At the Macro-Economic Dialogue today (6th November, full speech here), CEEP General Secretary Valeria Ronzitti called for a further deepening and reform of the Economic and Monetary Union (EMU). “The EMU represents a major step in strengthening the European project, and will lead to real convergence, meaning sustainable growth and employment“ explained Ms Ronzitti.
Ms Ronzitti highlighted a three-step approach to reach this goal:
- Completing the Banking Union: it remains the flagship of the EMU and would show that governments and EU institutions learnt the lessons of the financial crisis. The European Commission has already done everything possible to unlock the current deadlock around the European Deposit Insurance Scheme. “The ball is now in the camp of Member States and we hope that President Tusk will create momentum at the upcoming December EuroSummit to reach an agreement at intergovernmental level in June”, said Ms Ronzitti.
- Creating a macroeconomic Stabilisation function: CEEP strongly favours the development of a European Investment Protection Scheme. In times of crisis, public investments are the first to be cut from national budgets, and this has extremely negative consequences on future growth, employment and productivity. Such a scheme would protect well identified investments and show that EU and national institutions learnt the lessons.
- Reinforcing the European Semester: there should be a constant effort to reinforce the European Semester, which is the best tool to allow a real balance between economic and social dimensions in the EMU with a focus on upward convergence. Integrating a governance structure on social issues into the EMU governance would support and guide Eurozone members based on commonly agreed standards, while leaving Member States’ room for decisions on their specific social policies. Structural reforms will still be needed, but can only succeed if they meet two requirements:
- To systematically involve social partners, as a guarantee for legitimacy, fairness and democratic accountability, and support for social partners’ capacity-building activities;
- To be geared up towards productivity growth, partly supported by EU funds to boost long term investment; to reach this goal, it is crucial for the EU to be empowered with a strong Multi-Annual Financial Framework, able to support national reforms efficiently, while allowing for a better link with the EU Semester’s priorities.