EU ZMK's Diary

“A bird does not sing because it has an answer.
It sings because it has a song.” ~Chinese proverb

On the 22th May (Tuesday) – just one day before the extraordinary European Summit about Investments, Growth and Jobs to be held on the 23th May (Wednesday) immediately followed by a dinner intented to discuss the situation in Greece – the European Parliament discussed openly the Council’s and the Commission’s statements. The answer to the question ‘Can Europe successfully overcome the financial and political crisis?’ mainly depends on the outcome of that summit and dinner. Since I had the honour to be present during that interesting debate I make an attempt to present the essence of the debate highlighting some elements I consider being important.

Comment: As I always do in similar cases, I never intend to present simple quotations; that isn’t my job. My intention is rather to capture the hidden/obvious messages behind the spoken words.

WAMMEN (Council, DK Minister for Europe) “Reaching the desired competitiveness is not possible without economic stability and fiscal discipline.”

Some consider that the contradiction between austerity and growth is in the centre of the upcoming extraordinary summit. I think this is a false distinction. Reaching the desired competitiveness is not possible without economic stability and fiscal discipline. The purpose of the meeting is agreeing on principles, how to put Europe back on the growth track. The Danish EU Presidency expects that this extraordinary summit will be a stepping stone before the ordinary European Council meeting in June 2012. All our efforts are focused on 3 key issues:

1. Mobilizing EU funds, especially for SMEs to boost (youth) employment.
2. Preparing a detailed external trade strategy.
3. Reducing debt/deficit.

(Comment: Mr BARROSO could not be present in that important debate due to the parallel G8 and NATO summits.)

REHN (Commission, vice-president) “Achieving sustainable growth is impossible with unsustainable debt. Therefore implementing structural reforms is not a possibility but a necessity.”

The EU reached a turning point in it’s history and the member states have to find out how to achieve growth based on stability. According to the so-called European semester, the Commission has already prepared it’s country-specific reports and it seems that member states are more willing to take action.

There is a need that Member States mandate the Commission to prepare a proposal against tax evasion and fraud (which is still blocked by 2 [AT, LU] Member States) and to negotiate as many free trade agreements with key global partners as possible. The promotion of public and private funding is also inevitable. There are potentials in green growth and in renewable energy sources. Another step forward could be the introduction of a new financial transaction tax. At the same time, particular accent should be given to the implementation of existing proposals such as the Single Market Act or the Service Directive.

Unemployment is the most demanding challenge of Europe today. The (youth) unemployment rate is at an intolerable level. As regards the long term perspectives of the Economic and Monetary Union, there will be a roadmap on the table aiming at debt mutualisation (Eurobonds).
Europe will stay with Greece during it’s journey of reforms. Since Greece has been lived over its limits for a long time there is no reason to wait, no time to lose. The Commission hopes that after the next elections, Greece will be committed to make the necessary reforms and to create an efficient and fair tax system.

WORTMANN-KOOL (EPP) “Sometimes financial responsibility needs unpopular measures which are painful in the short term but in the long term, they can create more money.”

We attach great importance to SMEs since they can be the solid foundation of sustainable growth and they can create more jobs. Sometimes financial responsibility needs unpopular measures which are painful in the short term but in the long term, they can create more money. Based on the agreed Six-Pack and the Stability and Growth Pact, the Commission shall carefully analyze where have been already taken efficient measures and where is more to be done.

Although Monsieur François Hollande expressed his vision, he did present neither specific reforms nor any message about his thoughts on internal market. In our opinion, legislation concerning data protection and professional qualifications are very important but their transposition is far too slowly. European entrepreneurs need less bureaucracy and more money spent for Research & Development and infrastructure.

SWOBODA (S&D) „ Die staatlichen Investitionen können Inflation generieren. Aber die schlimmste Inflation ist die Arbeitslosigkeit.“

Solidarität ist unser Stichwort. Ich wundere mich darüber dass die Europäische Staaten wirklich der Mut haben die Arbeitslosigkeit zu bekämpfen. Das Investitionsniveau ist zu niedrig, wir müssen auch die Privatinvestitionen ermutigen. Letztendlich müssen wir mit der ineffizienten Austeritätspolitik aufheben. Das Wachstum gefährdet nicht die Budgetdisziplin. In der Gegenteil: Wachstum und Budgetdisziplin gehen zusammen.

Wir wissen genau dass Griechenland in einer sehr schwierigen Situation ist. Das Land wird für sich entscheiden: entweder tritt es aus der Eurozone aus oder führt das Land die Notwendige Reformen eing. Das Land braucht aber Erleichterung, um diese Ziele erreichen zu können. Die staatlichen Investitionen können Inflation generieren. Aber die schlimmste Inflation ist die Arbeitslosigkeit.

VERHOFSTADT (ALDE) „Obama is waiting what we are waiting for.”

This summit will be the 18th special summit since December 2008 when the crisis has been started. And the European leaders tackled every time the ‘real issues’ and every summit intended to make ‘the final decisions’. And now, just one country, Greece which represents only 2% of the EU GDP may jeopardize the function of the whole Union.

Therefore we are talking neither about a financial nor about an economic but about a political crisis.

The situation can reach an unseen magnitude: the eurocrisis became even an agenda point on the NATO Summit and all other NATO countries’ fingers are pointing at Europe. The European leaders did not make the right decisions in the right time. What we need is

1.) real economic and fiscal union,
2.) mutualisation of debts and
3.) a real growth package to boost the EIB, the structural funds and eurobonds.

If the Commission was not afraid to use the right of initiative, even Merkel could not resist the need for improving the Dept Redemption Fund. We do not need temporary but permanent solutions and we do not need millions but billions of euro in the growth package.

HARMS (Les Verts) „Griechenland braucht solche Methoden die nicht nur die Problemen von Morgen sondern auch die Forderungen der weiteren Zukunft lösen können.“

Der Ton Überrascht mich mit dem hier über Griechenland gesprochen wurde und morgen werden die Saat- und Regierungschefs einen anderen Ton benutzen. Unserer Meinung nach die 2 große Problemen sind einerseits die umfassende, tiefe, globale Finanzkrise und anderseits, dass das Griechenland-IWF Abkommen über die Austerität einfach nicht machbar ist.

Die Länder und die Leute wissen genau, worum geht es der EU-Gipfel. Warum sprechen aber die Politiker nicht offen? Warum stellen sie es nicht ganz klar fest: die echte Frage ist, ob Griechenland in der Eurozone bleiben kann.

Wir glauben dass Griechenland in der Eurozone bleiben soll. Es ist besser nicht nur für Griechenland sondern auch für ganz Europa. Griechenland braucht solche Methoden die nicht nur die Problemen von Morgen sondernd auch die Forderungen der weiteren Zukunft lösen können. Und solche Lösungen sind die Energie- und Ressource-effiziente Investitionen. Ich frage die Kommission: wo sind diese Initiativen?

CALLANAN (ECR) “Instead of the better regulation approach we would rather need a deregulation plan.”

There has been organized not only 18 but 22 summits for the last 2,5 years and it wasn’t the only thing where Mr. Verhofstadt is wrong. However all of them failed since they did not tackle the real problem. In spite of the S & D group’s opinion, Europe does not need more but even less State intervention. I share Margaret Thatcher’s views who said: The real problem with socialists is that they can run out of everybody’s money. There are problems with Europe’s social security legislation which is unable to protect the workers from unemployment. The real effect of the working time directive is that people are not willing to work. The Europeans are the most protected workers but they have no workplaces. What shall we do?

Instead of the better regulation approach we would rather need a deregulation plan. May I refer to the example of 12 Head of States who underlined in their joint letter the need for a free trade zone. Unfortunately, Mr. Barroso and Mr. Van Rompuy failed to listen to them. Since the so-called Lisbon strategy failed, the Commission should promote a pro-competition initiative. Instead of another dinner/summit, we need real action. In the upcoming 7 years budget, we have to avoid to increase state investments. In other words: do not throw a good euro after a bad euro.

FARAGE (EFD) “We must break up the eurozone.”

Mr. Barroso and Mr. Van Rompuy try to force their failed idea: the European United States. The euro is a common economic suicide. We heard already before that the euro will bring us creativity, more jobs and growth and instead of that we only had to pay the bill. There is no doubt, a humanitarian catastrophe has begun, some children do not get enough food in Greece, where tensions are growing.

But there is still hope since we can put this terrible mistake right. We must break up the euro. Greece has to readopt the drachma. Yes, we all know all economic consequences of that but on the other hand, it can give back Greek people the creativity, they can make products. Let’s give Greece a chance.

ZIMMER (GUE/NGL) „Wirtschaft sollte nicht sich selbst dienen, sondern die Leute.“

Die Kommission und der Rat hüten uns unmenschlich Rezepten. Die echte Katastrophe ist die schlimme soziale Leitung. Das vorgeschlagene Sparprogram für Griechenland, Spanien, Italien ist ein Gift. Die Bekämpfung der Armut sollte die oberste Priorität sein. Wirtschaft sollte nicht sich selbst dienen, sondern die Leute.

Comment: Following the debate, I would like to put particular accent on the following opinions from individual MEPs without naming them, except the High Commissioners:

EPP:

„Wir müssen die folgende Märchen endlich vergessen und die Realität erkennen: ‚Sparpolitik ist Eiskalt.‘ Wir brauchen die Schulden sinken damit die zukünftige Generationen die wichtige Entscheidungen treffen können. ‚Eurobonden werden die Lösung sein“. Man kann die Schulden nicht mit noch mehr Schulden bekämpfen.“
« Malheureusement, après l’inauguration de M. Van Rompuy, le Parlement Européen n’a plus direct relations avec des chefs d’État. On a besoin d’un audit indépendent mené par la Cour des Comptes Européenne en collaboration avec des cour des comptes nationales. Le but est la restauration de la competitivité du continent européen. Chaque État soit payer sa propre dette. Pour rédéfinir l’Europe, on aura besoin d’un Congrès européen avec la participation des États membres, des parlements nationaux, des governements et de la Commission. »
”The first step is fiscal consolidation and Eurobonds might come only afterwards.”
“We need more Europe than ever. We need values. We do not turn our back to Greece.”
“The theoretic German model won’t work in Greece.”
“The most important task is: making SME-friendly rules.”
“Budgetary discipline does not ruin growth.”

S&D

“There is a need for a European Marshall plan. The possibility of transfer of credits must be possible in order to set up an effective, real firewall against dept.”
« L’exit de la Grèce de la zone d’euro ne va rien résoudre. Notre union se base sur la diversité. Il n’y a pas seulement une seule modelle allemande. On a besoind d’une stratégie de croissance. Et l’Europe n’a rien fait pour aider la Grèce quand elle a négotié avec la Suisse. »
„Der Anteil des öffentlichen Eigentums in Europa ist unter 1%. Heute sind die Investitionen so wichtig. Früher hat Mario MONTI auch darüber geschrieben aber heute zitiert man seine Sätze nicht mehr. Warum nicht? Man darf nicht bergauf bremsen.”
“What a pity that this Summit did not take place last year. We need a careful analysis, what happened so far and the right decision in the right time is inevitable. I do not want to discuss the same issue this time next later.”
“Extraordinary summits became ordinary. Without specific measures, it is unlikely that a solution will come out.”
“Plan ‘A’ is not working. Where is plan ‘B’? Obama managed to reach a balanced deficit. Cameron, Merkel, Sarkozy failed to do so. Let’s give a chance to Hollande.”
« Le Conseil a l’occasion de changer l’orientation de l’Europe

ALDE

“Since the marathon of austerity did not achieve growth, Europe must guarantee the regulatory framework so that entrepreneurs could make their own profit.”
„Leider bezahlen wir noch immer die Zinsen der Staatenschulden, deswegen brauchen wir die Konsolidierung der öffentlichen Wirtschaft. Das Finanzsteuer kann das Wachstum helfen.“

Les Verts

« L’opportunité unique est devant l’Europe : le temps est venu pour investir à l’efficatié énérgetique. »
„Es gibt eine wirtschaftliche, politische, europäische Tragödie in Griechenland. Das Land braucht einen grünen Investitionspakt. Luxemburg und Österreich dürfen ihres Veto über die Steuerharmonisierung aufheben.“

ECR

“Mr. Verhofstadt tries to sell to the people the idea of the financial union but the people do not buy it. People are fed up with the never ending crisis and they voted either in France or in Greece for strong national leaders. The solution is: let the debt management in the hands of the states.”

EFD

“Greece lost it’s political center. The question is still open whether Greece will be a Weimar Republic or a European Cuba. Since Greek voters failed to understand the importance of the situation, I urge to launch a campaign in favor of the euro.”
“The single currency throws away investments.”

GUE/NGL

“People rejected the failed austerity policy. I hope that during the referendum in Ireland, the people will reject the Growth and Stability Pact, as well.”

“Euro means different things for different people.”

NI

“Euro is part of the problem. More debt isn’t the right answer.”
BARNIER (Commission) « Les banques doivent travailler pour l’économie réelle. »

« La crise elle-même est paradoxale. Elle porte colère, depression mais aussi la chance. La Commission a déjà proposée ses plans pour la croissance depuis quelques semaines. Il s’agit d’une projet bande qui contient à peu près 40 propositions qui sont sur la table, y compris le brevet européen, la signature éléctronique et la révision de la directive sur les qualifications professionelles. La Commission propose aussi un livre d’épairgne européen.

La Commission veut suivre une nouvelle aproche de la governance du marché public avec tolérence zéro. La Commission n’a pas de mémoire brève : les banques ont été irresponsable. La caricature de le libéralisme ne marche pas : les banques doivent travailler pour l’économie réelle.

ANDOR (Commission) “The Commission intends to take on board all expressed opinions except one: we cannot accept the deregulation of the social protection.”

The Commission made a number of initiatives to reinforce the social dimension of the common market. But there are many things to do. The biggest drama for the time being is the youth unemployment. The relocation of structural funds may help as it was the case not only in Greece but also in Romania where we succeeded in speeding up the access to these funds. However, those successes aren’t efficient without macroeconomic growth.

The Commission intends to take on board all expressed opinions except one: we cannot accept the deregulation of the social protection.

REHN (Commission, vice-president) “The stimulation of public and private investments may be the fuel of growth. La croissance est une priorité absolue mais on n’accepte pas n’importe quelle mesures. On n’accepte pas l’accumulation des dettes.”

Following this substantive debate, I can confirm that the Commission shares the Parliament’s views on the urgency of sustainable growth and job creation, fiscal consolidation. The stimulation of public and private investments may be the fuel of growth.

We hope that the summit will reaffirm the commitment to the integrity of the eurozone. There are good examples: DK and NL in the 80s, FI and SE in the 90s, DE in 00s and most recently IE.

La qualité est essentielle. La croissance est une priorité absolue mais on n’accepte pas n’importe quelle mesures. On n’accepte pas l’accumulation des dettes.

WAMMEN (Council, DK Minister for Europe) “Growth creates more jobs, but economic stability is a precondition.”

Growth and job creation go together beyond doubts. National budgets have to focus on stability, growth and structural reforms without high deficit. A comprehensive, holistic approach is the key issue. Member States have to share the same commitments. Growth creates more jobs, but economic stability is a precondition. Energy efficiency can be a possible way out.

PS: For those who are interested in the deeper connections: parallel with the summit, the EP discussed and voted on the report on a common system for taxing financial taxation on the 23th May.

I remain at your disposal.

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Related earlier EU Hemicycle updates:

14. Die Zukunft von Europa – L’avenir de l’Europe – The Future of Europe

2. Thoughts on the possible future accession of Iceland to the EU

1. National Minorities and the Long Term Future of the European Integration

Zoltán MASSAY-KOSUBEK

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