Brussels, 15/04/2008 (Agence Europe) - Why are Europeans not more proud of their most tangible and most symbolic statement of European integration, the euro? This paradox was a central issue in the European Economic and Social Committee (EESC) conference on the advantages and benefits of the single currency, in Brussels on Monday 14 and Tuesday 15 April. Noting a certain coolness among euro area citizens for the currency, speakers at the conference responded by giving a rather flattering report of the first 10 years of Economic and Monetary Union (EMU). On the level of job creation, consolidation of public finances, price stability, low interest rates and financial market integration, the euro has shown tangible benefits. The results in terms of GDP growth, productivity increases and structural reform have not, however, met expectations. Adjustment between euro area economies is still too slow, differences between member states (growth and inflation) remain, and representation abroad is still not enough. Winning the hearts of European citizens is certainly a challenge for the next decade of EMU, but the responses must be institutional and political (see, too, article below).
Improving the coordination of economic policies is the area where most work has to be done. It is up to member states to show willing. “Our ambitions are not up to the instruments at our disposal,” said Jean-Claude Juncker, expressing the hope, as he did recently (see EUROPE 9622), that the progress made within the Eurogroup of the last few years can be capitalised on. The Eurogroup is gradually becoming more influential and the joint visit of Messrs Juncker, Trichet and Almunia to China could be a first indication of the euro area's appearance on the world stage. The recent change of tone in the G7 declaration on exchange rates (see EUROPE 9642) was the result of European influence, Juncker, Luxembourg's Prime Minister and Finance Minster, said and he urged member states to reach agreement on single representation at the International Monetary Fund (IMF). These calls were echoed by Pervenche Berès, the chairwoman of the European Parliament economic and monetary affairs committee, who also noted that the euro had not fully exploited the potential for growth in the euro area. She said that the strengthening of the economic pillar would come through more concerted investment strategies among member states. The taxation issue would have to be sorted out and there was also some room for improvement in the dialogue with the European Central Bank (ECB).
To respond to future challenges (globalisation, ageing of the population, climate change), Economic and Monetary Affairs Commissioner Joaquin Almunia presented the three main thrusts of the forthcoming Commission communication on the 10 years of EMU, to be presented on 7 May: (a) the domestic agenda: there has to be a broadening of economic surveillance in the euro area and beyond the current budgetary analysis, to quickly identify and address risks of macro-economic imbalances, developments in competitiveness and risks linked to financial stability; fiscal surveillance itself must be deepened to ensure budgetary discipline prevails over the cycle; and structural reform must be continued; (b) the external dimension: the euro area must strengthen its macro-economic dialogue with the United States, Japan and China, and also increase its negotiating power in multilateral fora (better consolidation of positions while awaiting a single seat on international financial institutions); (c) governance of EMU: governments must show a clearer will for concerted policy action within the Eurogroup, which should take a more active role in encouraging structural reforms in member states. The dialogue between the Eurogroup and non-EMU member states should also be improved. (A.B.)