Further measures at national and European level needed to counter the impact of future crises
The EU Member States must urgently work on a stable, prosperous and more resilient EMU: this was one of the main conclusions of a public debate on completing the Economic and Monetary Union (EMU), hosted by the European Economic and Social Committee (EESC) on 29 January 2018.
The economic outlook has become considerably more positive since last year, but we must realise this will not last for ever, said the EESC's ECO section president, Joost van Iersel, in his remarks. The current EU-wide economic recovery and increasing civic support for the Euro provided an excellent opportunity to undertake the necessary reforms and press ahead with the completion of EMU: this was the view voiced by guest speakers at the public debate.
Key steps and challenges ahead for the EMU
Opening the first round table, Massimo Suardi, deputy head of the Cabinet of the Commission vice-president, Valdis Dombrovskis, outlined the Commission's EMU Package and its underlying principles: unity, efficiency and democratic accountability. He pointed out that while certain instruments had had to be introduced on an intergovernmental basis at the height of the crisis, they currently needed to be made more efficient and have more democratic accountability under the EU legal framework.
Judging from the outcome of the latest Eurosummit in December 2017, Wouter Coussens, economic adviser to the European Council president, Donald Tusk, believed that European leaders were committed to the process of deepening the EMU and had already agreed to work as a matter of priority on the development of the European Stability Mechanism and the completion of the Banking Union. A roadmap for further debates had been scheduled for the coming 14 months.
Participants also discussed possibilities for bringing national economic policies into line with the requirements of a genuine Economic and Monetary Union. Luděk Niedermayer, MEP and vice-chair of the ECON Committee, said:
We must avoid mismatches between policies as they can lead to severe consequences for economies and citizens. It is therefore important to share ownership on EU decisions, which should be mutually agreed among all players.
What instruments should be used to address the remaining challenges?
Current challenges for the EU Member States and the lessons learned from tackling the past sovereign debt crisis showed a clear need to reform and deepen the EMU, agreed speakers and participants at the EESC event.
A lot has been done since 2008, but the EMU architecture remains incomplete and its governance unsatisfactory, said Bernard Snoy, president of the European League for Economic Cooperation (ELEC).
In particular, we need to work on the unfinished elements of the Banking Union and Capital Markets Union, build up macroeconomic stabilisation capacity by creating an enhanced budget for the euro area and a European Monetary Fund, strengthen euro area institutions and accountability, and persuade surplus countries to contribute to the re-convergence process.
Olivier Garnier, director general for Economics and International Relations at Banque de France, stressed:
Reforming the EMU means safeguarding against future crises. We need to act with a mixture of pragmatism, national responsibility and European ambition. It is more a question of urgency than a window of opportunity.
To illustrate this idea, Mr Garnier pointed to four accelerators that should be used at EU level in order to maximise the effects of domestic structural reforms: a common euro area macroeconomic strategy to deal with asymmetric shocks, a joint approach towards financing of investment and innovation at microeconomic level, a euro area budget to finance certain European public goods, and a more effective and accountable institutional framework giving the euro area a finance minister, a treasury and its own specific committee in the European Parliament.
Participants in the general discussion urged the Member States and the Commission to ensure the sustainability of future finances through swift completion of the Banking Union and Capital Markets Union. They also asked for revision and simplification of the fiscal rules before integrating the substance of the Treaty on Stability, Coordination and Governance into the EU legal framework. In addition, more attention needed to be paid to the impact of Brexit, the future of the EU budget and the political and social dimensions of the EMU.
Finally, the rapporteurs for the EESC opinion on the Commission's roadmap for completing EMU, Mihai Ivaşcu (Various Interests, Romania) and Stefano Palmieri (Workers, Italy), urged the Commission to take more of the EESC's recommendations on board and asked for further details on some of the proposed ideas, such as the position of European Minister of Economy and the completion of the European semester process with a social pillar. They also pointed to the essential need to strike the right balance between responsibility and solidarity in all future decisions on EMU.
The findings of the debate will feed into this EESC opinion, which will be put to the vote at the EESC plenary session in April 2018.