The proposed new legislation to strengthen budgetary oversight of Eurozone countries should allow as much economic governance as possible to take place within the normal EU system, rather than outside it through international agreements, Economic and Monetary Affairs Committee MEPs unanimously said on Monday evening. Many also highlighted a risk that the legislation could undermine the democratic legitimacy of budgetary policy if the Commission were not made more accountable.
Towards the very end of 2011 the Commission presented two further pieces of legislation to complement the economic governance "six pack", notably by increasing Commission powers to oversee Eurozone countries' budgetary policies and tightening such surveillance one notch further for countries receiving bailout funds. Parliament shares decision-making power with the Council for both legislative texts.
This discussion comes as the working group tasked with preparing a first draft of an international agreement to strengthen economic governance in the EU starts work. Elmar Brok (EPP, DE), Roberto Gualtieri (S&D, IT) and Guy Verhofstadt (ALDE, BE), are members of the working group.
Normal legislation, not ad hoc treaties
Jean-Paul Gauzès (EPP, FR), rapporteur for the text on surveillance of "bailout countries" said the two proposals offered an opportunity to impose stronger economic governance without working outside the normal EU arrangements (the "Community method"). "Much of what is proposed in the international treaty can be done through the 'six pack' and these two texts. We should integrate as much of the international treaty elements as possible into these two new texts", he said.
This view, echoed by others, builds on the opinion already voiced by the three "drafting working group" MEPs that much in the planned international agreement can in fact be accomplished through normal EU legislation.
Danger of losing democratic legitimacy
Many MEPs also highlighted the danger of entrusting broad surveillance powers to the Commission without also addressing its accountability. "We need to always keep sight of democratic legitimacy when drafting these texts", Elisa Ferreira (S&D, PT), the second rapporteur said.
Sven Giegold (Greens, DE), argued that if surveillance was to be increased, then the transparency with which the new powers were exercised also needed to be strengthened. "The legislation is useful in that it gives legality to an ongoing situation. However, I still have an issue with giving added surveillance powers to an institution which has already failed in this task", he added.
Surveillance to promote growth, not just for austerity
The other weakness highlighted by various MEPs was that the proposed legislation was too closely focused on austerity, and not sufficiently on growth.
Ms Ferreira warned that "This proposed legislation and the international treaty risk reducing the focus of the six pack to one only based on imposing austerity", adding that "it is important to make sure that the detailed monitoring now proposed will not hamper a country's long term goals".
Ramon Tremosa i Balcells (ALDE, ES) proposed that together with extra surveillance, cost benefit analyses should be carried out by the Commission to evaluate the usefulness of infrastructural investments, so as to ensure that spending went to projects with potential.
Various other MEPs aired the idea of cutting EU structural funds to excessive deficit countries, but without reaching a verdict on whether this might do more harm than good.
The two draft reports amending the Commission proposals will be officially presented by the Economic and Monetary Affairs Committee draftspersons on 28 February.
In the chair: Edward Scicluna (S&D, MT)
elmar brok, guy verhofstadt, jean-paul gauz, elisa ferreira, edward scicluna, sven giegold, ramon tremosa, roberto gualtieri, european union, economic and monetary affairs committee, european parliament, european commission, euro, politics, political philosophy, committees of the european parliament, chair
1685 days ago,(2012/01/18) - News Articles
Parliament on Wednesday again sounded the alarm about possible pitfalls for the intergovernmental agreement currently being negotiated on closer economic union. Its resolutio...
1697 days ago,(2012/01/06) - News Articles
As the working group drafting the "international agreement on a reinforced economic union" reconvenes on 6 January, European Parliament representatives Elmar Brok (EPP, DE), R...
News: European Parliament Economic Committee To Vote On Limiting Bankers' Bonuses And Strengthening Banks - Economic And Monetary Affairs
1568 days ago,(2012/05/14) - News Articles
The economic and monetary affairs committee has a busy meeting to look forward to on Monday 14 May when its members will look at how to make finance work for the benefit of t...
News: European Parliament Economic And Monetary Affairs Committee: Banks And Governance Top Debate With Mario Draghi
1551 days ago,(2012/05/31) - News Articles
Bank's troubles and how to solve them dominated discussion with Mario Draghi in the Economic and Monetary Affairs Committee on Thursday. Speaking in his capacity as Chair of t...
News: European Commission: Financial Transaction Tax And Switzerland Dominate Discussion With Semeta
1623 days ago,(2012/03/20) - News Articles
Any taxation of the financial sector must be based on the financial transaction tax model proposed by the Commission and Member States should not attempt to use "B or C plan...
1714 days ago,(2011/12/20) - News Articles
The European Parliament's current President, Jerzy Buzek, is soon to hand over the reins to his successor, who will be chosen by the full body of MEPs at the Strasbourg...
1686 days ago,(2012/01/17) - News Articles
The Eurozone is in a "very grave state of affairs", Mario Draghi told Economic and Monetary Affairs Committee MEPs on Monday, in his first visit as head of the European Syst...
328 days ago,(2015/10/06) - Celoxica
Delivering small footprint & high message volume processing for multiple markets at ultra-low latency London and New York, 5 October 2015: Celoxica, the leading pro...