Local view for "http://purl.org/linkedpolitics/eu/plenary/2003-03-11-Speech-2-246"
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"en.20030311.10.2-246"2
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".
Mr President, ladies and gentlemen and most particularly, Commissioner Solbes Mira, the presentation of the Commission document on Public Finances to which my report is dedicated shared at the time the firmly–held conviction that the economic forecasts for the European area should then be systematically revised downwards. The economic context of budgetary surveillance has indeed proven to be much less favourable than initially predicted and is demonstrated, specifically, by the doubling of the Eurozone’s deficit between the years 2000 and 2001, by the ‘fact’ that this imbalance grew and became more serious in 2002 and by the explanation and real scrutiny of the serious budgetary difficulties that have occurred in four of the Member States.
For this very reason, the Commission drew up recommendations and stated its intention to send early warnings about deviating from the budget to Member States that could potentially fail to comply. Although this was not carried out, it ultimately anticipated the true situation seen at the end of the year in those countries.
The tone of the speech President Romano Prodi gave this Parliament is therefore fully justified. In this speech he expressed his concern at the downturn in the economic cycle, but also emphatically criticised an inflexible and dogmatic enforcement of the Stability and Growth Pact regardless of changing circumstances and consequently called for adjustments and the introduction of more sophisticated criteria for implementing the Pact. Since then, many politicians, experts, research bodies, academics and leaders of public and published opinion have contributed their thoughts on the matter. The Commission itself has stuck to the prudent but ambitious interpretation of its President, redrafting a less rigid and more active framework of budgetary supervision that now adheres to the principle that the Pact’s implementation must make it an ever more valuable instrument in promoting stability, growth and employment.
The report endorses this viewpoint to the extent that it considers this to correspond to an intermediate stage between the rigid application of the Pact and the crucial development towards an interpretative model, which it considers to be inevitable in future, taking account of more sophisticated criteria such as inflation, employment, public debts and changes in these debts, financial burdens arising from the ageing of the population and investment requirements. Finally, the quality of public expenditure must serve to bring the SGP into line with the objectives laid down in the Lisbon strategy and with the principle of sustainable development as agreed in Gothenburg.
The political prevalence of budgetary constraints and a rigid interpretation of the financial balance under multilateral surveillance have led in recent years to a steady decline in the ratio of public investment to GDP, although it must be acknowledged that private investment has followed the same trend. All of this coincides with the increased difficulties that the European economy has been displaying. The solutions proposed initially or which are now being adopted are not unheard of in the context of some developed economies in the OECD where the ‘golden rule’ is a crucial element, not only for consolidating public finances, but also for launching and sustaining a process of economic and social development.
Following the enormous step that was the creation of the single currency, the Union appears today to be in a genuine state of paralysis. The excessive restrictions on monetary and budgetary policies, which were designed with the intention of strengthening the European economy and its single currency and to allay the suspicions and fears of the Union’s most powerful countries, could turn into unexpected limitations that will make the sought-after recovery entirely dependent on the smooth operation of the driving force that is the US economy.
The flexibility and rationality that are being advocated are not incompatible with the need to ensure compliance with the real spirit of the Stability and Growth Pact, and nor does a public debate on the matter diminish the scope of its objectives. The financial consolidation of the States that accept a common monetary policy and a single currency and which reject any self-sufficiency that hinders open relations with countries outside their own zone is crucial and must be pursued. Many countries, incidentally, have enshrined principles and rules in their Constitutions establishing rules – some more rigid, some less so – for budgetary deficits. This is also crucial in the political framework of the Union, but if this type of commitment is to be effective, priority consideration must be given to the interests of the zone as a whole – a very substantial area – with the use of discretionary instruments being acceptable in exceptional circumstances to aid the recovery of the least developed regions or countries.
We will otherwise face the risk of seeing only formal compliance with budgetary obligations, with countries in difficulty resorting to the most varied and creative accounting systems (which also makes their rapid harmonisation a necessity), in the sole aim of keeping the Commission satisfied, as guardian of the Treaties, or of temporarily deceiving the financial markets and for a while escaping their rightful punishment.
This, unfortunately, is the situation seen in many European economies at the end of 2002. Determining the current problems of the European economy when drawing up the balance-sheet of the degree to which the objectives outlined at the Lisbon Extraordinary summit have been attained is, therefore, absolutely crucial. It is also necessary to make it clear to Parliament, to the Council and the Commission that it is possible to achieve a balance between healthy financial consolidation in the countries of the Union and full compliance with these objectives."@en1
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