Brussels, 14/10/2014 (Agence Europe) - The Finance Ministers of the Eurozone are working on a 'New Growth Deal', which will tie structural reforms in together with investment, in an idea they will put to the Eurozone Summit to be held on Friday 24 October.
“In the Euro summit I will go further into the idea of what I have called a 'new growth deal for the euro area', connecting our reform agenda to the pace of budgetary consolidation and to supportive investments”, President of the Eurogroup Jeroen Dijsselbloem said on Monday 13 October.
The Dutch minister stressed how hard it is for Europe to bring pressure to bear on certain states, such as France or Italy, to get reforms underway. He asked how investment can be supported in a country committed to significant structural reforms, or taking better account of the reforms in the analysis of the trajectory to bring down public deficit in the medium term, “with the condition that the reforms are decided upon by national parliament and not just promised”.
Reporting a “highly consensual” discussion between the ministers, Dijsselbloem spoke of a few areas regarding the actions to be undertaken to boost investment. Nationally, the services sector could be more open to competition. At European level, the completion of the single capital, digital and energy markets will have a beneficial impact on the economy, he added.
In conclusions on measures aiming to support investment in Europe, which it adopted on Tuesday 14 October, the Ecofin Council stressed the “nexus” between investment and structural reforms and the importance of identifying reforms which are likely to create a “conducive business climate” in Europe, making full use of the country-specific recommendations adopted by the European Council. It recognises “strong synergies” between investment and the single digital market agenda, and welcomes the analysis currently being carried out by the Commission on “key investment conditions”, such as “efficient public administration and labour market”.
Does the European Stability Mechanism (ESM) have a contribution to make towards the €300 billion investment plan promised by the President-elect of the Commission, Jean-Claude Juncker? Such a procedure would “require treaty change” and lead to “strong debate” at the ESM advisory board, said Dijsselbloem, in a reference to Germany's refusal to consider the French proposal to use a proportion of the available EMS funds to boost investment.
As regards the investment plan, the Commissioner for the Euro , Jyrki Katainen, has taken on board a suggestion of the future Economic Affairs Commissioner, Pierre Moscovici of France: “we need to make available as much public investment as necessary, and as much private investment as possible”. He also argued in favour in increasing the lending capacity of the EIB, although, he added, further capitalisation of the European institution would not be a magic bullet, as the impact assessment on the previous recapitalisation has still to be carried out. The Commission and the EIB have been tasked with identifying why certain major cross-border infrastructure projects are difficult to set in place. (MB)