the head of the S&D Group, said that the European summit took too long to do anything, because the EP came up with the idea of a banking union a full two years ago and it was time to get the EU engine ticking over, he told Merkel. The head of the ALDE Group, Guy Verhofstadt of Belgium, said that the €100bn granted to bail out Spanish banks had done nothing to reduce the interest rates demanded on Spanish debt and warned that Italy would be next in the hot seat. He told Barroso to unveil legislation to set up a redemption fund to temporarily pool excess eurozone debt. Martin Callanan (ECR, UK) said the Spanish aid was like dipping one's trousers in hot water at the North Pole, which works a bit at the beginning but doesn't amount to much at the end of the day. British Eurosceptic Nigel Farage said the EU had clearly failed and the European Titanic had just hit an iceberg without enough life jackets.
EU budget for 2014-2020. Backed by the Commission, MEPs warned the European summit against cutting the EU's budget for after 2014. Swoboda said it was ridiculous to cut the European budget because the upcoming multiannual financial framework was a major part of the growth agenda and warned that there could be no budget without the EP's agreement. Verhofstadt criticised the silence of the Council of Ministers and European Commission on the question of own resources. Own resources in the form of a carbon tax, a tax on financial transactions and a tax on mobile phones could provide the foundation for Europe's budget sovereignty, said co-leader of the Greens/EFA, Daniel Cohn-Bendit, arguing that the EP could agree that individual countries would not have to pay any more towards Europe, in which case own resources are the way to counterbalance the lack of national investment. He warned the member states not to imagine that the EP was going to take this lying down - music to the ears of EU Budget Commissioner Janusz Lewandowski, whose birthday it was on the day of the debate (Wednesday).
On behalf of the Danish Presidency of the Council of the EU, Wammen said that the multiannual financial framework negotiating box covered the structure of the budget, rather than the actual amounts (see EUROPE 10631) and the European summit at the end of the month is therefore not expected to go into detail.
Barroso explained: “In many of our member states, EU funds are the biggest and most stable source of public investments. Since 2009, Cohesion policy, just as an example, has been equivalent to 97% of total public investment in Hungary, 78% in Lithuania, and over 50% in Poland. A cut of the Commission's proposal by 'at least €100 billion' over the seven year period, as some member states propose, would have an effect of 0.084% of the EU GDP on public finances and deficits. This is an amount that certainly does not make or break sound public finances in Europe!” (MB/transl.fl)