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Parliament divided about EU’s future

This week, the European Parliament adopted three reports on the future of the EU only with a slight majority – among those reports was also a joint report on a budgetary capacity for the Eurozone by the Committee on Budgets (BUDG) and the Committee on Economic and Monetary Affairs (ECON). The proposal for establishing such a budget is as old as the Economic and Monetary Union itself. However, it is experiencing an upswing once again in face of the stability problems of the Eurozone during the crisis.

The Commission welcomed the proposals of the Parliament and promised their consideration when preparing the White Paper, which is said to be published in spring this year within the framework of the Five Presidents' Report. The rapporteurs emphasised that the report is a strong signal not only for the stability of the Euro and the Eurozone but also for the future of the EU as a whole – a signal that is urgently needed considering the current state of the Union. Nevertheless, critical voices fear that the proposal would ultimately reinforce the calls for austerity and reform and thus, neoliberal policies. Hence, the proposal for a budgetary capacity does not go far enough. Rather, a strong social Europe and public investments, which would go beyond the Juncker Plan, is urgently needed was. These arguments are also among the key demands of the Chamber of Labour. A continuation of austerity policy and wage restraint has thus far neither been able to improve the current situation nor to close the investment gap. Against the background of the slowly recovering economy, however, future-oriented public investments is the most promising way forward as has been demanded with the Golden Investment Rule by the Chamber of Labour for quite some time.

The so-called Böge-Berès Report points out that the transfer of monetary policy from national to European level has to be accompanied by a transfer of fiscal and ultimately also economic competencies. Hence, the budgetary capacity is to fulfil three key functions: firstly, the economic and social convergence with regard to taxes, labour market, investments, productivity, social cohesion as well as the public administration should be strengthened by structural reforms in the Member States and the Eurozone. Secondly, a joint budget in the Eurozone shall be in a better position to absorb asymmetric shocks, by supplementing the European Stability Mechanism (ESM) with a mechanism of automatic stabilisation. Thirdly, the Eurozone budget shall have sufficient funds to also better absorb symmetric shocks, which equally affect the Eurozone – for example through investments to increase demand and full-time employment in times of crisis.

Result of the votes on the future of the EU

The Böge-Berès Report is one of three reports of the Parliament on the future of the EU. The two other reports are the Verhofstadt Report on possible evolutions of and adjustments to the current institutional set-up of the European Union and the Bresso-Brok Report on improving the functioning of the European Union building on the potential of the Lisbon Treaty. During the joint vote in the European Parliament, the report by Guy Verhofstadt, who most clearly promotes an even stronger political Union, only achieved a slim majority with 283 votes in favour to 269 votes against. The reports by Bresso/Brok and by Böge/Berès were also adopted with relatively tight results (329 Yes/223 No and 304 Yes/255 No respectively). Prior to the meeting of the heads of state and government on the occasion of the 60th anniversary of the signing of the Treaty of Rome in March, the parliament intended to present strong ideas on the future of Europe this week. Yet, it has failed its own ambitions and presented itself divided. It remains to be seen which proposals the Commission will include in the White Paper, especially as the Commission already hinted that Treaty adjustments would currently not be among the priorities of the Member States during the parliamentary debate.

Further information:

Report on budgetary capacity for the Eurozone (Böge-Berès Report) (EN)

Comment on the reports by Florian Eder at POLITICO

AK Position Paper on the Five Presidents' Report (2015)

Factsheet of the Commission on completing the Economic and Monetary Union

More on the Golden Investment Rule

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