Download Future of Europe Deepening the Economic and Monetary Union

PLACEHOLDER
Future of Europe
Deepening the
Economic and
Monetary Union
The publication of the European Com-
rency and foster economic growth.
mission reflection paper on the deep-
Several proposals have been put on the
ening of the Economic and Monetary
table over the years, the latest being
Union (EMU) is an opportunity to pro-
the ‘Five Presidents’ Report’ Complet-
pose bold and innovative solutions
ing Europe’s Economic and Monetary
that will strengthen the common cur-
Union, which proposed a two-stage
rency, and build the necessary public
process. The Commission undertook
support and political commitment to
actions to implement the ‘first stage’
move forward.
measures, such as strengthened external euro area representation and a
Moving urgently from crisis response to structural reforms
‘revamped’ European Semester, while
The push for deepening the EMU
a White Paper on more far-reaching
needs to come from all sides. Based
second stage measures was expected
on the inter-institutional Five Presi-
It has been almost a decade since
in spring 2017. However, as the reflec-
dents’ Report, the Presidents should
the economic and financial crisis
tion process on the future of the EU27
compel their respective institutions to
exposed structural shortcomings
has taken centre stage the EMU White
move forward on the first stage pro-
in the setup of the Economic and
Paper has been put on hold. Instead,
posals and push for the drafting of
Monetary Union. Intergovernmental
a ‘reflection paper on the deepening
the second stage White Paper. The Eu-
solutions to the crisis such as the Euro-
of the EMU’ has been planned, which
ropean Parliament and the European
pean Financial Stability Facility and the
might not include the concrete steps
Commission should urge Member
European Stability Mechanism offered
foreseen in the EMU White Paper.
States to take concrete action based
initial assistance. Proposals to further
on their respective proposals for the
strengthen the EMU led notably to
The hesitation of the European Un-
deepening of the EMU. The aim must
the European Semester cycle of policy
ion when it comes to taking con-
be to take joint steps towards a
coordination, the ‘six-pack’ legisla-
crete steps forward on EMU reform
deeper Economic and Monetary Un-
tion strengthening the Stability and
has to end. The Economic and Mon-
ion. This means that all Member States
Growth Pact, the Fiscal Compact on
etary Union, as a core pillar of the
need to be on board going forward, as
balanced national budgets, as well as
European Union, is in urgent need of
the goal is for all Member States to
the ‘two-pack’ legislation strengthen-
strengthening. The current approach,
eventually join the Eurozone. A joint
ing the monitoring of Member States’
with limited means of enforcement,
Franco-German proposal after the
fiscal policies. Furthermore, concrete
is insufficient in addressing the differ-
French and German elections could
steps were taken towards a Banking
ences between Member States’ levels
provide a new impetus and establish
Union with the implementation of a
of economic development or the dis-
a concrete basis for discussions in
Single Supervisory Mechanism and
crepancy between the common mon-
the Council, also taking into account
the Single Resolution Mechanism, and
etary policy and national policies. Fur-
recent proposals for further integra-
discussions on a European Deposit In-
thermore, the integration of the crisis
tion from Spain, Italy, and others. The
surance Scheme are underway.
response mechanisms in the EU legal
fear of a ‘multi-speed Europe’, held by
framework is long overdue, and there
some non-Eurozone Member States,
It is a widely shared view that the
is a clear tension between the current
is unwarranted if they engage with the
Economic
Union
opaque system of decision-making
process of deepening the EMU in or-
needs further structural improve-
and democratic and accountable deci-
der to include their vision in the next
ments to guarantee a stable cur-
sion-making.
steps.
and
Monetary
Building blocks to deepen the Economic and Monetary Union
should be co-legislator on all EMU
sources as a source of financing the
issues. To this end, the European Par-
Eurozone budget.
liament Committee on Economic and
A legitimate and accountable Euro-
Monetary Affairs should be strength-
This fiscal capacity could take the form
pean Economic Governance needs
ened with special information rights
of a European Unemployment Ben-
a clearer and more democratic de-
and
The
efits Scheme as a stabilisation and
cision-making structure. To this end,
complete European Parliament should
solidarity mechanism. A genuine Eu-
intergovernmental
solutions
be fully involved in the development
ropean Unemployment Insurance Sys-
need to be fully integrated into the EU
and monitoring of economic and fis-
tem with substantial harmonisation
legal framework, and subject to scru-
cal policies and the appointment and
could introduce a stabilisation func-
tiny by the European Parliament.
dismissal of the Eurozone Finance
tion as well as a direct link between
Minister, as the idea is that all Mem-
the EU and citizens and support the
ber States will eventually join the
development of the European Pillar of
euro. The role of national parliaments
Social Rights.
crisis
scrutiny
responsibilities.
can be strengthened to allow them a
greater role in scrutinizing the deci-
Eurobonds could provide another
sions of their national governments
form of risk sharing. The common
on EMU issues.
issuance of debt in the form of Eurobonds could increase financial and
A fiscal capacity should be created
monetary stability and reduce conta-
to provide a stabilisation function
gion between sovereign states and the
for the Eurozone. An automatic sta-
banking system. Their design should
Clearer decision-making also war-
biliser or ‘Eurozone budget’ could
balance stabilisation and moral haz-
rants the appointment of a Euro-
mitigate asymmetric macro-economic
ard by enforcing budgetary discipline
zone Finance Minister with stronger
shocks in the Eurozone. It could fur-
through better common economic
executive powers, who would as-
ther promote much-needed structural
governance.
sume the functions of Eurogroup chair
reforms, increase economic conver-
and Commission Vice President for
gence, and offer room for Member
The Economic and Monetary Union
Economic and Monetary Affairs, be
States to invest during recessions. A
should become more social and fo-
the internal and external representa-
Eurozone budget could be realised in
cus on upward convergence. The
tive of the Eurozone, supervise Mem-
different forms, as shown by recent
social dimension should be streamed
ber States’ budget policies, coordinate
proposals from Member States, aca-
into current processes such as the Eu-
economic and fiscal policies, manage a
demics and institutions. Any form of
ropean Semester as soon as possible.
new Eurozone budget, and handle cri-
fiscal capacity should be subject to
Furthermore, a binding convergence
sis situations.
the control of the European Parlia-
code as proposed by the European
ment and be managed by the Euro-
Parliament
To strengthen democratic account-
zone Finance Minister. Furthermore,
whose converging targets should also
ability, the European Parliament
priority should be given to own re-
focus on labour markets, labour mobil-
should
To see this and other European Movement International policies, please take a look at our website:
www.europeanmovement.eu/policies
be
introduced,
ity, taxation, social cohesion and other
ments towards a sustainable and just
social aspects. Moreover, a ‘silver rule’
tax system. The free movement of
for public social investment should
people, products, services and capital
be introduced to incentivise public in-
is another important European value
vestment by the Member States and
that should underlie its economic poli-
remove limitations in the current gov-
cies.
The European Movement
seeks to provide a platform to
ernance framework for specific areas
ing a governance structure on social
Moving forward
The European Movement Interna-
stakeholders in the development
issues into EMU governance would
tional welcomes a Europe-wide de-
of European solutions to our com-
support and guide Eurozone states on
bate on the future of Europe and the
mon challenges. We offer thought
the basis of common agreed stand-
EMU where all stakeholders can share
leadership on the issues that af-
ards, while leaving Member States
their views and citizens have the op-
fect Europe and we give the op-
room for decisions on their specific
portunity to actively engage in the
portunity to representatives from
social policies.
discussions. If coupled with concrete
European associations, political
venues for dialogue and participation,
parties, enterprises, trade unions,
The EMU should support a Euro-
the reflection paper on the deepening
NGOs and other stakeholders,
pean economy that is modern, sus-
of the EMU might achieve a real de-
through our 39 National Councils
tainable, socially just and globally
bate on the steps forward. At the same
and 34 International Associations,
competitive. It should encourage a
time, it cannot be an excuse to post-
to work together, towards improv-
circular economy and responsible con-
pone much-needed reform. Work on
ing the way that Europe works.
sumption. Structural improvements to
existing proposals and the necessary
the EMU should not only make the Eu-
public and political support should
rozone more robust in the event of fu-
go ahead as foreseen, and an expert
ture shocks, but also support related
group to write the White Paper on sec-
policies such as the European Pillar
ond-stage EMU reform as foreseen in
for Social Rights, the implementation
the Five Presidents’ Report should be
of the Paris Agreement, and develop-
convened as soon as possible.
of social investment with substantial
economic and social returns. Integrat-
European Movement International
www.europeanmovement.eu
Rue Marie-Thérèse 21
B-1000 Brussels
T +32 (0)2 508 30-88
[email protected]
@EMInternational
encourage and facilitate the active participation of citizens and