The Social Democrat family intends to bring pressure to bear to ensure that the reflection on the future of the European Union of Twenty-Seven, which is scheduled to conclude to coincide with the 60th birthday celebrations of the Treaty of Rome in March 2017, includes matters related to socio-economic convergence in the Eurozone.
"We must smash the dogma of budgetary policies", which have not been conducive to real economic recovery, said Mario-João Rodrigues (S&D, Portugal), on the sidelines of the presentation of the report by the French economic observatory (known by its French acronym, OFCE) on Monday 14 November, flagging up the shortcomings of economic recovery at the moment. The MEP said that the Social Democrats wanted to include crystal-clear references to the objectives assigned to the Eurozone in the roadmap to be adopted by the Twenty-Seven in Rome next spring. "Mrs Merkel does not want to tackle issues related to the Eurozone" because she sees them as divisive, she regretted, describing the German Chancellor's position as a "big mistake". She feels that the question has divided the coalition government in Germany, because the German Social Democrats are prepared to discuss it.
In a joint statement on the need for a Europe which is capable of responding to the many challenges it currently faces, six Social Democrats Secretaries of State - Harlem Désir of France, Sandro Gozi of Italy, Germany's Michael Roth, Ann Linde of Sweden, Portugal's Margarida Marques and Ian Borg of Malta - identified several priorities for action on Monday. These include social justice (e.g. creation of a European standard minimum salary adapted to different national situations) and a new strategy in favour of investment and deepening Economic and Monetary Union (e.g. creating a budgetary capacity for the Eurozone).
Anticipating the publication of the opinions of the European Commission on the draft 2017 budgets of Eurozone countries, the OFCE report aims to answer the questions of the S&D group on bringing the current economic policy mix into line with the urgent need to cut unemployment and social inequality and to facilitate an environmental transition. "Slowly but surely, inequalities are increasing at Eurozone level" and within the countries themselves, said Xavier Timbeau, Associate Professor at the French École Supérieure d'Électricité (Supelec, graduate engineering college) and one of the authors, referring to countries such as Spain and Greece, but also Germany, the largest Eurozone economy.
As an accommodating economic policy is not enough, on its own, to stimulate the economy of the Eurozone, Timbeau called for a systemic political response to take account of the global socio-economic consequences of the measures taken at the level of a country or the continent. "You can't reduce both debt and unemployment", he said by way of example, criticising the nature of the response to the economic situation made by the Commission, despite an adequate diagnosis.
In particular, the authors of the report call for a genuine demand-side effort, through investment rather than expenditure. Mobilising public debt at a level of 1% of GDP for investments made optimally will help to concretise public assets at a level of up to 4% of GDP, said Timbeau, who is in favour of including a golden rule for investment in the European budgetary pact. (Original version in French by Mathieu Bion)