BRUSSELS—The European Commission's response to the economic crisis has focused too much on pushing government deficit cuts and not enough on policies to promote job creation and economic growth, a European commissioner said Wednesday.
In a rare public show of internal dissent over the commission's economic policies, Maria Damanaki, the commissioner for maritime affairs and fisheries, also said the European Union should consider restructuring the debt of the euro zone's weakest governments in exchange for accepting the drastic budget cuts and far-reaching economic reforms that Germany and France have sought as part of an overhaul of the bloc's economic policies.
That is potentially at odds with the commission's official position on restructuring: that any debt issued by euro-zone governments before 2013 will be repaid in full.
Ms. Damanaki, a Greek Socialist, isn't directly responsible for macroeconomic policy, but all 27 EU commissioners participate in debates over major policy decisions.
The remarks hint at broader dissent within the commission, the EU's executive arm, as it attempts to shape the debate on a package of economic reforms that the EU hopes will solve the euro-zone debt crisis and prevent future crises. EU leaders are aiming for a final deal on these reforms at their summit on March 24.
Ms. Damanaki, who took office at the beginning of 2010, said the commission's policies on job creation and economic growth have been inadequate.
"The commission tried to do its part," she said at a conference held by EU public-sector unions. "But the commission acted to restore stability and promote jobs in a very shy way."
"One could have aimed at a better balance between austerity and growth," she said.
Ms. Damanaki said that tough budget cuts could be made more palatable if banks, which are major holders of euro-zone sovereign debt, were ready to contribute to restructuring the debt. The EU's economics commissioner, Olli Rehn, has said that interest rates on the emergency loans arranged for Greece and Ireland should be lowered, but the commission has rejected requiring private-sector investors to accept losses as part of a restructuring.
"If, for instance, the banks were ready to accept their share of responsibility in the situation of restructuring of sovereign debt, fiscal consolidation could be construed in a totally more acceptable way," Ms. Damanaki said.
The Franco-German "competitiveness pact" seeks six significant economic reforms, including an end to wage indexation, higher pension-eligibility ages and more harmonized corporate-tax policies. Ms. Damanaki said the pact could be acceptable if the stronger euro-zone governments offered the possibility of debt relief to the weaker countries.
"Having the competitiveness pact only without the debt relief, I think is not an option," she said. "It's not fair."
Ms. Damanaki said that she and her allies in the commission were responsible for removing recommendations to cut the minimum wage and distinguish new labor contracts from old ones in the commission's Annual Growth Survey, its strategy for promoting economic growth this year released in January.
"This was already a small victory for all of us, but it was not enough," Ms. Damanaki said.
She also said there is new life in the commission behind discussions to tax the financial sector and use the funds for investments to encourage economic growth. "When I took office, this discussion was closed," she said. "Now it's open again."
Source: http://online.wsj.com
In a rare public show of internal dissent over the commission's economic policies, Maria Damanaki, the commissioner for maritime affairs and fisheries, also said the European Union should consider restructuring the debt of the euro zone's weakest governments in exchange for accepting the drastic budget cuts and far-reaching economic reforms that Germany and France have sought as part of an overhaul of the bloc's economic policies.
That is potentially at odds with the commission's official position on restructuring: that any debt issued by euro-zone governments before 2013 will be repaid in full.
Ms. Damanaki, a Greek Socialist, isn't directly responsible for macroeconomic policy, but all 27 EU commissioners participate in debates over major policy decisions.
The remarks hint at broader dissent within the commission, the EU's executive arm, as it attempts to shape the debate on a package of economic reforms that the EU hopes will solve the euro-zone debt crisis and prevent future crises. EU leaders are aiming for a final deal on these reforms at their summit on March 24.
Ms. Damanaki, who took office at the beginning of 2010, said the commission's policies on job creation and economic growth have been inadequate.
"The commission tried to do its part," she said at a conference held by EU public-sector unions. "But the commission acted to restore stability and promote jobs in a very shy way."
"One could have aimed at a better balance between austerity and growth," she said.
Ms. Damanaki said that tough budget cuts could be made more palatable if banks, which are major holders of euro-zone sovereign debt, were ready to contribute to restructuring the debt. The EU's economics commissioner, Olli Rehn, has said that interest rates on the emergency loans arranged for Greece and Ireland should be lowered, but the commission has rejected requiring private-sector investors to accept losses as part of a restructuring.
"If, for instance, the banks were ready to accept their share of responsibility in the situation of restructuring of sovereign debt, fiscal consolidation could be construed in a totally more acceptable way," Ms. Damanaki said.
The Franco-German "competitiveness pact" seeks six significant economic reforms, including an end to wage indexation, higher pension-eligibility ages and more harmonized corporate-tax policies. Ms. Damanaki said the pact could be acceptable if the stronger euro-zone governments offered the possibility of debt relief to the weaker countries.
"Having the competitiveness pact only without the debt relief, I think is not an option," she said. "It's not fair."
Ms. Damanaki said that she and her allies in the commission were responsible for removing recommendations to cut the minimum wage and distinguish new labor contracts from old ones in the commission's Annual Growth Survey, its strategy for promoting economic growth this year released in January.
"This was already a small victory for all of us, but it was not enough," Ms. Damanaki said.
She also said there is new life in the commission behind discussions to tax the financial sector and use the funds for investments to encourage economic growth. "When I took office, this discussion was closed," she said. "Now it's open again."
Source: http://online.wsj.com
No comments:
Post a Comment