17/11/2011 Are we finally moving towards economic governance at EU level?

It has been on the agenda for a long time at the European Parliament. Economic governance, of the Eurozone of course but also of the entire European Union, is finally being put forward in a proposal that the European Commission has promised to present before November 23rd. All well and good but MEPs think they can do better.

Yesterday morning in Strasbourg, MEPs welcomed an important debate on economic governance. Going before the Parliament were three presidents – José Manuel Barroso (President of the European Commission), Herman Van Rompuy (President of the European Council) and Jean-Claude Juncker (President of the Eurogroup).

Towards a new treaty ?

The European Commission seemed to once again be tackling the issue of economic governance in the Union at the plenary debate on Wednesday November 16th. The Commission President, José Manuel Barroso announced that concrete proposals would be presented on November 23rd. Herman Van Rompuy presented the conclusions of the last Council (October 26th) to MEPs who did not appear satisfied with the measures decided by the heads of state and government.

"The Franco-German method cannot be sustainable. We need a global approach led by the Commission. We need economic and fiscal union," stated Guy Verhofstadt, ALDE President.

For the Commission President, "stronger economic governance is now a question of good sense" as the crisis has highlighted the interdependence of Member States. This interdependence requires Europe to move towards more integration, i.e. abandon the intergovernmental method that has until now been favoured over the community method.  "The euro is part of the EU ! It should therefore be dealt with using the community approach," explained Mr. Barroso.

This approach could justify a treaty modification or even a change of treaty. This is a step the Commission President is ready to take "if it really strengthens the EU". However, he said that this would take time and citizens would need to be involved in these changes, particularly through the European Parliament.
Eurogroup President, Jean-Claude Juncker also supported this approach noting that there is a need to change the working methods of the institutions. "We need economic governance", he said and he would especially like the "economic semester to be more political and less technical. The EU's economic policy coordination cannot remain the preserve of finance ministers."

Just half of MEPs convinced

Speaking one after the other, the presidents of the different political groups all warned of the dangers of treaty changes: this would have to be done transparently and respecting democracy. They were calling on involvement from the European Parliament and the national parliaments.

They were however more divided in their reactions to José Manuel Barroso’s speech. Representing the majority group in Parliament, the EPP, Joseph Daul stated that “this crisis results from the error of creating a currency without the necessary governance […] I call on the European Commission to strengthen cohesion in Europe!”

Others however have highlighted a lack of ambition in the Commission’s proposals. "When are we finally going to talk about investments ?" asked Martin Schulz, President of the S&D group. In the same vein, Guy Verhofstadt said, "there is only one solution – Eurobonds !" He also thinks that there is no need to create more positions at the head of the Union and that governance of the Eurozone needs to be resolved once and for all.

"Member States are no longer in a position to make the necessary investments out of their own pockets. We need Eurobonds as well as debt mutualisation", said Daniel Cohn-Bendit, co-president of the Greens/EFA group. He also would like to see "federalisation of the intergovernmental method".  However, this view is not shared by all as, for example, Jan Zahradil believes that the "community method is not necessarily the right one".

The debate is expected to continue after the Commission presents its proposals next week. Is resolution in sight ?


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