The Eurozone and the Americas: Debt and Democracy

EESC member Carmelo Cedrone takes part in an international conference in the US

On 2-3 November 2015, a conference to discuss the relations between the Eurozone and the Americas was held at the University of Texas at Austin. The conference brought together representatives of several universities in Europe, North and South America, the European Parliament, the US Senate, etc. They addressed very interesting questions, in particular the problem of debtor-creditor relationships in the modern world, the Eurozone matters, its economic and political governance, etc. The EESC was represented by Carmelo Cedrone, vice-president of the ECO section. Here is a summary of the proposals that he put forward as regards the euro area governance:

  • the first step is to complete the EU internal market and implement all policies that are feasible under the current Treaty;
  • strengthen the growth plan (Juncker) by issuing Eurobonds, without increasing countries' debt, to finance small and medium-sized enterprises (SMEs), health infrastructure, education, research, the environment, urban regeneration, trans-European networks and, above all, innovation;
  • encourage long-term public investment by the Member States by means of common rules (golden rules) outside of the Stability Pact, along with suspension or dilution of austerity policies to close the productivity gap between countries;
  • create a mechanism through Union bonds that removes part of public debt from market speculation (for example, the part above 60%), to be held in a consolidated debt account or common European fund, but serviced by the individual Member States;
  • establish a common micro- and macro-economic (and monetary) policy, giving the ECB full authority to act, inter alia, as payer of last resort; also put in place a compensation mechanism, which closes the economic gap between the countries, and ultimately a shared budget for the euro area;
  • pool some of the key institutions of social policy, both to prevent dumping between countries and to take action on an employment support mechanism during periods of crisis, putting solidarity and cohesion back at the centre of European policies, as required by the Treaty, which have recently been trampled on; and
  • last but not least, the most important issue: political union to rebalance the decision-making process, give more prominence to the role of Parliament and achieve a more democratic EU – one of the most important outstanding issues – entrusting decisions to the MEPs from the euro area (or from countries that support the integration project) to prevent a situation where, without clear, democratic rules, decisions are taken for everyone by the country with the strongest economy.

Finally, the EU must equip itself with common decision-making tools and resources, enabling it to speak with one voice in international forums and to be a reliable partner – first and foremost of the continents of North and South America – with a view to safeguarding mutual interests within a constantly-evolving global strategic balance.