Brussels, 07/11/2002 (Agence Europe) - The plenary debate on Thursday afternoon on the report of the European Convention group chaired by Klaus Hänsch on economic governance confirmed the differences expressed within this group (see summary of report in EUROPE of 4 October, p.8). Convention Chairman Valéry Giscard d'Estaing himself recognised when opening the work that this had not been an "easy undertaking" as, when one speaks of economic governance, "one touches upon the content of policies", when one should not confuse content, "orientation of economic policy" in the EU and "governance", namely the framework and the principles to be followed.
Klaus Hänsch also admitted that the working group had been "extraordinarily difficult" but "fascinating" at the same time, because it showed "the conflicting lines we have to face" at the Convention. At the centre of our debates, he pointed out, was above all the coordination of economic policies which must necessarily be more effective "now that we have a single currency". However, the divergence over the role to be attributed to the European Commission in this context was not resolved, even though Mr Hänsch did make some proposals. Thus, the "most important" proposal by his group is that of giving the Commission an "autonomous" role without having to have a Council decision, in the system for early warning to Member States that exceed the ceiling of budgetary deficit allowed. Another proposal is that the open method of coordination (launched at the Lisbon Summit, the first Spring Summit) should be included in the Treaty but with a series of precautions, mainly to prevent it resulting in the "furtive" transfer of Member States' powers to the Union. Regarding the Eurogroup, the Hänsch working group considers it should keep its informal nature, while formal decisions concerning countries of the euro zone should be taken within the Ecofin Council, and only by these countries without the participation of Member States that have not joined single currency.
Several Convention Members regretted the modest results of the working group. Such is the case of European Commissioner Michel Barnier, who felt the result is unfortunately not up to the challenge of an enlarged Union managing a currency that is partly a common currency. The European Commission "does not propose turning the system upside down", he assured, stressing that the eocnomic policies will remain under the competence of Member States. He did add, however, that it is "reasonable and necessary for the arbiter to be able to exert normal power of proposal", whether it concerns the Broad Economic Policy Guidelines or the Stability Pact. It is therefore reasonable, he said, for the Commission to be able to address the Member State concerned "directly" not only in the case of excessive deficit but also if there is too great a gap between its policies and the broad guidelines agreed for economic policy. Just as it is "reasonable and necessary" for the State that receives a warning to be excluded from voting on the launching of the warning. As far as the Eurogroup is concerned, Mr Barnier warns that, from 2004, with enlargement, "we shall have a real problem, as the countries of the euro zone will be in the minority, and there will be a real risk of paralysis". Mr Barnier also stressed the need to propose "something serious" for the EU's external representation in economic and financial matters, whether it is the Commission that is chosen or another solution.
Pierre Moscovici, representing the French government, affirmed on the question of external representation that it was necessary "to go to the very end". He felt that the Eurogroup should be strengthened, by including its role in the Treaty or in a protocol to the Treaty. Also, the Eurogroup should, he believes, have an "elected president" for a longer period than the six-monthly rotation allows, "for example for two years". With regards the social Europe (which was at the centre of plenary debates later in the evening, and to which we shall return), the former Minister for European Affairs hammered out that the importance of its role "amply justifies the creation of a working group" at the European Convention. Mr Bury, alternate to German Foreign Minister Joschka Fischer agreed with the idea of a Eurogroup presidency of up to two years but felt it would not be "reasonable" to formalise its role. Mr Bury, who spoke at the Convention for the first time, fears this could indeed empty the Ecofin Council of its role, at the same time marginalising the new Member States which will not be part of the euro zone. CDU member Elmar Brok considered the role of steering the Eurogroup should be played by the European Commission. Mr Brok, moreover, "very warmly" urged for the creation of a working group at the Convention on social Europe, and felt (as did the majority of the working group) that a wrong message would be sent if the Convention were to call for changes to be made to the mandate of the European Central Bank. "The ECB has given us price stability, better even than that of our DM for fifty years of which we were so proud", he said.
British Liberal Democrat Andrew Duff also felt the provisions concerning EMU should not be changed (although they should be better implemented by the Commission and Member States). In his view, however, reform would be desirable with regards the Union's representation in international financial organisations. "If it were united, Europe would exercise 30% of the votes at the IMF and the organisation's headquarters would have to move to Europe (from Washington) - possibly the City of London", he remarked. The representative of the Austrian Parliament, Caspar Einem, took a stance in favour of including objectives in the Treaty that places "the human individual" at the centre of European construction (in a contribution to the Convention, he also proposed that the European Parliament should in future be able to censure the ECB President). The representative of the Italian government, Gianfranco Fini, believed it would be a good thing if reference were made in the Treaty to the "dialogue between social partners" in order to "settle eventual conflict". Regarding the problem of the Eurogroup, a solution that deserves to be looked at more closely, he said, is that of considering it "a little like a case of enhanced cooperation".