A new vision for completing the Economic and Monetary Union (own initiative opinion) - Related Opinions
This own-initiative opinion will focus on the interface and inter-linkages between the European semester and Cohesion policy under the new Multiannual Financial Framework with a view to developing policy proposals to improve sustainable growth performance. With the Europe 2020 Strategy coming to an end, these proposals can contribute to the preparation of a new European strategy post-2020.
The EESC notes that the international role of the euro has not yet recovered to the pre-financial crisis level. Whereas the European Commission's proposed measures are welcome and deemed necessary by the EESC, they may not go far enough given the extent of the euro area's social and economic challenges. Social cohesion, economic upward convergence and the promotion of competitiveness and innovation should be the basis on which the euro area's economy gathers pace and supports a stronger international role for the euro.
The EESC is of the opinion that building economic resilience, an objective that underlies the recommendations of the European Commission on the economic policy of the euro area, is of the utmost importance for the euro area economies. However, the Committee would like to stress that the pursuit of economic resilience should go hand in hand with increased labour market resilience, that is, the capacity of labour markets to weather shocks with limited social costs.
The EESC considers the proposed European Investment Stabilisation Function (EISF) as a step towards closer euro area integration, and possibly an attempt to encourage non-euro Member States to join the single currency. However, the EESC is of the view that a well-crafted union-wide insurance scheme that acts as an automatic stabiliser amidst macroeconomic shocks would be more effective than the proposed EISF.
The EESC welcomes and endorses the rationale behind the establishment of the Reform Support Programme. However, the EESC believes that, in order to launch the programme successfully and obtain the expected benefits, better responses are needed to a number of still open questions.
The EESC appreciates the proposed roadmap for completing the European Economic and Monetary Union (EMU) but its support is not full and enthusiastic, since a number of social, political and economic issues, highlighted in our previous opinions, were not taken into consideration. The completion of the EMU requires first of all strong political commitment, efficient governance and better use of the available finances, in order to actually cope with both risk reduction and risk sharing among Member States. For these reasons the EESC underlines that the principles of responsibility and solidarity at EU level should go hand in hand.
This opinion is part of a wider package of four EESC opinions on the future of the European economy (Deepening of the Economic and Monetary Union and Euro area economic policy, Capital Markets Union and The future of EU finances). The package of opinions underscores the need for a common sense of purpose in the Union governance, which goes far beyond technical approaches and measures, and is first and foremost a matter of political will and a common perspective. Against this background 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.
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 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.