Brussels, 16/07/2014 (Agence Europe) - The next president of the European Commission, Jean-Claude Juncker, a Christian Democrat from Luxembourg, is promising to introduce legislative and non-legislative measures to boost economic and monetary union during his first year in office.
In a programming document unveiled by Juncker, whose appointment as the new president of the European Commission was approved by the European Parliament on Tuesday 15 July (see EUROPE 11122), he says that the stability and growth pact (SGP) must be respected while making the most of the flexibility introduced into the existing rules in the 2005 and 2011 reforms. He said he would be publishing practical guidelines on this. The first new measures he is planning will emerge from the review in December of the two- and six-pack of changes to the SGP that strengthened budget and macroeconomic supervision. He said further proposals would encourage structural reforms through additional financial incentives, where necessary, and targeted budget capability at eurozone level. He suggested that representation of the euro in the rest of the world would be strengthened.
Troika. Juncker is calling for the troika of lenders (European Commission European Central Bank and International Monetary Fund), the informal body monitoring the financial bailouts of struggling eurozone countries, to be replaced by a body with greater democratic legitimacy that is more accountable for its actions, based mainly on the European institutions with greater parliamentary scrutiny at both European and national levels. In the future, a social impact assessment would be carried out for any new bailout.
In the financial field, Juncker will keep a close eye on implementation of the supervision and resolution arms of banking union. In the longer-term, as a way of encouraging players other than banks to finance the real economy and thus reduce reliance on the banks, he will unveil plans for a “union of money markets”. He promises to intensify the drive to harmonise the corporate tax base and clamp down on tax evasion.
New investment to the tune of €300 billion. The next Commission president says that sustainable growth cannot be built on mountains of ever increasing debt, but better use could be made of the common EU budget and the European Investment Bank to encourage private investment. He said it should be possible to mobilise up to €300 billion of new public and private investment in the real economy over the next few months. He said the investment could finance high-speed networks, energy grids, transport infrastructure, education, research and innovation, renewable energy and energy efficiency. The mid-term review of the multi-annual financial framework at the end of 2016 will provide an opportunity to re-direct the EU budget towards growth and competitiveness.
In this new “push for jobs” that he's hoping for, Juncker says: “A significant amount should be channelled towards projects that can help get the younger generation back to work in decent jobs, further complementing the efforts already started with the Youth Guarantee Scheme, the implementation of which must be accelerated and progressively broadened”. It seems still too early to agree on where the funding for the jobs push would come from and how long it would last, but Juncker wants to encourage the member states, as the current European Commission is already doing (see EUROPE 11120), to speed up and extend the Youth Guarantee. (MB and JK)