The EU Parliament slams Commission on economic governance

European Parliament ECON Committee Press Conference on Economic governance “two pack” with European commissioner Ollie Rehn, in charge of Economic and monetary affairs and the Euro. (from left to right) Sharon Bowles (ALDE, UK), Chair ECON • Elisa Ferreira (S&D, PT) and Ollie Rehn. (European Parliament photographic library).

European Commission vice President, Ollie Rehn, responsible for Economic and Monetary Affairs and the Euro, delivered a speech in the European Parliament on the “Social pillar of the European Monetary Union-EMU”, which was very ill-received by the legislators. The Parliamentarians yesterday went as far as to comment bitterly in a resolution they issued afterwards, saying that the “Commission should first ensure that the economic governance ‘six-pack’ and ‘two-pack’ are off to a good start. Only then should it concentrate on further initiatives”. This is a clear message to both, the Commission and the Council that the Parliament will not accept any more measures strengthening the draconian controls imposed already on member states’ fiscal accounts.

Economic governance

At this point it has to be reminded that up to now the only concrete and far-reaching legal content that the EMU has in it is the economic governance rules that is the ‘two pack’ and the ‘six pack’. Last February the 20th when the ‘two pack’ was approved by the Parliament the European Sting wrote, {The ‘Two Pack’ introduces new rules to enforce stabilisers on Eurozone countries budgets. In 2011, six new sets of rules, the so called ‘Six Pack’, came into force to strengthen economic coordination among EU member states. The 17 Eurozone countries, however, needed further rules – these are in the “Two Pack”. The main difference between the “two” and the “six” packs is nothing less than the national sovereignty…government budgets in the 17 Eurozone countries will be submitted to national Parliaments after the Commission has given its approval}.

It appears that at that time most of the Parliamentarians approved half-heartedly the new tough legislation on Eurozone’s economic governance. On the one side, Europe was obliged to show to the wide world that it can constrain its fiscal deficits, but on the other the Parliamentarians knew they had collaborated in the violation of their countries’ sovereignty. This was a bitter moment for the Parliament back in February the 20th this year.

Now the Commission comes back and proposes a kind of sweetener, under the heading of “strengthening the social dimension of EMU”. Not a word about enhancing the democratic accountability of the Commission in its new role as the ‘guardian’ of 17 member states government budgets.

On top of that Rehn, despite offering to Parliamentarians this new Commission’s initiative as a sweetener, he didn’t hesitate to embed in it and some more strong measures. While presenting to the MEPs his new proposal he said that, “Finally, the deepening of EMU requires a genuinely integrated labour market. Enhanced labour mobility within the whole EU is important for the efficient operation of the single market as well as to better match work and workers to enable a higher level of employment”.

In reality with this statement Rehn recognises that over the next years workers in the south of Eurozone will not be able to find a job in their home and will be obliged to emigrate northwards. Of course the most suitable place to look for a job will be Germany, and the European Union has to facilitate this. How? By paying for train tickets? In the 1950s young Greek and Italian workers were transported to Germany with ‘special’ trains. Probably Rehn is now ready to organise this new emigration wave from south to north. Last year 34,000 young Greeks went to Germany to work.

In view of that the Parliamentarians were rather disillusioned with the Commission and responded in a bitter way observing that the “Commission should first ensure that the economic governance ‘six-pack’ and ‘two-pack’ are off to a good start”. There is more like that.

The resolution that the Parliament adopted yesterday was full of similar remarks. The very title read like this “Solidarity and democracy must also be part of deeper economic governance”. This is an obvious reference to the lack of solidarity and democracy in the ‘two pack’. The Parliamentary resolution also says that the Commission has not embedded enough democratic control into the new ideas and that tools are needed to help reforms and address social concerns. It was passed yesterday Thursday in Strasburg with a large majority, by 484 votes to 107, with 13 abstentions.