COMPLETE THE EUROZONE: JUST DO IT, AND DO IT FAST!

The Spinelli Group meeting in Strasbourg on 9th of September welcomes the Five Presidents' Report on “Completing Europe Economic and Monetary Union” submitted to the European Council in June 2015.

We share the view that the monetary union is not sustainable in its current form and that progress towards economic, financial, fiscal and political union is required to address the economic and institutional weaknesses that could eventually lead to its disintegration.

The Report rightly puts the completion of the banking union (including a common backstop to the single resolution fund and an adequate system of deposit insurance) and a capital market union as short-term priorities. We urge the European Commission to present legislative proposals in this respect as soon as possible and we invite the groups in the European Parliament to cooperate to ensure a fast finalisation.

The timing and process for reaching the long-term objectives set in the Report do not match the urgency of the challenges facing the Economic and Monetary Union. In many Member States, citizens are frustrated by the lack of jobs and economic stagnation. A much faster pace in integration is needed. There is no reason why the proposed White Paper to detail a path towards a fiscal, economic and political union cannot be put in motion immediately rather than in two years’ time. Its preparation should involve the political groups in the European Parliament and not be left again in the hands of another expert committee. There is no reason to postpone the completion of the monetary union to 2025.

Greater clarity is required on the key elements of the economic, fiscal and political union envisaged by the Report. A fiscal and economic union cannot remain only a set of rules for national economies but should move towards a system of further sovereignty sharing within common and strong institutions. Key political decisions on national fiscal policies should become a common concern and be made jointly. The Report rightly insists on bridging the divergences between the various economies of the Member States, based on current rules and recommendations on structural reforms. However, the Eurozone should have a role to support such an effort and should have tools and resources for an active European economic policy for the interest of the euro area as a whole. In this respect, a Eurozone budget, with own resources sufficient to have an impact on the Eurozone economy, should be a priority for example.

The democratic legitimacy of the Eurozone decisions needs to increase in parallel to any advance in further integration. As the recent negotiations with Greece well illustrated, the current governance of the euro pits national democracies against each other. Instead what is needed is a strong European legitimacy for Eurozone decisions. A more independent role for the European Commission, as government of the Eurozone, and greater involvement of the European Parliament would enable decisions to be taken at the appropriate level and improve both efficiency and accountability.

To implement the envisaged longer term goals, treaty change or the conclusion of an additional Treaty for the Eurozone will be required. Member States should take this debate as an opportunity and not as a concern. The European Parliament should stand ready to make its proposals to prepare such debate and defend the case in front of the European citizens.
The stakes are too high not to act immediately.