The Commission communication on Steps towards completing EMU can provide a great opportunity to launch a debate at political level and with civil society to draw up conclusive proposals which go further than the current ones. It would be more useful to draw up a proposal for the European Semester as part of a comprehensive agreement on economic governance that goes beyond the status quo, changing macroconditionality and strengthening the Interparliamentary Conference. Democratic legitimacy is not tackled seriously by any of the Commission's operational proposals. The tripartite social dialogue could contribute to this matter. On the basis of its own roadmap, the EESC is committed to putting forward, possibly with the Commission, a plan on stage two (Completing EMU 2017-2025) to discuss these issues in the Member States, beginning with the euro area countries.
As the recovery of Europe's economies remains sluggish and fragile and the level of investment remains low, it should be a matter of priority to deploy every possible means to achieve a robust and stable economy. The Committee therefore endorses the goals of the action plan i.e. to mobilise capital in Europe and channel it to all companies, infrastructure and long-term projects. The Committee has serious concerns, however, regarding the relevance and effectiveness of the capital markets union for SMEs. They must be able to choose the funding channels that suit them best. At the same time the EU's economic and financial stability should be one of the priorities of the capital markets union. There should thus be more simplification, transparency and comparability of financial instruments.
The EESC welcomes the proposals to establish a system of "simple, transparent and standardised" securitisation (STS securitisations), that should enable significant additional resources to be generated for bank funding. That is very important, for SMEs and households in particular. There should be clarity as to the risk involved and who bears that risk, taking account of the whole chain from the issuer to the investor. It is important now is that the mistakes of the past are not repeated. Small investors and consumers should not have access to securitisation due to the complexity and risk involved, the Committee calls for a formal prohibition to be explicitly included in the texts.
A genuine stabilisation of the economic and monetary union (EMU) can only succeed if the deficits in the EMU architecture are solved and to this end major reforms are undertaken. The longer the current austerity policy continues, that primarily looks at spending cuts without the addition of an effective investment plan and measures to enhance income through growth, social cohesion and solidarity, it will become increasingly clear that Europe's economic integration and prosperity is at risk from growing social inequalities. The EESC calls for greater "parliamentarisation" of the euro area, with a grand EP committee comprising all members of parliament from the euro area and from those countries wishing to join (26 Member States), combined with stronger coordination of members of parliament from the euro area on EMU issues (COSAC +).
The Economy for the Common Good model proposes the transition towards a "European Ethical Market" which will foster social innovation, boost the employment rate and benefit the environment, for example through using indicators of wellbeing and social development beyond the GDP such as the Common Good Product and the Common Good Balance Sheet. The EESC considers that the Economy for the Common Good model is conceived to be included both in the European and the domestic legal framework and demands from the European Commission, in the framework of the upcoming renewed CSR strategy, to make a qualitative step in order to reward (in terms of public procurement, access to external markets, tax advantages, etc.) those enterprises that can demonstrate higher ethical performance.
The EESC wants the conditions be created for an efficient, modern financial services sector with appropriate regulations, which grants access to capital providers by companies seeking investment, especially SMEs and high growth companies, and finds it of utmost importance to overcome the current fragmentation of the markets.
Since a Capital Markets Union (CMU) is to a significant extent a reality for large companies, the EESC stresses the need for measures that will also allow SMEs to benefit from it, for example through accepting simplified standardised criteria for registration on regulated markets, and providing a definition of an emerging growth and high growth company and devoting special attention to the needs of such companies on the capital market.
The EESC is of the opinion that persisting imbalances as well as the creation of trust and confidence across Europe require more effective and democratic economic governance, notably in the Eurozone. It has become clear that the current system of rules underpinning the EU, and particularly the euro area, has created confusion on the legal, institutional and democratic fronts. A new approach is therefore needed. With this in mind, the Committee presents its contribution to the new five presidents' report which will propose next steps on better economic governance to the European Council in June. The EESC contribution summarises the different stages and puts forward institutional proposals and preparatory initiatives regarding the completion of the political pillar of the Economic and Monetary Union.
The European economic governance rules, conceived in crisis, played an important role in fiscal consolidation and economic policy coordination, but the cost was high in terms of growth and employment. The quantitative easing measures now being embarked upon by the European Central Bank need to be matched by greater political initiatives by the Member States. In the review of the Multiannual Financial Framework in 2016, there is a need to back urgent structural reforms of common EU interest with some form of fiscal capacity. A reasonable deviation from the 3% deficit parameter should be considered as a temporary exception for a given number of years and not be automatically liable to sanctions. A lack of implementation of country-specific recommendations (CSRs) could be countered by real involvement of civil society and the social partners in drawing up CSRs.
The EESC welcomes the Investment Plan for Europe as a step in the right direction, which however faces serious questions about the Plan's size and timescale, the high degree of leverage expected and the potential flow of suitable projects. The Plan proposes that contributions to the European Fund for Strategic Investments (EFSI) from Member States will not be included in budget deficit calculations and this is to be welcomed, but it begs the question as to why ongoing strategic public infrastructure expenditures are not treated in the same way. Strategic public investment which underpins present and future economic development should be incentivised by a more benign European fiscal framework.