Finance ministers have not moved enough for good economic governance - Main contents

The latest proposals from EU finance ministers for the EU economic governance package are "insufficient" said the Economic and Monetary Affairs Committee on Tuesday. The committee said ministers have not done enough to give the stability and growth pact strong preventative leverage, and was critical of both of their backtracking on commitments to look at high-export countries as sources of imbalances and of their watering down of arrangements for hearings of ministers by the committee.

Committee chair Sharon Bowles (ALDE, UK) said: "It is true that the negotiated text includes a lot of Parliament's ideas, but it does not go far enough, in particular on Reversed Qualified Majority Voting. We will therefore be adopting the majority of the negotiated text but going a little further. However we have agreed to keep the door open to a final vote in July, so the Council can come back with an improved offer."

"It has also been particularly aggravating to the Parliament that France and Germany, the two countries that weakened the stability and growth pact, joined forces to resist the very measure that would do most to prevent such future undermining."

"It is wrong to say that co-decision fails when the Council does not get what it wants. Much has been achieved but on such a political issue, the search for democratic ownership is vital and can only be given by the Parliament."

Corien Wortmann Kool i (EPP, NL), the MEP leading the push to introduce an element of automaticity in the preventative phase, insisted that the Commission must have the political freedom to single out Member States that fail to take the action required of them to correct their deficits and debt.  "We must remember 2003 and 2005" she said, when governments repeatedly helped each other to evade Commission warnings. "We do not need to look at decision-making processes in three years' time, as suggested by the latest Council proposal.  We already know that these processes are inadequate and need improving", Ms Wortmann Kool said.

Next steps

On Thursday, Parliament will put the texts agreed at the latest trialogue session, just a few days before yesterday's Ecofin Council meeting, to a plenary vote.  An amendment will also be tabled to include automaticity in the preventative part of the stability and growth pact. The vote will however stop short of closing the first reading, in order to allow talks to continue in earnest with a view to clinching a deal as soon as possible. The texts as adopted will provide the European Council with the official position of the whole house.

Background

The main bone of contention is whether to introduce reversed qualified majority (RQMV) voting in Article 6(2) of the text amending regulation 1466/97.  This would make it much more difficult for the Council to close its eyes to lax fiscal policy on the part of any given Member State, since the Council would have to vote to reject, rather than simply ignore, the Commission's recommendations for remedial action. This would make it far easier for the Commission to point out that a Member State has not taken the suggested remedial action, the step directly preceding financial sanctions.  MEPs argue that without such a clause, it will be very difficult to get to the stage where the imposition of financial sanctions can be used as a threat to bring about corrective action.

In the chair: Sharon Bowles (ALDE, UK)