Local view for "http://purl.org/linkedpolitics/eu/plenary/2006-05-16-Speech-2-379"
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"en.20060516.41.2-379"2
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"Madam President, first of all, I should like to thank Mr Rosati for his excellent report and the Committee on Economic and Monetary Affairs for having taken the initiative to reflect on the situation of public finances in the economic and monetary Union. They have enriched this very necessary debate on how to conduct economic policy – particularly budgetary policies – so as to enhance economic growth and promote job creation, aims that we all share.
I must begin my brief speech with two comments that set my position apart from the statements contained in Mr Rosati’s report, probably because some time has passed and has brought some positive results. Since last year, when the Commission drafted its report on public finances, the figures in which served as the basis for the Rosati report, we have received new information both on economic growth and on the balance of spending or public deficit situation in the countries of the European Union, which improves the outlook. I should like to discuss that briefly.
On 8 May I had the chance to present the Commission’s spring economic forecasts and, in doing so, I was able to publicly state that, in our opinion, according to the Commission’s analysis, growth in 2006 in both the euro zone and in the European Union as a whole will approach our potential growth: in the euro zone it will exceed 2%, specifically reaching 2.1%, compared with the 1.3% achieved in 2005, and in the European Union as a whole it will be 2.3%, also clearly higher than the growth recorded in 2005.
We are therefore entering a phase of much more evident recovery than we could envisage when we in the Commission presented the report on public finances for 2005, and that in itself is a positive sign. I hasten to say, however, that it is not enough, because growing at the rate of our current growth potential is not enough to meet all of our citizens’ demands or, above all, to create sufficient jobs to produce a clear, sustained fall in unemployment rates, which are still in excess of 8%.
We have to increase our growth potential – and in that I agree with the ideas expressed in the Rosati report; we have to persevere along the path sketched out in the revised Lisbon Strategy; we have to continue to put the national reform plans into practice within the framework of that strategy; we have to continue reforming the product, service and labour markets; we have to correct budgetary imbalances wherever they persist, achieve greater sustainability for our public finances and, of course, improve the quality of public spending; in particular, we have to make a greater effort in all of our policies aimed at skills enhancement, research and development, innovation and education in general.
The second comment that I should like to make relates to the particular subject of public deficits. The report notes that the situation worsened in 2005 and attributes that to the incorrect application of the Stability and Growth Pact. The final figures for 2005 refute that statement; the public deficit in 2005 both in the euro zone and in the European Union as a whole was well below what we estimated a few months ago: it came to 2.3% in the EU as a whole and 2.4% in the euro zone, several points, therefore, below our forecasts at the time when the Commission published its report on public finances for 2005. According to our forecasts for 2006 and 2007, this situation will continue and, if the Member States adopt additional measures, we will see a clear improvement.
In my view, I do not think one can say that the new Stability and Growth Pact has been incorrectly applied, but rather that the new Stability and Growth Pact has been successfully applied to correct the excessive deficits: there were seven countries with excessive deficits of 3% at the end of 2005, compared with 12 countries currently subject to the excessive deficit procedure, which will probably leave the procedure once those improvements in public deficits are confirmed. The stability and convergence programmes, which have been approved under the guidelines and parameters of the new Pact for the first time, show a qualitatively clear improvement in the Member States’ medium-term budget strategies, with greater attention to sustainability and a greater effort to improve the quality of public finances and to link budgetary and fiscal policies with the growth strategies included in the Lisbon Strategy and in the national growth plans.
Apart from these two comments, there is considerable convergence in everything else between the proposals and statements in the Rosati report and the Commission’s opinions and criteria. We agree on the need to avoid pro-cyclical policies, on the need for a reorientation of public expenditure towards greater physical, human and technological capital accumulation, and on the need for greater efforts to make the Member States’ budgetary procedures more uniform, particularly in the euro zone; we obviously agree that we must place the accent on how to address the challenge of an ageing society.
Now that economic recovery is beginning, now that we have defined the Lisbon Strategy, and now that the 25 Member States have defined their priorities for structural reforms aimed at growth and employment, I believe – and here I share the view of this report – that we have a unique opportunity to close the door on a period of low growth, economic pessimism and lack of confidence among economic operators. We have a unique opportunity in our hands to use Europe’s institutions and the European dimension to meet the people’s demands and aspirations."@en1
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