Milan, 29/01/2002 (Agence Europe) - In a speech delivered on 28 January at Bocconi University, in Milan, on the theme "Economic and politico-institutional arrangements for the new Europe", Commission President Romano Prodi again urged, as he has regularly done mainly since the arrival of the euro, for closer coordination of the economic policies of the EU Member States. He gave advice in order to avoid "manifest errors that, in the eighties, brought us to the brink of unsustainability". He said that: - experience teaches us that "wrong policies are usually followed in times of plenty". "It is the expansive policy when the cycle is at its peak that causes us to lose the room for manoeuvre when it is really necessary, i.e. when growth weakens", he continued. "But the Stability and Growth Pact makes no provisions to deal with this", notes Mr Prodi, saying: "We could have common rules regarding the use of the tax surplus when times are good and tax revenue is higher than expected, varying slightly from one country to another on the basis of indicators, such as the distance from the objective of a balanced budget, the stock of outstanding public debt or other factor" whereas "the Stability and Growth Pact focuses on the short term, but the main problem is the long-term sustainability of public finances, which is threatened by the ageing of the population". According to Mr Prodi, even if specific solutions have to be national, "it is essential that we incorporate a common approach in our rules".
Furthermore, Mr Prodi repeated that spending for enlargement must be seen not as a cost but as an investment and that "in any event, we must make it very clear that we are fully able to bear that investment". "Even after financing the enlargement the Union's budget will remain below 1.27% of Community GNP!" exclaimed Mr Prodi.