27 February 2012
Growth, state aid and Eurobonds
On 23 February, the president of the European Economic and Social Committee (EESC), Staffan Nilsson, welcomed the vice-president of the European Commission responsible for competition policy, Joaquín Almunia, to the EESC's 478th plenary session. Mr Almunia expressed his gratitude for the opportunity to present the Commission's project for modernising state aid control to civil society representatives who work in Brussels to defend the interests of 500 million citizens across the EU. EESC members also adopted an opinion on growth and sovereign debt in the EU, with concrete proposals on Eurobonds and Union bonds that could not come at a more opportune moment.
Mr Almunia recalled recent events that are shaping the economic future of the EU: just a few days ago Olli Rehn presented the Commission's forecast exercise, outlining the difficulties involved in getting back to growth and job creation. An important element is the modernisation of the rules that the EC uses to control state aid. Public spending cannot be neglected as a growth engine. "It must be efficient, effective and targeted towards growth-promoting policies by investing in physical, human and knowledge capital", said Mr Almunia.
During the debate, EESC members' comments referred to the importance of adopting provisions that do not prevent aid for the more vulnerable groups of the population such as persons with disabilities, in the area of services of general economic interest and SMEs.
To provide guidance on how to create growth the EESC adopted an own-initiative opinion proposing a new financial framework for stability and investment, entitled "Growth and sovereign debt in the EU: two innovative proposals". Arguing that the euro problem is primarily political rather than economic, the opinion suggests new economic policies that avoid falling back on national egoism or curtailing rights. Carmelo Cedrone (Workers' group, Italy), rapporteur for the opinion, outlined the core proposal, namely the introduction of two complementary but distinct EU bonds: Union bonds for stabilising debt, and Eurobonds for recovery and growth.
In practice, this would mean converting national debt up to 60% of GDP to consolidated but untraded Union bonds that would consequently be secured against speculation. The conversion would keep the affected states Maastricht-compliant in terms of their remaining national debt and the Stability and Growth Pact would not need to require revision. On the other hand, Eurobonds would be issued by the experienced European Investment Bank to co-finance the European Growth Pact, a New Deal that could attract funds into the EU, for example from BRIC countries keen to keep reserves in euros.
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