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Clear differences in opinion between the political groups came to light during a vote on public finances and their role following the economic crisis. The European People's Party and the Liberals request speedy measures such as raising the pension age and increasing the productivity of social services to improve the situation of public finances. Social Democrats, Greens and the European United Left, however, regard the immediate implementation of a budgetary consolidation both risky for the recovery of the economy as well as a possibility that this might result in social unrest. Instead, they demand a Finance Transaction Tax and a better balance with regard to taxing labour and capital.

The Report gives particular emphasis to the following measures:

  • According to the Parliament text, some Member States had not yet done enough with regard to reducing their administrative and health expenditure; healthcare and pension scheme reforms do leave a lot to be desired.
  • In order to reduce budget deficits, it was necessary to increase productivity in general, in particular, however, the productivity of social services.
  • Somewhat strange seems to be the request to the Commission to prepare a Green Paper, which would provide “solutions and alternatives” against falling birth rates in the European Union.
  • Also requested is a transparent financing of pension schemes within the scope of public sector budgets or funded private schemes.

What has nevertheless been mentioned is the fact that in particular the social security systems have been proven very effective in times of crises. A social state, however, could only be maintained, if deficits and debts were reduced.

The Parliamentary Rapporteur Hoang Ngoc of the Progressive Alliance of Socialists and Democrats suggested in two Proposal Amendments to set up a public rating agency. The private rating agencies had unfortunately failed in assessing risks, which had caused the financial and economic crisis, correctly. These suggestions as well as his statement that an immediate budget consolidation would put economic growth at risk and could even lead to social unrest, however, did not gain any support. Hoang Ngoc's request to introduce a Financial Transaction Tax and to implement a tax system, which would effect a better balance between labour and capital, also failed to find a majority. Instead, the text now provides for the increase in productivity of social services, which probably means social budget cuts whilst retaining the services at the same time and an increase in the pension age to take the pressure of public finances.

Given the fact that the text now obviously did not meet Hoang Ngoc's requirements at all, he had his name removed from the resolution and voted together with his colleagues (S&D), the Greens, the Members of the European United Left (GUE), the majority of MEPs of the Europe of Freedom and Democracy (EFD) group, most non-attached members (NI) and a small number of representatives of the European Conservatives and Reformists (ECR) against the resolution.


Source: European Parliament, 2010

Finally, a majority of MEPs from the European People's Party (EPP), Alliance of Liberals and Democrats for Europe in the European Parliament (ALDE) and some mandataries of the European Conservatives and Reformists (ECR) were able to get the Report through. Remarkable though was the conduct of the European Conservatives, who largely abstained from voting.

Further information:

Link to the resolution