Brussels, 19/05/2014 (Agence Europe) - The image of the European Commission in Brussels calling the shots in the eurozone is false, says Sofia Fernandes of the “Notre Europe” foundation in a report entitled: “Qui mène le jeu au sein de l'eurozone? 'Bruxelles'? Ou les Etats membres?” (“Who calls the shots in the euro area? 'Brussels' or the Member states?”), published on Friday 16 May.
The report recognises that: “Acting in accordance with common rules is essential to ensure the proper functioning of a common monetary area in which there is only one monetary policy but eighteen different national economic and budgetary policies.” The analysis of the troika's work (where the Commission works with the European Central Bank and the International Monetary Fund) reveals that: “The European authorities' capability for intervening, which translates into the enforcement on member states of 'both obligation to achieve a result and of the means to achieve that result' is limited in terms of space, or geographic area,” although, as the Padoa-Schioppa group pointed out, sovereignty ends where solvency ends. The report stresses the importance of the strings attached to the financial aid plans - restoring a healthy economic and financial situation and avoiding the moral hazard of recipient member states being tempted to not make much effort and simply rely on their European partners. Given the quarterly assessment of their public finances and the option of freezing aid if prior actions are not accomplished, the recipient member states lose part of their budget sovereignty because of their inability to roll over their debt on the money markets at reasonable interest rates, explains Fernandes.
European Semester and budget surveillance. The report then looks at the European Semester. On 2 June, the European Commission will unveil its country-specific recommendations. The report notes that “the country-specific recommendations are not the Commission's recommendations but recommendations from the Council, which each country's finance minister and head of state or government have endorsed. On the other hand, what the European authorities address to member states are “recommendations”, not “demands.” Yet this new stage in fiscal surveillance does not give the Commission the option to veto a national budget, nor even to change a budgetary plan in any direct sense. And furthermore, the member state in question can opt not to subscribe to the Commission's opinion, the only penalty it can incur in doing so being that its non-compliance is considered an aggravating circumstance if it is then subjected to EDP and fails to meet the deadline set it to bring its public deficit back down to below the 3% of GDP mark. Sovereignty ends where solvency ends.”' The Commission does not have the power to reject national reforms plans. Last month, Germany's finance minister, Wolfgang Schaüble, called on the Commission to reject unsatisfactory member state reform plans (see EUROPE 11048).
On the basis of the above facts, the Notre Europe reports states “that 'Brussels' only has the powers and the areas of jurisdiction that the member states have assigned to it.” Fernandes explains: “What Europe and the euro area need today is not so much a set of new rules or procedures as the construction of the will to act together, of an awareness of our shared destiny.” (EL)