Brussels, 06/10/2014 (Agence Europe) - Valdis Dombrovskis, the Commissioner candidate for the Euro and Social Dialogue, easily passed the test of his hearing before the European Parliament on Monday 6 October, although he struggled to put forward concrete proposals on how to reinforce the social dimension of the Economic and Monetary Union (EMU).
To the detractors of the single currency from the EFD Group or the ranks of the unaffiliated MEPs, Dombrovskis referred on several occasions to his experience as head of his country, between March 2009 and early 2014. My country experienced an “unprecedented crisis” without even having adopted the euro, therefore the euro is not the cause of the problems a country can experience, he said. When you are facing a global financial crisis, it is the countries with structural weaknesses and major macro-economic imbalances which will have the most problems, he added, firmly convinced that the euro is particularly suitable for small countries with a particular focus on exports, like Latvia. The current institutional architecture of the EMU is not perfect and needs to be consolidated, particularly to take on board not just financial and budgetary aspects, but social norms as well. This is the mission conferred upon him by Jean-Claude Juncker.
Will you prevent a country wishing to leave the eurozone from doing so, asked Bernd Lucke (ECR, Germany). As things stand, the only way of doing this is to leave the EU as well, the Latvian replied. He went on to state that the Commission would provide its “technical assistance” to any state requesting to do so, by means of a change of treaty making such a move possible, although he would never defend a political plan of this kind.
“The euro and social dialogue are two sides of the same coin”, said Dombrovskis, speaking out against an entire lost generation, with youth unemployment at a level of over 21%. He tried to distance himself from his reputation as an unswerving practitioner of economic austerity, with several MEPs asking him for details on the measures taken to get his country out of its rut. By cutting civil servants' salaries and pensions by 20% and 10% respectively, said Bernard Monot (NI, France), Latvia went from a recession of 18% of GDP in 2009 to growth close to 5% in 2012 (see EUROPE 11169). We made a choice to come out of crisis as soon as we could, Dombrovskis explained. He referred to some of the measures adopted to help the categories made most vulnerable by the crisis: creating a social assistance network, launching a temporary employment programme, providing medical care to people in precarious situations.
The fact remains that 250,000 young people left your country and Latvia is one of the least egalitarian countries in Europe, observed Pervenche Berès (S&D, France) and Paloma Lopez (GUE/NGL, Spain).
Democratic legitimacy. Sven Giegold (Greens/EFA, Germany) and Kostadinka Kuneva (GUE/NGL, Greece) questioned the Commissioner designate on how to reinforce the democratic legitimacy of the troika, the entity tasked with monitoring the application of the rescue plans for the countries of the eurozone and to negotiate, with these countries, the adaptation of their adjustment programmes applied in exchange for financial assistance. The troika format must obey the rules of the “Community method” and it is clear that “any rescue plan will also involve an assessment of its social impact”, said Dombrovskis. The former Latvian MEP also argued in favour of a medium-term transfer of the European Stability Mechanism, the permanent bailout fund of the eurozone, under the Community umbrella.
Stating that it is “possible” to reinforce social dialogue at European level, the former Latvian prime minister said that the social partners - whose representatives he has met - should be more involved in drafting the annual growth review, the Commission document which marks the start of the European semester budgetary process. In response to a question from Cora van Nieuwenhuizen (ALDE, Netherlands), he acknowledged the importance of reinforcing the national “appropriation” of the socio-economic policy recommendations made each year to the member state by the European Council. Additionally, like the existing procedures for the use of the structural funds, the Latvian argued in favour of using “macro-conditionality” as a future precondition for the granting of European co-funding in line with EU budgetary rules. Admittedly, the Commission could be “more imperative”, he said, as the failure of a country to comply with its specific recommendations could lead to the triggering of macro-economic imbalance proceedings. He spoke out in passing, like Marianne Thyssen, Commissioner designate for Employment and Social Affairs, in favour of equal weight for social and economic indicators.
Relations with Pierre Moscovici. Elisa Ferreira (S&D, Portugal) and Sylvie Goulard (ALDE, France) asked Dombrovskis how he envisaged the division of competencies with those of the Commissioner designate for Economic and Monetary Affairs and Taxation, Pierre Moscovici of France. Our relationship will be “collegial”, there will be no “subordinate relationship”, the Latvian commissioner stressed. He went on to point out that practical arrangements will be made to decide which of them will represent the eurozone to international financial organisations.
Lastly, Dombrovskis argued in favour of introducing minimum salaries at national level. (MB)