In presence of ECB President Mario Draghi, European Commission Vice-President Valdis Dombrovskis and Maltese Minister of Finance Edward Scicluna, Valeria Ronzitti, CEEP General Secretary, addressed the main issues faced by the EU economies at the macro-economic dialogue at political level.

Following the publication of European Commission’s Communication on Fiscal Stance, CEEP believes it is a clear call to responsibility sent to Member States, as wel as a call to start considering the Eurozone as a whole and not just as the sum of its individual components. CEEP also addressed:

The role of Member States fiscal policies

We have always considered public investment in key physical and social infrastructures as the main lever to foster growth for the benefit of citizens and enterprises in Europe. We also believe that some expenses favorable to long-term growth should remain separate from current expenditure: investment with positive effects on future generations, such as education and healthcare, could be financed with debt and deficits, unlike consumption expenditures.

The need for a balance between sustainability and stabilisation

For us, there is no point in opposing sustainability of public finance and the needs of stabilisation.
More efficient investment leads to larger effects on domestic GDP and larger international spillovers. Moreover, surplus countries can now borrow at record low interest rates. Therefore, the accumulation of government debt following fiscal expansion can actually be quite modest and does not endanger long-run debt sustainability.

The governance issues for the Economic and Monetary Union

We need to be realistic over what we can achieve. In the EMU, fiscal policies are a national responsibility. The SGP does not oblige countries with fiscal room for manoeuvre to make use of it. There is no guarantee that the coordination of national fiscal policies through the SGP will result in an appropriate aggregate euro area fiscal stance. With our present instruments, the concept of the Fiscal stance is methodologically and politically ambitious. It is now for Member States to commit and see this communication as an important step toward a more coordinated andexpansionary Euro area fiscal policy. The longer we wait, the more we decrease our long-term growth prospect.


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