Dijous vinent està previst que al Parlament Europeu (en minisessió plenària, a Brussel·les), votem diversos informes relatius a la Governança econòmica. Són els següents:
- Prevención y corrección de los desequilibrios macroeconómicos, FERREIRA, A7-0183/2011
- Aplicación del procedimiento de déficit excesivo, FEIO, A7-0179/2011
- Requisitos aplicables a los marcos presupuestarios de los Estados miembros, FORD, A7-0184/2011
- Supervisión presupuestaria en la zona del euro, GOULARD, A7-0180/2011
- Supervisión de las situaciones presupuestarias y supervisión y coordinación de las políticas económicas, WOORTMAN-KOOL, A7-0178/2011
- Medidas de ejecución destinadas a corregir los desequilibrios macroeconómicos excesivos en la zona del euro, HAGLAND, A7-0182/2011
Enceto amb aquest d’avui un seguit d’apunts en relació a l’anomenat Pacte de l’Euro en què miraré d’explicar la qüestió des de la perspectiva que el Grup Verds/ALE està aportant al tema. Es tracta d’una recopilació de documents d’anàlisi i de posicionament. Aquest d’avui, per exemple, l’han fet els nostres col·legues del Grup responsables dels afers econòmics. Durant aquesta setmana n’aniré penjant d’altres de complementaris. (Segueix…)
Economic Governance in the European Union
The European Union is facing challenges to provide to stability in their member countries. In May 2, 2010, Eurozone members and the IMF rescued Greece’s economy with 110bn-euro three-year bail-out package. The Portuguese Rescue Package of May 3, 2011 was also an ambitious programme of reforms that, in contrast with the Greek Rescue Package, gives a fair amount of discretion as to how it can be implemented. The Irish bail-out was also characterized but strong measures to reduce the public expenditure in social services. Italy and Spain also are in precarious situation: public debt and deficit plus financial and baking crisis seem the common denominator. Now, the Eurozone doesn’t reach an agreement on how to aboard the Greek situation and the possibility of restructuration or sovereign default of the Greek public debt.
Difficulties of the crisis:
The main causes of the financial and sovereign debt crisis were fiscal profligacy, weakness of the banking system, and low competitiveness and productivity. The main effects have been a sharp increase in primary deficits and public debt, an increase in sovereign spreads, high financial volatility, and low liquidity in capital markets.
Why is difficult to handle this crisis? The main reason why it has been so difficult to come to terms with these problems is that we are not just dealing with one crisis, but with three crises at the same time. We have, first, the kind of fiscal crisis that we see in countries like Greece and Portugal. We have, next, the kind of banking crisis that we see in countries like Ireland or Spain, where local banks have gone on lending sprees and nourished real-estate bubbles and, when the bubbles burst, their solvency was impaired. We have, finally, the kind of latent banking crisis that we see in countries like Germany or France where banks with very fragile balance sheets have large exposures to sovereign debt from Southern Europe and/or to bank debt from Ireland and Spain. These three crises are entangled with each other, and it is difficult to disentangle them. (EUI report on the Euro Crisis)
Under these financial crises, we find the economic and resource crisis that are endemic to the current system. But, what is the EU doing after the bail-outs?
The Commission main interest is to create all the necessary measures to avoid any disturbance of the economy, seems that the exclusive goal that it has is to veil for the free movement of capital within the union. The ECB plays his role and increase the interest rate of the Euro, when many countries would need a low interest rate to push their economies. In general, seems that the EU institutions are much worried about the movement of capital and the financial markets than about unemployment and recession.
Until now, the macro financial imbalances have been largely ignored in the framework of the current Growth and Stability Pact which solely focuses on public deficits and public debt ratios. However, the current situation has been pushing the European Council to take different economic measures and strength the economic governance, but which kind of economic governance?
The last European Council of the 24/25th of March 2011 the Council has approved a set of 5 instruments for the economic policy:
- The European Semester: Europe 2020, fiscal consolidation and structural reform: multi-annual consolidation plans, with specific deficit, revenue and expenditure targets, fiscal policies, etc
- Strengthening governance: Package of six legislative proposals on economic governance to be adopted by the European Parliament in June 2011.
- Euro-plus pact: intergovernmental measures to achieve a higher degree of convergence reinforcing the “social market economy”
- Restoring the health of the banking sector: banks stress test and considering the introduction of a global financial transaction tax.
- strengthening the stability mechanisms of the euro area: Introduction of a new treaty within the Eurozone called “European Stability Mechanism” that will be an intergovernmental organization under public international law to mobilise funding and provide financial assistance to the Euro members, in cooperation with the IMF.
In all the measures the “austerity side” has been the priority and the common denominator.
The Pact for the Euro
At the end of last March the head of states or Governments of the Eurozone plus six other countries (Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania) agreed in a set of measures to aboard the crisis and the public debt in Europe. They established a set of economic measures known as the “Euro-plus Pact”.
This is an intergovernmental agreement to strength the economic pillar of the monetary union. It is a set of recommendations and measures that fall under national competence and are crucial for the economic governance. In other words, are actions that have to be taken by the Member states, a policy mix that takes into account their specific challenges.
The pact is a set of measures that are subject to the control and recommendations of the European Commission, who acts as the principal supervisor and evaluator of the “Euro-plus Pact” development and application. The main goals of the pact are concretely:
- fostering competitiveness
- fostering employment
- contributing to the sustainability of public finances
- reinforcing financial stability
The first pillar includes points such us the revision of wage setting (eliminate indexation mechanisms and reduce bargaining power of unions) and reduce the wages for public servants, in order to guarantee the “competitiveness with the private sector”. In other words, the pact is against European workers and against the European economy, given the fact that low salaries mean also low demand and less economic activities. Those measures are neither beneficial for small and medium firms; the reduction of public expenditure will just lead to recession of our economic. We must say that under competitiveness there are no measures regarding the imperfection of the markets (concentration of market power, transparency and information or limitation of the monopolistic power).
The second pillar, it is all about life-long learning and flexicurity, well not only. Following the tradition of the EU policies, first they are trying to implement the flexibility and then we will see. In general this measures introduce a more regresive fiscal system, increase the inequalities and the poverty in our society.
The third pillar it is focus on the re-estructuration of the pension system in Europe, meaning the privatization of system and the increment of the retirement age. Of course it stresses the necesity of implement fiscal discipline and give the Commission the mission to ensure the EU rules of the Stability and Growth Pact and future regulations.
The Commission’s legislative package released last September has the aim of “strengthening surveillance of economic policies and ensuring effective compliance with fiscal consolidation in a one hand, as well as taking proper account of macro financial imbalances such as the levels of private debt on the other hand”.
The last pillar on reinforcing financial stability is about the coordination of the fiscal policy. Although it seems a nice willing, the creation of the European Stability Mechanism will conditionate any action in this direction.
In conclusion, the Pact for the Euro is a fallacy to build a neoliberal Europe, where measures are taken in favour of the banks and the big corporations.
Foto: Durao Barroso i Rehn, durant una roda de premsa. Font: AP