The importance of Economic and Monetary Union (EMU) is beginning to get recognised. The Convention Presidium has strengthened (but not sufficiently, according to the European Commission but the first step has been taken) the provisions of the constitutional treaty in this regard. The Convention will be debating this on Friday. This is the first result of a rather large movement in this direction as observed recently.
To begin with, there was the foresightedness of Jacques Delors: he denounced the unsteady character of Economic and Monetary Union, with one sure leg and the other economic one, limping along. He also condemned this when the Euro was officially launched. Since then, he has not ceased to underline that the Union loses around one percentage point of growth every year as a result of weak economic coordination. He blames this on most of the Finance Ministers, which refuse, with a few exceptions, pooling their competencies, which would create an economic counterweight on a scale of the European Central Bank. This was again referred to last week in the speech at the 50th anniversary of Agence Europe (see our bulletin on 22 May p 3). Its coherency and steadfastness has begun to bear fruit. I'll give three examples.
A. The contribution by the "Spinelli Group" at the Convention, drafted by Pervenches Berès, Olivier Duhamel, Klaus Hänsch, Jacques Poos, Michel Rocard, etc. and already signed by several other personalities (see issue 2317 in our EUROPE/Documents series annexed to the bulletin on 8 May). Among the essential demands, together with defence and the setting up of an avant-guard known as the "Progress Coalition", the members of this group of socialist MPs have demanded that Monetary Union be "based on real economic and social governance". In presenting the document, Ms Pervenches Berès insisted on the need for the Convention to take a position that went in this direction.
B. The contribution of Pierre Lequiller to the Convention "for an economic government of the European Union". This paper is significant not only because of its content but also because it proves the need for "an economic government of the European Union" (that's the name of the document) which is not an exclusive demand made by Socialist MPs or MEPs (Mr Lequiller represents the French National Assembly at the Convention). Mr Lequiller has also requested that the Commission's role for putting forward proposals be strengthened, that the European Parliament is brought into procedures pertaining to economic coordination, that Euro Group (which is expected to have " a real capacity for making decisions on all issues involving the Euro zone") and that progress is made to single external representation of the Euro. Me Lequiller asserts that, "the economic awakening of Europe is impossible without genuine coordination of economic policies that have been implemented…Without strengthened economic coordination there will not be strong and sustainable growth and without first class economic and commercial power, there won't be a political Europe".
C. An interview with Commissioner Pascal Lamy (in Rome), who called on business leaders and trade unions to demand "economic reform" that was the most simple and least expensive (if we compare it to other s who raise far more problems, such as pension reform): namely, coordination of economic policies, which will increase growth by half a percentage point. The resistance of Finance Ministers will need to be overcome and they will need convincing of the need to "put their egos to one side".
On Friday we'll be able to see the Convention Members who support it. The innovations proposed by the Presidium can be summarised thus: : a) the Commission will be able to directly emit "warnings" to Member States in cases of excessive budgetary deficits or if the Broad Economic Policy Guidelines (BEPG) are not adhered to; b) the Council's observation that an excessive deficit will be based on a Commission proposal (that is caries more legal punch than a simple recommendation); c) the Ecofin Council will be able to meet up in a "Euro zone countries group" involving all Member States that participate in the work but where only Euro-zone countries can vote. In this grouping, the Council would be able to adopt specific BEPG for the Euro-zone and identify budgetary deficit in one of the zone countries.
The Commission and certain Convention Members (we'll be able to see who they are on Friday) believe that the Presidium draft is still insufficient. The Commission should therefore have the facility for proposing and not only recommending BEPG, Eurogroup will be expected to have full status of a limited Ecofin Council; external Euro representation should be single and confined to the Commission. It is a waste of time going into too many details, the debate on Friday will clear things up. (FR)