Brussels, 11/12/2014 (Agence Europe) - The Social Democrats at the European Parliament are bringing pressure to bear for the European Council of 18-19 December to approve the suggestion of the European Commission to neutralise, from the point of view of the Stability and Growth Pact, the direct contributions of the states to the European Fund for Strategic Investment (EFSI) laid down in the Juncker plan (EUROPE 11205).
If this concept of neutrality is accepted, it would be a “revolution”, said the Portuguese Socialist Maria João Rodrigues, on Thursday 11 December, at a presentation by the S&D group of the EP of the 'Annual and independent growth review' put together by several economic analysis research bodies, such as OFCE of France, ECLM of the UK and Germany's IMK (see other article and EUROPE 11205 and 11215). The S&D group also takes the view that this neutrality should apply to national funding under European programmes such as Horizon 2020 and ultimately to national co-funding of projects supported by the structural funds.
According to the Portuguese Socialist, the next Summit should “go further” to build real investment capacity at European level: on the back of national contributions to its capital, the EFSI could be authorised to borrow on the markets. Drawing down €315 billion in private investment in three years through the EFSI “bears no relation to the scale of investments we need in Europe”, said Rodrigues, referring to an envelope of “1,000 billion euros”. On behalf of OFCE, Xavier Timbeau put the annual investment requirement at between “2% and 4% of GDP”, or €100 billion and €170 billion for the eurozone and the EU respectively. The French researcher approves of the creation of a “supranational vehicle” capable of taking out “mutualised debt” and redistributing the amounts borrowed in the EU, subject to conditions such as “budgetary discipline”.
Unlike the European Stability Mechanism (ESM), the EFSI will have the advantage of working on a community basis, said Rodrigues. The European Parliament will fully play its role as co-legislator and the European Commission will have a seat on the fund's governing council.
New Deal. The MEP voiced her hopes that the European Council would be in a position to lay the foundation of a 'New Deal'. She said that the priority of EU budget policy should be given to growth through investment rather than to budgetary consolidation and, at the same time, the emphasis should be laid on structural reforms which increase the growth potential of the country (education, research, modernising the administration), instead of focusing on cuts in public expenditure and the cost of employment. This is what is happening at the moment, she said: in exchange for the EU's acceptance of “a more reasonable pace for budgetary consolidation, France and Italy accept the reforms”. (MB)