POLITICS & POLICY
Discussions over the future of the Eurozone and the Economic and Monetary Union are under the spotlight. On Wednesday, the European Commission published a reflection paper on the future of the Economic and Monetary Union (EMU). The paper is the third in a series of thematic reflections that follow the “White Paper on the Future of the European Union”, published in March, on the occasion of the 60th anniversary of the Rome Treaties.
The reflection paper lists a set of measures aimed at fostering integration both between within the Eurozone and the European Single Market. The document was presented in Brussels by Commissioners Pierre Moscovici and Valdis Dombrovskis and received wide coverage by the European press.
Handelsblatt (#2, #3) and Die Zeit in Germany, and other major European outlets, such as El Pais, focused their attention on the Commission’s proposal to work towards a new financial tool aimed at easing off the problematic link between the private banking sector and Member State governments. The EC suggests the introduction of so-called sovereign-bond-backed-securities (SBBS), a set of assets issued by private and public institutions, the value of which should be backed by a number of sovereign bonds bundled together. However, in an article published shortly before the publication of the paper, Reuters claimed that such assets would fail to achieve triple-A rating by international rating agencies.
Moreover, the reflection paper stresses the need to improve the European Semester process in order to increase coordination among economic policies in different Member States. More importantly, the EC outlines a path towards the creation of a Treasury of the Eurozone, chaired by a permanent member of the Eurogroup (the President) who could, at the same time, hold the function of Economic Commissioner within the EC.
Notwithstanding the vast amount of proposals included in the document, most of the European press (Le Monde, Irish Times) agree on the fact that the tone of the paper remains cautious and moderate. The European Commission claims that integration should move on gradually over the next eight years, with a milestone set for spring 2019, before the next European elections. On Monday, the President of the European Central Bank (ECB) Mario Draghi said that European Union leaders should not be afraid of changing the Treaties if this is necessary to strengthen the fiscal capacity of the Eurozone.
Meanwhile, on Wednesday, MEPs and Commissioners kicked off a final round of talks aimed at doubling the financial resources of the so-called Juncker Plan in order to spur investments across Europe. The European Fund for Strategic Investments (EFSI) was set up in 2015 and backed €37bn worth of investments up to this day.
Likewise, on Tuesday, MEPs, national governments and the Commission reached an agreement over a new securitization package aimed at reviving and integrating national financial markets. More specifically, the measures ease off the process of bundling together different kind of assets on the financial market, thus fostering the chances of funding for businesses and households. The Association for Financial Markets in Europe (AFME) claimed that the decision represents a “crucial milestone” for the development of a the Capital Market Union (CMU).
On Tuesday, European budget Commissioner Guenther Oettinger hinted at the possibility that disbursement of EU funds could be linked to the fulfilment of political conditions in the near future. More specifically, Oettinger claimed that the respect of rule of law and the implementation of policies in line with economic recommendations set out by the EC might become necessary conditions to obtain structural funds.
“You’ve turned from Saul to Paul on the road to Damascus, so now you are working hard on tax evasion but citizens want to have a clear statement of responsibility about what you did in the past”.
Green MEP Sven Giegold, accusing Jean-Claude Juncker during a Parliamentary inquiry over fraudulent tax schemes in Luxembourg.
Source: EUobserver, 31.05.2017
The number of days truck drivers can be paid under their home country’s rules while traveling in another EU Member State, according to a new European Commission proposal aimed at preventing social dumping between eastern and western Europe.
Source: EurActiv, 31.05.2017
Photo Credits CC Ewan Kingston
Also published on Medium.