Brussels, 26/04/2005 (Agence Europe) - The two regulations that modify the Stability and Growth Pact (SGP) “must be read in parallel with the elements that do not need to be changed” and with the code of conduct that ensures “concrete application”, the European Commissioner for Economic and Monetary affairs stressed on Tuesday. Speaking before the parliamentary committee on economic and monetary affairs, Joaquin Almunia hoped review of the two regulations proposed by the Commission on 20 April (1466/97 on preventive aspects and 1467/97 on correcting aspects: EUROPE 8932) would be rapidly approved to “put an end to the uncertainty surrounding the Pact”. Mr Almunia nonetheless noted a number of MEPs were suspicious about the code of conduct and that questions were raised regarding its relevance for the interpretation of texts.
Since 23 March, application of the Pact takes into account the agreement endorsed by the Heads of State and Government during the European Council of 22 and 23 March, except the provisions that are to be amended, namely: structural reforms, the definition of the situation of serious economic recession, relevant factors, longer time limits, the repetition of the different stages of the procedure, and definition of medium-term objectives. At this stage, the Commission continues to work towards amending the current code of conduct, Mr Almunia states, recalling that the instrument, which is without binding force, will especially take up the targeted adjustment trajectories and specify the budgetary reduction efforts of 0.5% of GDP by the Member States in periods of good economic growth.
Othmar Karas (EPP-ED, Austria), rapporteur on the matter, asked: “Is it not sad to need a code of conduct?” He said it was superfluous if one takes what one does seriously, recalling that, at any rate, the Parliament should know the code to calculate the effect it would have on changes to regulations. Mr Karas, who calls for a more exact definition of excessive deficit, stressed that, if one wants to respect the Pact to the letter, then one must be clear about what that letter is. Luxembourg Socialist Robert Goebbels was of the same view, wondering whether a code of conduct is in fact needed when there are texts to which the 25 Heads of State have subscribed. In his view, the role of the Commission will be strengthened “if it does its work considering the real situation of States and the efforts they make”. Thus, the former Luxembourg budget minister is pleased to say, the Commission will practice “naming and shaming”, not advocated by the European Council. Such a prospect does not displease the CSU elected member Alexander Radwan, who wishes to know how the Commission plans to apply such rules, and above all what the terms“a little over 3% and in the short term” mean. He went on with the mischievous proposal that the German situation should serve as a reference to illustrate the Commission's future approach. Also awaiting interpretation of the Pact, German Liberal Wolf Klinz said that the confidence of citizens had been undermined, “if not lost” altogether. Jean Pau Gauzès (EPP-ED, France) welcomes changes on the other hand, signed, he believes, not with increased flexibility but with greater “elasticity”. The Spanish Socialist, Antolin Sanchez Presedo, was also pleased, urging for intelligent implementation of the Pact, that is neither “mechanical nor strict”, and hoping that the code of conduct will not become a “straitjacket”. Paolo Cirino Pomicino (EPP-ED, Italy) felt that excessive deficit also depends on the kind of spending. Giving the example of a 3.9% deficit (like Germany), the elected UDEUR member said that, if the excessive deficit of 0.9% were due to a rise in investment in sectors considered important by the Commission and not only to current expenditure, then that should be taken into consideration.
Joaquin Almunia called to mind when speaking to MEPs that the code of conduct, which is supposed to implement the agreement on the Pact, is “nothing new”. It exists and he believes this to be necessary as it takes up certain practical, procedural and technical elements. In the meantime, during the drafting of the report on Italian and Portuguese excessive deficits (Article 104§3), the Commission will apply the “relevant factors that already appear in the Maastricht Treaty (…) and we shall see what the 3% situation is”. Mr Almunia simply recalled that 3.9% is not close to the reference value, but then neither is 3.7%. In the Italian and Portuguese cases, the deficits are 3.6% and 4.9% of GDP respectively.