Making the euro zone into the "motor of the Union", in order to put an end to intentions (or suspicions) of directoires, vanguards, hardcores and similar? This is the plan of the "Spinelli Group". Made up of European Socialist MEPs, this groups bases its suggestion on the fact that the euro zone represents the most integrated element of European integration, and could thus play a leading role in economic and social governance. The group's manifesto, which was written following a seminar attended by MEPs and people from University and Union circles, contains detailed proposals on what it felt should be the programme of the Party of European Socialists (PES) in this field (the text can be found in Nr 23612362 of our EUROPE/Documents series, annexed to our bulletin of 27 February, including the list of members and experts).
The first comment that springs to mind is that Great Britain and the new Member States, which are not part of the euro zone, would be excluded from this "motor". Pervenche Bérès, who presented the document in Brussels last week having previously done so in Strasbourg, replied:
- with Great Britain, it is self-exclusion. London chose to stay outside the euro zone, which it can join any time it wants to. If it doesn't, its European role in economic and monetary affairs will necessarily be a small one. We could add that, among the suggestions of the Spinelli Group, some are of a fiscal nature, and they would be easier to adopt without the British;
-as for the new Member States, Ms Bérès doesn't agree that their joining the euro is a far-off prospect. She pointed out that time was when nobody would have thought Italy and Spain capable of joining the single currency with the first wave. The same could happen for some of the central and eastern European countries.
A detailed electoral manifesto. Beyond geographical comments, the essential lies in the content of the manifesto. It must be taken for what it aspires to be: in this document, the Spinelli group gives its position on the PES's electoral programme in socio-economic matters for the forthcoming European elections. This document is directed at the electorate, because there's no chance of its being approved by the institutions of the Union. Several euro zone countries are governed by centre-right coalitions which will not accept several of the measures it suggests. Michel Rocard, who did not personally take part in the final drafting of the text, welcomed its "unusual" nature: no vague and rhetorical wishes and aspirations here (as is so often the case, he feels, with PES documents), but a "precise and daring" programme, concretising a doctrine which is opposed to ultra-liberalism and monetarism.
The Spinelli group feels the euro is a success; it has sheltered Europe from the vagaries of the exchange rate and competitive devaluation. But the absence of the economic plank of the EMU alongside the monetary one leads to an imbalance, which the group feels could mean economic policies steered by the logic of the cleansing of public finances to the detriment of the social model, and that reforms (liberalisation of public services, tax competition, which encourages company delocalisation, etc) harm the renewed social policy which the group feels is fairer. Its draft proposes to "revise the rules and reform the institutions of the euro zone" in implementing the Lisbon and Göteborg strategies, using the following strategies:
A. Guidelines and objectives of the economic and social policy.
1. Using the "open method of co-ordination" (OMC) to set common objectives when common actions are not provided for, such as pensions reform, the gradual alignment of salaries and a new minimum wage (taking account of the standard of living in different countries).
2. Implementing increased tax harmonisation (if, with 25, "doing nothing" persists), resolving the "tax dumping which is rife within the euro zone". Harmonisation could take the form of tax bracketing linked to the Lisbon strategy, but the group prefers the formula of transferring part of a national tax (on companies, or an energy tax, or tax on savings), to be the basis of a Union own-resource instead of national contributions (thus meaning that the State would not necessarily have to increase its payments to the EU).
3. Implementing a concerted public investment policy in favour of innovation, research, education and life-long learning, renewable energy, protection of the environment, and the implementation of a transport infrastructure network.
4. In order to fund the policy in the previous point, giving the euro zone a specific budget and borrowing capacity, in other words the ability to use international stock markets. Community funding would help to ease certain national public deficits. Furthermore, several instruments of the Europe of 25 (the EIB, European Investment Fund, etc) should be reinforced, especially in favour of the new Member States.
B. Revision of rules and institutions.
1. Reforming the Stability and Growth Pact to give the word "growth" a solid meaning and to allow the word "stability" to cover not only price stability, but also social stability. The ceiling of 3% for national public deficit needs to be revised, to make it possible for it to be exceeded "when the Commission feels that economic indicators justify so doing" (in case of a slowdown in growth or recession), and a golden rule should be brought in to allow certain investments, which are "essential to consolidate the euro zone's long-term growth potential", even if they take the deficit over the 3% ceiling. The list of investments benefiting from this derogation would be laid down each year by the Euro Group.
Control of public debt would become multilateral, and, above all, should take account of long-term prospects. Public debt doesn't have to be zero, but it should be "sustainable", because it "remains indispensable for an investment policy which favours growth, social justice and technological innovation". "Sustainability" should be monitored multilaterally, because if debt is not sustainable, will necessarily lead to increased taxes in future.
2. The institutions of the euro zone should be reinforced (the document points out that in the Europe of 25, countries in the zone will be in the minority: their decisions will thus depend on the permission of the others), and in particular, the ministerial Council of the Euro Group should be able to meet and make decisions not only in the Ecofin (economy and finance) configuration, but also in the social affairs form and even general affairs. A notable duty of this Council will be to define (taking as its basis a Commission proposal and following the Parliament's opinion) the list of golden-rule investments (see above) and maintain a "transparent and regular" dialogue with the European Central Bank (ECB). The "Spinelli group" also thinks that "a euro zone European Council" should meet regularly, to allow Heads of State and Government to "evaluate the progress of the major long-term objectives" of the zone.
The document includes a re-balancing of the ECB's objectives in the institutional chapter, to accord the same importance to price stability and to employment. Furthermore, the European and American exchange-rate policies should be the object of concertation between the ECB and the EDF, and between the President of the Euro Group and the competent American Secretary of State, to "avoid" excessive fluctuations between the euro and the dollar.
The Constitution, more crucial than ever. The final part of the document is a plea in favour of the European Constitution, which, despite its shortcomings, is vital, because: it brings in the principle of symmetry between the Union's economic and social concerns, protects "services of general interest", extends the scope of the "Community method", approves the creation of a "euro zone Ecofin Council", provides for the euro and the euro zone's external representation, and democratises the modification of the ECB's regulations by bringing in Parliament/Council co-decision, and Council's majority voting.
The institutional reforms and the guidelines of economic and social policy mentioned should be implemented by creating "reinforced co-operation for the euro zone", because initiatives would be open to all countries of the Union, would work as part of Community institutions and the new dynamic would encourage the other Member States to join in (pending the Constitution, however, the Treaty of Nice provisions would have to be used). The implementation of the programme proposed goes via "unstinting support for the draft Constitution drawn up by the Convention".
Giving the floor to the voters. In conclusion, the Spinelli group calls upon the PES to develop an electoral campaign drawing inspiration from its manifesto, and recommends that the Party appoint a common candidate for the Presidency of the next Commission, ahead of the European elections.
If the PES follows the Spinelli group, an alternative plan to the one prevalent in Europe today would be proposed. This is also the reason our bulletin gives it so much houseroom (as it will for all other electoral programmes). For the plan's proponents, the road will be a tricky one, within the PES (British Labourites would feel left out from the "leading role"), and then as part of the electoral campaign. It will be up to the electorate to chose between the various models. (F.R.)