Brussels, 13/03/2013 (Agence Europe) - The heads of state and government of the EU are start their meeting on Thursday to set the directions of the economic policy to be taken in Europe. This is a subject that they will also address at the eurozone summit which, despite the official rebuttals, could also deal with the issue of the financial bailout of Cyprus and the political uncertainty in Italy. On Friday, the EU27 will hold a strategic discussion on their partnership with Russia.
After the crisis summits which took place over 2011 and 2012, the European leaders hope that it is now time for a return to normal. Indeed, this European Council is “more predictable” than the earlier sessions, says a European source. It will focus on the economic situation in the EU, marked by a recession in 2012 which could continue into 2013 (see EUROPE 10792).
Aware of the “frustration” among European citizens with regard to policies which - especially in the South - attack their standard of living, the European Council does not, however, want to launch into a debate on the impact on growth of the budgetary consolidation that is taking place in the whole of Europe. It would prefer to provide “pragmatic solutions” to current problems, the source believes. In the opinion of this source, opposing austerity and growth is “too simplistic” because “if a choice exists” no leader would choose in favour of austerity.
The Irish minister for European affairs, Lucinda Creighton, acknowledged at the European Parliament on Wednesday 13 March that in Ireland the effects of the crisis were “real and sometimes difficult”. Yet, in her opinion, the return to growth has to go via the route of consolidation of public finances. Believing that the EU has not done enough to boost the real economy, European Commission President José Manuel Barroso described as “unacceptable” the figures for unemployment, and he spoke of the work undertaken to fight against youth unemployment (see other article and EUROPE 10803). Stephen Hughes (S&D, United Kingdom) criticised the stubbornness of the Commission in favour of budgetary consolidation - the economic forecast of which is continually reviewed downwards. In the same vein, Guy Verhofstadt (ALDE, Belgium) noted that seven countries are in recession, nine in stagnation, eight have an unemployment level above 10%, and that the excessive deficits and debt affect all countries except Luxembourg and Estonia. The result is that the extreme right is on the rise and Italy is without a government. “Being frog-marched into budgetary consolidation is suffocating the economy. The further we go in this direction, the more poor people there are!”, deplored Daniel Cohn-Bendit (Greens/EFA, Germany), who supports a slowdown in the pace of the consolidation.
The EU27 will confirm the approaches suggested by the Commission in its Annual Growth Survey as a kick off to the budgetary process of the European semester. It should pursue a differentiated budgetary consolidation, restore the financing flows of the economy, promote growth and competitiveness, address the social consequences of the crisis, and modernise the public administration (see EUROPE 10740).
It will not be decided on Thursday to grant more time to the countries in difficulty in order to respect their budgetary commitments even if the amended Stability Pact must be applied “intelligently”, according to the source. In June, the European Council will adopt specific country by country recommendations on the basis of the Commission's appreciation of the national stability and reform programmes.
The EU27 will demand rapid progress on several European fronts. “We must not relax our efforts and must implement what has been decided”, Creighton said. All the measures will be listed which will enable the single market to be completed and tax evasion to be fought more effectively (see EUROPE 10801). Banking union will have to be continued with a rapid agreement on the European supervisor and a proposal, in the summer, setting up a European bank restructuring authority.
EMU. Over dinner, President of the European Council Herman Van Rompuy will inform his counterparts of the ongoing work on strengthening EMU, including its social section, on the basis of the conclusions of the December summit (see EUROPE 10752). The objective is the adoption in June of a detailed roadmap. By contrast, the European Council will have to take note of the rejection by the European Parliament on Wednesday of the agreement on the 2014-2020 multiannual financial framework (see other article). “More than ever, Europe needs more Europe”, said Joseph Daul (EPP, France), who supports “more fiscal and social harmonisation”.
Cyprus. On Thursday evening, a eurozone summit will be held in the presence of the president of the Eurogroup, Jeroen Dijsselbloem. Officially, the 17 are likely to adopt their internal regulation “without changing the Treaty”. “The goal is not at all to start discussions on the Cypriot programme. We don't have all the elements on the discussions which are still ongoing. This is a subject for the ministers”, said the source, noting the calling of a Eurogroup meeting on Friday at 5.00pm. Verhofstadt has asked for the summit to speak about the situation in Hungary (see EUROPE 10804). (MB/transl.fl)