Brussels, 27/06/2007 (Agence Europe) - Speaking to the members of the EP economic and monetary affairs committee, the prime minister and finance minister of Luxembourg, Jean-Claude Juncker, took stock of the results of the European Council on Wednesday. Juncker, who also chairs the Eurogroup, above all set out some of the key issues to be covered by the 13 (soon to be 15) finance ministers of the eurozone. He expects the pace of budgetary adjustments will be speeded up.
With rather mixed reactions to the results of the summit as a whole, Mr Juncker nonetheless praised the fact that economic and monetary union (EMU) and single currency had been placed among the EU's objectives (with the addition to the EU Treaty of an Article 3a stating that the Union establishes an economic and monetary union with the euro as its currency). This addition does not change the situation for the United Kingdom or for Denmark, that continue to enjoy exemption, but any other country which meets the criteria, like Sweden for example, must join. This is an obligation which should not be put to referendum, he agreed with Olle Schmidt (ALDE, Sweden). “No one asked for the Maastricht criteria to be reopened during the European Council in order to modernise them”, he said to the president of the EP committee, Pervenche Berès (PES, France), specifying that reflection on the inflation criterion should not mean we have to reflect upon all eurozone membership criteria.
Mr Juncker did not at all share the concerns expressed by Sophie in't Veld (ALDE, NL) or Kurt Joachim Lauk (EPP-ED, Germany), considering that exclusion of the free and undistorted competition concepts from the list of EU objectives “will not lead to change in policy” on such matters. Why do away with them when the constitutional treaty initially foresaw bringing them in as such? To make them into means, as the “the principle as an instrument is safeguarded”, he replied, saying it is for that that they appear in a protocol and will continue to be the subject of many other provisions in the treaties. Continuing to make them appear among the objectives would have meant that competition is the final goal, a goal in itself, when “it is obvious that it is an instrument in the hands of EU governments”.
Given the current sound economic situation of the eurozone, the budgetary efforts and the rate of reform in member states must be speeded up, Mr Juncker repeated. News on the employment market is good and unemployment rates continue to fall, but one must “not be satisfied” with the levels reached. Also, public finance improvements are on the right road but the rate of reduction of the public debt is “unsatisfactory”. Governments must therefore keep to the commitments signed up to by eurozone finance ministers during the informal Eurogroup meeting in Berlin. Such principles are simple: - the medium term objective (MTO) must be reached by 2010 at the latest, ensuring that an average 0.5% adjustment per year is reached, and using additional receipts from a good economic upswing to ensure more rapid improvements in public financing. Mr Juncker hopes to see such elements confirmed by French President Nicolas Sarkozy, who will be at the Eurogroup on 9 July, he said. “I heartily applaud Mr Sarkozy's initiative, which shows a heightened awareness of the fact that our budgetary policies are interrelated”, he said.
The debate on allocating additional receipts from growth would not exist in Italy if the debt were not at its high level. “Italy has a responsibility towards the eurozone”, explained Mr Juncker to Andrea Losco (ALDE, Italy). Coordination of economic policies is the responsibility of governments and a member state must be fully aware of the impact that its decisions may have on its neighbours. “Italy is not free to distribute the fruits of growth as it sees fit”, he pointed out, specifying that the share of incomings from unhoped-for cyclical upswings should be used to improve public financing.
During their next informal session in Porto on 14 and 15 September, the eurozone finance ministers will look at the way the euro is perceived by the general public, and will study the eurozone's representation outside the EU, he announced. In November, this will be followed by a debate on wage formation and distribution in Europe. The share of salaries in the overall GDP continues to fall, which, in itself, “is not very worrying”, but it does deserve a debate to try to explain this slide, he said. Answering questions put by Ieke van den Burg (PES, NL) on the growing misunderstanding of workers regarding the repeated calls for wage moderation, he admits that “people are losing patience”. It is better to explain why moderation is still necessary”, but the mistakes made by large company directors make such an explanation impossible. “Wage earners notice that they are being asked to accept wage moderation when other players in economic and social spheres unscrupulously accept unlimited earnings”, he said indignantly, stressing: “One cannot explain why it is that workers have to keep quiet and go to work when company heads go direct to the till (…) - it just can't go on!”. (ab)