In their manifesto and political priorities published in advance of the European elections, which will take place from 23 to 26 May, the major European political families adopt, without much surprise, different approaches to economic and financial issues, while remaining fairly generalist.
The first observation is that these economic and financial issues do not appear at the top of the political agenda of European parties, with migration and/or climate issues being put first.
"Five years ago, Europeans focused their attention on the economic situation of a continent then entangled in the sovereign debt crisis, the risk of deflation and a deepening economic recession already underway. Today, people are more focused on less economic considerations, but which were already in the making in the 2014 elections, such as climate change and immigration", as the Robert Schuman Foundation points out.
Another point that is of concern is that the economic and financial lines of European political families remain generalist. Indeed, while the major reforms or issues currently under discussion in the Eurogroup, the Ecofin Council or the European Parliament are mentioned, each side refrains from making specific recommendations here as to the architecture of a particular instrument. The internal divisions within European parties between national delegations are probably a factor.
Nevertheless, the major political families adopt different approaches and tones with regard to the major economic and financial issues, due to their very heterogeneous ideologies.
EMU. The deepening of the Economic and Monetary Union (EMU) has been high on the European economic agenda since the European Commission's proposals in this area in December 2017 and May 2018 (see EUROPE 11920/1, 12031/7).
This includes the development of fiscal capacity for the euro area. The creation of such an instrument is being discussed in the Eurogroup, with a proposal for an architecture to be formulated by June by the Finance Ministers (see EUROPE 12160/1), while the European Parliament was unable to agree on a text before the end of the current parliamentary term (see EUROPE 12197/18).
The Party of European Socialists (PES) is taking a rather traditional line here. It argues for a budget for the euro area that promotes a bottom-up socio-economic convergence ('upward' convergence). Objective: to ensure "there is no drop in investment levels, notably social investment, and to support national unemployment benefit systems". This idea is similar to the stabilisation function, which the Commission wanted, but which is not accepted by several Member States, particularly in Northern Europe.
The European Green Party (EGP) wants the budgetary capacity for the euro area to be open to countries that have not adopted the common currency, and wants this function to be characterised in particular by solidarity mechanisms.
For the Alliance of Liberals and Democrats for Europe (ALDE), financial instruments should be used to mobilise private capital and foster innovation, while linking these investments to the structural reform agenda.
The reform of the architecture of the European Stability Mechanism (ESM) is also due to result in a proposal being presented by the Eurogroup in June (see EUROPE 12177/3), while the European Parliament took a position on the issue in March (see EUROPE 12214/8).
On this point, the European People's Party (EPP) and the Liberals are calling for the ESM to become a European Monetary Fund (EMF). For Liberals, it must be subject to "strict conditions" when granting aid to euro area countries, in order to avoid a "moral hazard" through which a state would become excessively indebted, convinced that its peers will always come to its aid.
Environmentalists call, on this point, for the ESM to be integrated into the European Union's legal framework with the involvement of the European Parliament.
On the institutional side, they also want the Eurogroup to become an "ordinary body" of the Council of the EU. The Social Democrats are also calling for the Eurogroup to have a permanent president, who is also a Commissioner and therefore accountable to the European Parliament.
Inseparable from the deepening of EMU, the completion of the banking union in the euro area is on the European economic agenda. Work is ongoing at the Eurogroup on the creation of a common backstop for the Single Resolution Fund, the financial arm of the resolution arm of the banking union, and a European Deposit Insurance Fund (EDIS).
On these two elements, discussions are progressing at quite different rates (see EUROPE 12226/8).
With regard to EDIS, the EPP, the PES and the EGP all want it to be put in place, with a view to completing it in the Banking Union. But Christian Democrats insist that financial risks (e.g. the stock of non-performing bank loans) must have been significantly reduced in advance.
It has to be said that, due to a lack of financial urgency and political will, work on the deposit insurance component has long stalled because of the refusal of some Member States, such as Germany, to allow their banking systems to wipe out the liabilities of the banking systems of countries in difficulty.
FINANCE. Financial stability and the prevention of future crises remain a major concern for European political parties. In their manifesto, both the EGP and the PES call for stricter financial regulation and supervision.
"We want stronger financial regulation, greater guarantees that the banking sector will foot the bill for failing banks, and stronger safeguards for depositors and their savings no matter where their bank is located", says the PES.
The PES also calls for firewalls between commercial and investment banks, while the proposal to reform the structure of the banking sector has been ignored due to the European Parliament's inability to take a position on the issue (see EUROPE 11322/6).
For the Party of the European Left, what matters most is the establishment of democratic control of the financial markets and banks.
Access to finance for small and medium-sized enterprises (SMEs) is also given particular attention in the political agendas of the PES, ALDE and EGP. "Smarter regulation should guarantee SMEs a fair playing field with big companies", says the EGP.
Sustainable finance, on the other hand, seems to be a consensus. The EPP sees the transition to a low-carbon economy as a "great opportunity for the EU". In terms of concrete proposals, the most developed are those of environmentalists who advocate an 'ecological New Deal' to finance and mobilise investment in areas such as cross-border rail links, renewable energies, sustainable innovation and a just transition, particularly in the poorest Member States.
The PES also believes that "We need new public issuances of green financial instruments at EU level" to cater this transition to a low-carbon economy.
Identified by the Commission as one of the major challenges of the coming years (see EUROPE 12227/15), financial technology ('FinTech') is however not very present in the programmes of European political parties. The Greens briefly mention "the management of crypto-currencies", while the Liberals stress the need to create "a solid legal framework for new technologies", such as the blockchain.
FISCAL POLICIES. Budgetary policies, linked to the 'European Semester' process, are finally being raised by all the major European political families, with a very different tone.
It should be noted that Liberals want Member States to take advantage of the positive economic situation to prepare for the EU's future challenges, using rhetoric rather similar to that of the Commission (see EUROPE 12203/1). They also call for a more effective control and sanction mechanism in the event of non-compliance with the rules of the Stability and Growth Pact.
The EPP is in favour of national responsibility, particularly with regard to public debt, and recalls that it supports sound budgetary policies and finances.
For the Social Democrats, a balance must be found between sound public finances and solidarity. And fiscal rules should be revised to support employment and sustainable growth. This language is to some extent similar to that of environmentalists, for whom environmental and social objectives should be placed on an equal footing with budgetary objectives in the context of a new Stability and Growth Pact.
As for the Party of the European Left, in disagreement with the macroeconomic policies implemented since the 2008 financial crisis, it calls in particular for a European conference on public debt, "at which long-term structural solutions for its restructuring and reduction will be finalised and put in place".
Finally, one of the components of fiscal policy concerns public investment policy. To put an end to the excesses of economic austerity policy, the far left is prioritising "a vast programme of public investment in key social areas".
All pro-European political forces - EPP, PES, EGP - underline the importance of targeting investments to meet international and societal challenges such as the green transition, the digital revolution and the development of artificial intelligence. Only the EPP explicitly mentions the Juncker investment plan, which in 5 years would have created more than 750,000 jobs and improved access to finance for 850,000 small and medium-sized enterprises.
"We want to continue on this path and create the conditions for the creation of at least 5 million new jobs in the coming years, especially for the younger generation", the Christian-Democratic manifesto stresses. (Lucas Tripoteau and Marion Fontana)