Reflection paper on the deepening of the Economic and monetary union
The common currency and its institutions provided a stabilising element in the global financial crisis. However, the EMU is incomplete, which hampers its ability to support monetary policy and national economic policies.
In a much more uncertain world it is important that Europeans commit to a common sense of purpose through further integration. The Committee urges the Commission and the European Council to take bold decisions before the end of this mandate to advance EU-wide governance.
Among the most important elements for stability is the upward convergence of the heterogeneous economies. This will require national politicians and social partners to accommodate a European dimension into their deliberations about economic and fiscal policies.
The process of the European Semester should involve the European Parliament, national parliaments, the social partners and civil society. The social dimension must be included on a par with the economic dimension.
The EESC recognises the failings in the governance of the financial sector and fully supports the steps to complete the Financial Union, including the Banking Union and the Capital Markets Union. Immediate solutions are required to tackle non-performing loans.
The Committee supports the creation of a framework by 2018 for the introduction of sovereign-bond backed securities. In the medium-long run a European safe asset would be necessary to reduce financial market volatility and ensure the stability of the Member States’ economies.
An own resource budget greater than 1% of GDP is called for to resource Member States in crisis and to maintain essential investment levels in the euro area. Access to such funds should be linked to progress on economic and social standards.
There is a need for fiscal policy capable of stimulating the euro area economy in times of downturn. The MIP should be at the forefront of macroeconomic imbalance prevention, with more emphasis on the adverse euro area impact of chronic balance of payments surpluses.
The Committee advocates the exploration of tools to improve economic governance in the EMU, for instance by creating a permanent Euro Finance Minister, while ensuring full democratic accountability. Bundling competences would enhance coherence of EMU policies.