Local view for "http://purl.org/linkedpolitics/eu/plenary/2004-02-25-Speech-3-081"
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"en.20040225.5.3-081"2
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".
Mr President, I should like to thank all the honourable Members who took the floor for speaking in this debate. I should also like to thank them for the ideas they put forward. Unfortunately, time constraints are such that I am unable to comment in detail on all of the latter. I would, however, like to highlight what I feel are the key aspects of the debate.
As to whether the Stability and Growth Pact is a problem or a positive element, I myself believe the latter is the case. I believe sound finances are essential to long-term growth. With regard to fiscal policy acting as a discretionary element to improve growth in the short term, it might indeed serve as such in some cases, at least in theory. In my view, however, it is also important not to overlook certain other fundamental issues. Firstly, the operation of the budgets and automatic stabilisers in Europe. This is far more dynamic here than in the United States. It means that every one-point drop in activity is compensated for by half a point as regards budget deviation.
There is indeed a limit in place, that notorious 3%. Experience has proved it to be a reasonable limit. I am convinced this is still the case, and that it is useful for the European Union to have a fiscal framework. I also believe this fiscal framework calls for budgetary balance to be achieved in the medium term, given the difficulties anticipated and the ageing population. Further, it seems to me that 3% as a nominal reference is a key factor for that budgetary balance in the medium term. It is essential to the desired efficient system that will make it possible to control activities under way and allow us to cooperate.
I therefore feel it is vital to tackle the problems related to the future of the pact. As I see it, the Treaty remains valid. The fundamental concepts certainly do. Nonetheless, improvements are called for in certain areas. The interrelation between the guidelines for economic policy and the pact is certainly one such area. It is important not to focus on fiscal consolidation
. Fiscal consolidation should be perceived as a way of generating increased growth. Clearly, this is closely connected with the Broad Guidelines of economic policy. It presents a second difficulty we have become aware of in recent years, namely that some of the problems currently experienced result from inappropriate action at a critical point in the economic cycle.
Growth elements have been introduced into the pact by giving more importance to structural deficits. Last November’s communication was along those lines. Some problems do still remain in this crucial area, of course. We are certainly prepared to discuss and debate them.
We feel the problem of the future is extremely important. With this in mind, the debt needs to become more important in the pact game. So too should all future commitments that are bound to have a negative impact on growth in the long term. Issues like the ageing of the population and the need to fund future commitments are crucial.
I have one last remark to make. In my view, as some honourable Members have indeed pointed out, the national will to apply the pact is absolutely vital. This could mean improving current budgetary processes. I have in mind changes to ensure national parliaments themselves are more involved in defining their own future commitments and in meeting the commitments eventually entered into.
I feel the starting point is sound. Increased growth would of course be welcome, and the margin for manoeuvre is indeed limited. In establishing its financial perspective, the Commission endeavoured to achieve a balance between on the one hand, not exceeding the current margin of manoeuvre, despite the additional commitments, whilst on the other hand, not increasing the current financial margin more than absolutely necessary. We are very much aware that at the end of the day the Union’s budget is 1, 1.4, 1.24%. We appreciate that the major element of public expenditure is currently at national level. Consequently, if there is no cooperation at national level it will not be possible to move towards that increased growth we all aspire to for Europe.
There seems to be widespread agreement that the rate of growth needs to increase, and that our present rate is unsatisfactory. Nonetheless, I would caution against simplistic comparisons. For a comparison between the United States and Europe to be valid, their respective starting points must be taken into account. The anticipated commitments of both areas must be borne in mind too. Even a comparison between the Eurozone and the zone beyond it is not straightforward. Essentially, the key issue arising at present is whether the Lisbon diagnosis remains valid or not.
I am convinced that basically, increased capacity for growth in Europe depends on two factors, namely more employment in Europe and more productive employment. I believe this diagnosis remains valid. If that is the case, the question arises as to what is going wrong in Europe. I do not believe the difficulty lies in the diagnosis. Rather, the difficulty lies in the implementation and practical application of what was decided in Lisbon.
It has to be said, however, that the Commission’s report clearly states that progress has been made in certain areas, though there is general dissatisfaction regarding others.
On the one hand, ground has undoubtedly been gained on the employment front. On the other, rather less has been achieved concerning productivity. Progress has also been made within the internal market, though not on the scale anticipated. A number of obstacles have been overcome, allowing the financial system to become more unified. Unfortunately, unification has not yet resulted in bringing financial costs down to a level comparable with what is the norm in the United States. Certain additional elements have been put in place, and I am sure these will prove helpful. In my view, the growth initiative is an important factor in relaunching other aspects.
Our proposals for this year focus on those elements that can facilitate productivity and ensure it increases. Research and development are indeed one of the objectives set. It is, however, important to put discussion of research and development into context. Clearly, 3% of GDP is a figure similar to that of the United States, but if one distinguishes between public and private investment in research and development in Europe and in the United States, the figure for public investment in Europe is higher than in the United States.
The question arises as to whether the figure alone is the problem, or whether the problem concerns our ability to work better between ourselves, avoiding duplication of activity. There is also the issue of generating added attraction and promoting private activity. These factors are all crucial, in my view. I certainly feel these priorities are well chosen and appropriate.
It should always be remembered that the Lisbon strategy also has clear limits. All agree that it should be a sustainable strategy. That implies a certain appropriate degree or level of social protection. It also implies a certain level of environmental protection.
This led to further points raised during the debate. The question arose, for instance, as to whether this was a difficulty related to defining a strategy. I maintained this was not the case. It is a problem of the political will, essentially at national level, to implement agreements reached."@en1
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