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How to clear away doubts about the Euro
Comité économique et social - CES/13/16 20/02/2013
20 February 2013
How to clear away doubts about the Euro
The EESC insists on the need for further integration and solidarity to transform the European Monetary Union into a genuine economic, political and social union. An important element in this process is an active role of the Eurogroup, the European Central Bank (ECB) and the European Investment Bank (EIB) that would clear away doubts about the Euro, while allowing credit to flow into the real economy and relaunch growth.
In the light of continuing mistrust in the Euro, on February 19 the European Economic and Social Committee (EESC) held a public hearing to discuss the future of the single currency and the EU as a whole. Participants included Commissioner Olli Rehn, Italian Minister for European Affairs Enzo Moavero Milanesi and the Chair of the EP Committee on Employment and Social Affairs Pervenche Berès, who exchanged points of view on the future of EMU and Europe with civil society representatives, experts and journalists. President Nilsson opened the debate calling for a new deal to engage the EU with sustainable growth.
Although more than ten years have passed since the Euro was adopted, this anniversary was hardly mentioned, and the economic benefits of the single currency are often underestimated. This loss of confidence is pushing vulnerable euro area Member States into a spiral of speculation which increases the costs of public and private debt. In this context, the EESC own-initiative opinion “Where is the euro headed?” gives advice on how to strengthen the euro area governance, with a discussion on new economic, legal and political instruments and the potential role of common public debt, the ECB, the EIB and the EIF (European Investment Fund).
“Germany’s disappointing GDP growth rates and recent American and Japanese anti-cyclical expenditure programmes show that we were right at the Committee when we asked for a similar stimulus for Europe two years back. Let’s face it - the policy of austerity for the sake of austerity was wrong”, said Carmelo Cedrone (Workers' Group, Italy), rapporteur for the opinion. Likewise, Michael Smyth (Various Interests Group, UK), President of the EESC Section for Economic and Monetary Union and Economic and Social Cohesion, expressed concerns about banks, which in spite of the ECB’s efforts to inject liquidity are not providing SMEs with credit. “Isn’t it possible for the EIB to give loans to SMEs through short term lending?”, he asked.
Meanwhile Commissioner Rehn defended the two-pack reforms as a necessary step towards growth and pointed out that any pooling of debt involving deeper integration would require a reform of the treaties. The Commissioner agreed with the ECB and ESM representatives on the need to restore credit for SMEs and confidence in the EU banking systems. “We can learn lessons from the USA”, he added. This view was shared by Minister Moavero, who emphasised the importance of sound budgetary policies for recovery, while also pointing to public investment for restoring growth and possible steps to mutualise debt, in line with confidence being restored.
The different views shared at this public hearing will contribute to the ongoing debate on the future of the Euro at the EESC, to be reflected in the opinion on “Where is the Euro headed?”. The guiding principle of this opinion, still to be voted on at the Plenary Session, is that the best way to avoid recession, reduce national debt and stabilise budgets is to reverse the idea of “stability for growth” and make growth an equally important objective. The Euro area therefore needs a pact to pool debt and create growth, employment and stability involving the social partners and organised civil society as a whole.
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