Brussels, 19/02/2013 (Agence Europe) - The tenacity of the S&D, ALDE and Greens/EFA at the European Parliament may be about to pay off. Interinstitutional talks on the “two-pack” of legislation updating the Stability and Growth Pact may lead on Wednesday to a pledge by the European Commission to set up a group of experts that would have until March 2014 to examine the feasibility of partial pooling of eurozone countries' debt (see EUROPE 10765).
The talks on the content of the legislation have reached a conclusion, but there is still the demand of the three political parties for the Commission to make a political commitment to ensure progress on budget solidarity through the drawing up of tools for pooling some of the debt of eurozone nations.
The Commission has been procrastinating, saying that the establishment of a redemption fund to manage excess eurozone countries' debt for 20 to 25 years (excess meaning debt above 60% of GDP) or the common emission of eurobills would require changes to the EU treaty. Member states are divided over the matter. Backed by Austria and Finland, Germany does not want any kind of pooling, certainly ahead of the September elections in the country, whereas France says that budget consolidation must be accompanied by solidarity and is openly calling for debt pooling.
On Monday evening, an informal meeting is reported to have taken place between the head of the ALDE party, Guy Verhofstadt of Belgium, Euro Commissioner Olli Rehn and the Irish Presidency. With the support of the heads of the S&D and Greens/EFA parties, and even the head of the EPP, Verhofstadt reportedly convinced Rehn (a liberal ally) to make a statement to the effect that the Commission will set up a group of experts to carry out an in-depth analysis of the potential merits, risks, requirements and obstacles to a partial substitution of debt at national level by a redemption fund and the common emission of eurobills. The draft statement that this newsletter has received says that the group would be given the job of analysing the contours of said instruments in terms of legal provisions, financial architecture and the necessary budget and economic framework. The need to ensure sustainable public finances, avoiding moral hazard and being accountable to democratic bodies will also be taken into account. Once the experts have published their report in March 2014, the Commission will study it and then, if it feels it is appropriate, it will issue proposals before the end of its term of office.
The group of experts would be like the Larosière Group that initiated reform of the financial supervision system, explained a source at the European Parliament. Contacted by this newsletter, Élisa Ferreira (S&D, Portugal), rapporteur for such matters, was unavailable and hence unable to comment on the statement. (MB/transl.fl)