Brussels, 04/06/2015 (Agence Europe) - The French and German ministers for the economy, Emmanuel Macron and Sigmar Gabriel respectively, are calling for the eurozone to have fiscal competence, in order to “improve the ability to provide automatic stabilisation and allow the European level to expand or tighten fiscal policy in line with the economic cycle”.
In a joint article published in several European newspapers, the two ministers argue that initially, “fiscal competence in the eurozone could be developed in the framework of the Juncker plan in order to fund investment projects (infrastructure, European networks, venture capital, etc)”. Then, “we will be able to create a genuine fiscal capacity for the euro area”, they add. This fiscal capacity would have two planks: a 'production' plank to support investments and a 'stabilisation' plank with automatic European stabilisation mechanisms. It would have its own resources, for instance from the financial transactions tax (FTT) or a “small portion of a harmonised corporate tax” and a borrowing capacity.
Sustainability of public finances. A eurozone-level budget “should not and need not come at the expense of fiscal discipline at the national level”, Macron and Gabriel argue. This balance would be reinforced by the setting in place of a legal framework for orderly and legitimate sovereign debt restructurings, should they become necessary as a last resort. The aim would be to increase the level of responsibility of countries receiving aid from the other states, whilst avoiding inappropriate austerity. As the European Parliament suggested in 2014 (see EUROPE 11038), the permanent bailout fund of the eurozone - the European Stability Mechanism (ESM) - would become a community tool and “transformed into a proper European Monetary Fund”. More responsibility for the eurozone would mean greater democratic control, the ministers argue, for instance via a 'eurozone' formation at the EP, but also with a European Commissioner for the Euro (see EUROPE 11019).
“Strengthening the euro is not only about the eurozone”, Macron and Gabriel stress, calling for a broader rethinking of the EU, “not least because we need to be able to answer the key question: what about the other member states?”. The two ministers call for a clearer and more efficient Union, with more subsidiarity and simplified governance. “We should therefore make a new step towards a better-integrated internal market, with a targeted approach on key sectors like energy and digital economy”, they write. They also expressed their support for a rollout of the Erasmus programme, to allow every European reaching the age of 18 to “spend at least one semester in another EU country”.
Speaking on behalf of the ECR group at the EP, Belgium's Sander Loones said that if applied, the Franco-German idea would undermine Europe's economic competitiveness. He argued that the vision is not wanted by many other euro nations. Sylvie Goulard (ALDE, France) described the article as well-balanced and bold. (Elodie Lamer)