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Press Release

The EU's Assembly of Regional and Local Representatives


Brussels, 1st February 2013

Economic and Monetary Union:
CoR calls for full implementation and democratic legitimacy

The Committee of the Regions considers the strengthening of Economic and Monetary Union (EMU) vital to fostering sustainable growth, social progress and further political integration within the EU. At the same time, in a resolution adopted by the plenary session on 1 February, regions and cities stress that democratic legitimacy needs to be ensured when developing the EMU. This should be achieved through the key role of the European Parliament, the involvement of the national parliaments and the participation of the local and regional levels, in particular the regions with legislative powers.

The CoR addresses the heads of state or governments, making clear that regions and cities fully share the aim of intensifying economic policy integration and, therefore, welcome the proposal of contracts between Member States and the EU institutions enforcing the implementation of structural reforms. Such agreements should be concluded on a case-by-case basis and should be accompanied by temporary and targeted financial support, and, overall, they must involve local and regional authorities and safeguard democratic accountability.

The CoR warnings come a few hours after a meeting between Members of the European Parliament and national parliamentarians highlighted these very risks in relation to the European Semester process.

As regards the integrated financial framework, the CoR welcomes the agreement on a Single Supervisory Mechanism and highlights the need to grant proportionality in reporting obligations in order to preserve the role of regional banks in providing capital for SMEs and public investment projects.

On the budgetary framework, the resolution underlines that EMU needs to be accompanied by proper budgetary rules and calls for a rapid adoption of the "two-pack". However, extreme caution has to be taken so as to ensure that these rules do not have negative consequences on the financial and fiscal autonomy of local and regional authorities. Therefore, these authorities must be adequately involved in shaping and implementing the rules. Furthermore, the CoR is convinced that a fiscal capacity is needed to support economic reforms in Member States and to achieve a genuine EMU.

In the context of economic policy integration, the Committee call on Member States to consider signing to "Social Investment Pact" based on the model of the "Euro Plus Pact". This would set targets for social investments to be taken by Member States in order to meet the employment, social and education objectives of the Europe 2020 strategy.

Given the need to step up progress on these two fronts, local and regional authorities are ready and willing to make their contribution especially in shaping the future economic governance of the EU.

This is also one of the key messages of the opinion on creating greater synergies between EU, national and subnational budgets drafted by Rhodri Glyn Thomas (UK/EA), a member of the National Assembly for Wales, and adopted by a large majority at the CoR plenary session.

Local and regional authorities are responsible for two-thirds of direct investments in Europe and tend to focus on key priority sectors of the Europe 2020 strategy such as economic affairs, education, environment, housing and community amenities. If Europe is to achieve the objectives set within the strategy, stronger coordination between EU, national and subnational budget is needed. In this context, the Committee regrets that the current debate around EMU is limited to the main EU institutions and Member State governments, despite the impact stronger centralisation of controls at EU level could have on the budgetary rights and responsibilities at sub-State level and fiscal decentralisation. It also regrets the continuing failure, as evidenced in the Committee of the Regions 3rd Monitoring Report on Europe 2020, to effectively engage local and regional authorities across the EU in the European Semester and reiterates that synergies between budgetary processes cannot be achieved without synergies within the policymaking and monitoring process. The Committee stresses the relevance of a basic set of principles including fiscal autonomy, transparency, streamlining of processes and partnership.

The Committee of the Regions

The Committee of the Regions is the EU's assembly of regional and local representatives. The mission of its 344 members from all 27 EU Member States is to involve regional and local authorities and the communities they represent in the EU's decision-making process and to inform them about EU policies. The European Commission, the European Parliament and the Council are obliged to consult the Committee in policy areas affecting regions and cities. It can appeal to the EU Court of Justice if its rights are infringed or it believes that an EU law violates the subsidiarity principle or fails to respect regional or local powers.

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