The European Parliament's economics committee yesterday backed a set of laws which will strengthen the EU's powers over member states' budgets and debts as it attempts to prevent a future financial crisis.
The so-called "six-pack" of measures to boost economic governance will give the European Commission a much greater role in policing member states' finances as part of a package to strengthen the Stability and Growth Pact. The proposals were first put forward by the commission and the European Council.
In a meeting described in a statement by the parliament as "emotionally charged and tough to predict," MEPs from across the political spectrum clashed over the measures – which only just won approval.
If it is implemented the package would make sanctions against countries which break the rules of the pact stronger and more automatic – and penalties would only be removed if a majority of member states agree. The committee proposed a fine of 0.5 per cent of GDP for countries "caught fudging their accounts". Revenues from fines would be allocated to the new European Stability Mechanism.
Under the rules member states with a debt of 60 per cent of GDP would have to reduce it by an average of 5 per cent per year over three years. The committee strengthened the commission's proposals on tackling irresponsible spending but insisted that it take more account of good spending when assessing a country's reform efforts.
The committee also overruled the council's attempts to take greater control over examining and judging budgets, giving more powers instead to the commission. In some areas the council and commission will have equal authority.
Sharon Bowles MEP, who chairs the committee, commended the parliament's role in multilateral economic surveillance. She said that despite fundamental divisions between political parties, the package would be "crucial to enhancing accountability and transparency of national governments".
She continued: "I am pleased the importance of the single market made it into the proposals, but I think it is a shame the parliament was not more ambitious in the detail of adjusting the risk weighting on sovereign debt. However, as a principle, it is included as a possible macroeconomic tool. There is also demand for national statisticians and auditors to be independent of governments."
Bowles added that the proposals were not a comprehensive solution and the EU would have to look at ways to finance growth. "Likewise, dealing with Europe's undercapitalised banks, especially in France and Germany, will be key to the EU's recovery and solving the sovereign debt crisis."
The Alliance of Liberals and Democrats said the committee had substantially strengthened the package. In a joint statement MEPs Sylvie Goulard and Carl Haglund said: "The severity of the crisis and the evident economic interdependence within the eurozone should not leave space to recalcitrant member states to escape from engaging in more convergence and submitting themselves to stronger surveillance. That is why we have supported stricter budget rules and automatic sanctions launched under the authority of the commission instead of the council."
Group leader Guy Verhofstadt added: "Moreover, what was not part of the original package – the commission shall be entitled to intervene with all necessary means if the stability of the euro is at stake, to preserve our European project."
And the centre-right European People's Party, the largest group in the parliament, also welcomed the measures – describing them as an "important pillar for preventing future economic and financial crises". Diogo Feio MEP said a strong economic governance framework was essential as a way to avoid a future crisis. "As an example, I am very pleased to see the adoption of a rule establishing a rhythm of reduction of the debt in an average of 1/20 over a three year period," he said.
But MEPs from the Socialists and Democrats group rejected much of the package, insisting it "would lead Europe in the wrong direction". Spokesman Udo Bullmann said that although his party agreed that public debts and deficits should be reduced, the measures lacked an investment strategy "to get member states back on their feet and avoid a lost decade for growth and employment."
He continued: "The stability and growth pact, which governs budgetary discipline, works only with sticks but no carrots. A majority of conservatives and the liberals were not ready to support us in defending investments to boost growth and job creation." Bullmann criticised his political opponents for refusing to give member states enough "room for manoeuvre" to invest in key sectors such as transport, energy efficiency and education.
The European United Left/Nordic Green Left grouping went further, describing the measures as "anti-social" and complaining that the EU was "forcing citizens to pay the costs of the crisis, after having raised billions of euros to save the very banking system that caused it". The group also criticised the lack of investment plan and wants the Pact for the Euro – which it claimed would attack pensions systems, labour market reform and public services – to be replaced by a pact for human and environmental development, employment, social progress and against poverty.
The group's coordinator on the committee Jürgen Klute said: "We need alternative EU economic policy coordination, which requires solidarity and a different vision of economic governance" and called for the introduction of common eurobonds and a tax on financial transactions. His colleague Nikolaos Chountis added: "This governance will serve financial capital, certainly not people." The proposals will be discussed further today and negotiations with the commission and council will continue.
Source: http://www.publicserviceeurope.com
The so-called "six-pack" of measures to boost economic governance will give the European Commission a much greater role in policing member states' finances as part of a package to strengthen the Stability and Growth Pact. The proposals were first put forward by the commission and the European Council.
In a meeting described in a statement by the parliament as "emotionally charged and tough to predict," MEPs from across the political spectrum clashed over the measures – which only just won approval.
If it is implemented the package would make sanctions against countries which break the rules of the pact stronger and more automatic – and penalties would only be removed if a majority of member states agree. The committee proposed a fine of 0.5 per cent of GDP for countries "caught fudging their accounts". Revenues from fines would be allocated to the new European Stability Mechanism.
Under the rules member states with a debt of 60 per cent of GDP would have to reduce it by an average of 5 per cent per year over three years. The committee strengthened the commission's proposals on tackling irresponsible spending but insisted that it take more account of good spending when assessing a country's reform efforts.
The committee also overruled the council's attempts to take greater control over examining and judging budgets, giving more powers instead to the commission. In some areas the council and commission will have equal authority.
Sharon Bowles MEP, who chairs the committee, commended the parliament's role in multilateral economic surveillance. She said that despite fundamental divisions between political parties, the package would be "crucial to enhancing accountability and transparency of national governments".
She continued: "I am pleased the importance of the single market made it into the proposals, but I think it is a shame the parliament was not more ambitious in the detail of adjusting the risk weighting on sovereign debt. However, as a principle, it is included as a possible macroeconomic tool. There is also demand for national statisticians and auditors to be independent of governments."
Bowles added that the proposals were not a comprehensive solution and the EU would have to look at ways to finance growth. "Likewise, dealing with Europe's undercapitalised banks, especially in France and Germany, will be key to the EU's recovery and solving the sovereign debt crisis."
The Alliance of Liberals and Democrats said the committee had substantially strengthened the package. In a joint statement MEPs Sylvie Goulard and Carl Haglund said: "The severity of the crisis and the evident economic interdependence within the eurozone should not leave space to recalcitrant member states to escape from engaging in more convergence and submitting themselves to stronger surveillance. That is why we have supported stricter budget rules and automatic sanctions launched under the authority of the commission instead of the council."
Group leader Guy Verhofstadt added: "Moreover, what was not part of the original package – the commission shall be entitled to intervene with all necessary means if the stability of the euro is at stake, to preserve our European project."
And the centre-right European People's Party, the largest group in the parliament, also welcomed the measures – describing them as an "important pillar for preventing future economic and financial crises". Diogo Feio MEP said a strong economic governance framework was essential as a way to avoid a future crisis. "As an example, I am very pleased to see the adoption of a rule establishing a rhythm of reduction of the debt in an average of 1/20 over a three year period," he said.
But MEPs from the Socialists and Democrats group rejected much of the package, insisting it "would lead Europe in the wrong direction". Spokesman Udo Bullmann said that although his party agreed that public debts and deficits should be reduced, the measures lacked an investment strategy "to get member states back on their feet and avoid a lost decade for growth and employment."
He continued: "The stability and growth pact, which governs budgetary discipline, works only with sticks but no carrots. A majority of conservatives and the liberals were not ready to support us in defending investments to boost growth and job creation." Bullmann criticised his political opponents for refusing to give member states enough "room for manoeuvre" to invest in key sectors such as transport, energy efficiency and education.
The European United Left/Nordic Green Left grouping went further, describing the measures as "anti-social" and complaining that the EU was "forcing citizens to pay the costs of the crisis, after having raised billions of euros to save the very banking system that caused it". The group also criticised the lack of investment plan and wants the Pact for the Euro – which it claimed would attack pensions systems, labour market reform and public services – to be replaced by a pact for human and environmental development, employment, social progress and against poverty.
The group's coordinator on the committee Jürgen Klute said: "We need alternative EU economic policy coordination, which requires solidarity and a different vision of economic governance" and called for the introduction of common eurobonds and a tax on financial transactions. His colleague Nikolaos Chountis added: "This governance will serve financial capital, certainly not people." The proposals will be discussed further today and negotiations with the commission and council will continue.
Source: http://www.publicserviceeurope.com
No comments:
Post a Comment