Brussels, 04/05/2015 (Agence Europe) - The social democrats at the European Parliament want to take an active role in the current debate about boosting economic and monetary union (EMU) that will lead to publication of a 4+1 presidents' report to the European Summit in June.
Portuguese MEP Maria João Rodrigues commented: “Flaws in the initial design of the single currency have made the effects of the global economic crisis deeper and longer, generating huge economic costs, social suffering and political tensions within and between member states. (...) Ultimately, monetary union must be completed with a strong economic, fiscal and banking union. This progress must go hand-in-hand with stronger democratic legitimacy” (see EUROPE 11266).
In the document they agreed upon, the S&D group makes the following proposals: - boosting the democratic legitimacy of decision-making processes; - encouraging closer economic cooperation by setting annual budget targets at eurozone level; - ensuring a 'balanced' monitoring of national current accounts in order to address both deficits and surpluses; - setting joint social standards and introducing a common, consolidated company tax basis in order to avoid a “fiscal race-to-the-bottom” between countries; - introducing an “EMU fiscal capacity encompassing own resources and a borrowing facility to improve the absorption of country-specific economic shocks and boost social investment.”
The S&D's parliamentary group explains that the idea behind the policy paper is to consider ways of making as much progress as possible without amending the existing treaty. The key problem, explains a source, is the imbalance among the member states, adding that without some degree of economic integration in the short-term, one would face disaster as growth is low, unemployment is high and it will take time for the Juncker investment plan to have an impact. The S&D group has dropped the idea of demanding the setting up of a redemption fund to jointly manage the excess portion (above 60% of GDP) of public debt as a way of pooling some eurozone nations' debt (see EUROPE 10528).
In order to boost EMU's legitimacy, the social democrats call for a “real democratic offensive” at European level to restore credit to the Community Method. The European Commission needs a greater role in Eurogroup, making the competent European Commissioner a 'coordinator' of Eurogroup, on a par with the Eurogroup's chair. This stronger role for the Commission would be balanced by the duty to report to the European Parliament. The eurozone's permanent bailout fund, the European Stability Mechanism (ESM), which is currently based on an intergovernmental agreement, should be turned into a proper European Community instrument.
The EP's economic and monetary policy affairs committee, chaired by Pervenche Berès (S&D, France), is drawing up proposals on boosting EMU and a new debate is scheduled on the matter on Wednesday 6 May. (Mathieu Bion)