Euro Crisis Warrants Economic Reform
Strasbourg, 15th December 2010
I called for action and not more words in a debate on the economic crisis in Strasbourg this morning. I firmly believe that now is not the time for further centralism and economic governance.
As EU leaders prepare to meet in Brussels for the final European Council of the year, they should focus their efforts in bolstering political will to reform their economies rather than triggering a new institutional debate about treaty changes.
Sanctions on EU countries that fail to live up to their Stability and Growth Pact must be credible if they are to be effective. There are already procedures in place to tackle the excess deficits that were built up in the past decade but the EU had failed to follow through with them.
Having just finished a major reform treaty process - a reform package that we were told would close the book on treaty change for a generation - we are now, just a matter of months later, apparently to embark on another.
We are reassuringly told by the Commission President that the changes need only be 'limited'. But that does not appear to be what the German government believes. The German Finance Minister, Dr Schaüble seems to have opened the door to a new round of integration leading to a fiscal union, and ultimately, political union.
Where is this going to end? Surely not in another lost decade focusing on the wrong kind of reform?
Europe needs economic reform: public finance discipline, deepening the internal market, changes to labour laws to boost employment, and a package of measures to make a success of the Europe 2020 programme. Already I fear this opportunity may be slipping from our grasp.
We believe the priorities of the European Council must be to agree a limited number of specific measures so that Euro zone members can help each other through the immediate crisis - (without imposing any burdens on member states who have chosen to remain outside), and then to reassert the vital importance of dealing with the long-term crisis which we face: the risk of a permanent collapse in our economic competitiveness.
