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Barroso and Rehn speak at European Parliament debate on European Semester
Commission President José Manuel Barroso and Vice President Olli Rehn joined the European Parliament debates on the European Semester, held from 28-30 January. Discussions were held between Members of the European Parliament and representatives of national parliaments on how to improve economic policy coordination under the European Semester. In his speech on 30 January, Barroso said that Member States should continue to make the structural reforms that will “enable them to balance their public accounts and increase the competitiveness of their economies”, and underlined the importance of deepening the Single Market. He also mentioned the deepening of the Economic and Monetary Union as well as improved governance in the euro area as important objectives. In his speech on 29 January, Rehn said “we need to maintain the pace of economic reform to support the rebalancing of the eurozone.” He added that Europe needs to restore its competitiveness, citing dismal figures on manufacturing jobs lost in several major Member States. Both leaders underscored the importance of political union and democratic accountability, acknowledging the crucial role of the European Parliament and national parliaments.
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The European semester must embody a strong parliamentary dimension. And it is obvious that many issues are at stake and decisions need to be prepared or be taken which involve both the European Parliament as much as national Parliaments, be it in budgetary, fiscal or macro-economic terms.
José Manuel Barroso
President of the European Commission. |
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Financial Transaction Tax: finance ministers approve “enhanced cooperation” by 11 Member States
Based on the Commission proposal of 23 October 2012, European finance ministers agreed on 22 January that the 11 Member States that wish to apply an EU financial transaction tax (FTT) through enhanced cooperation may proceed. The 11 countries are Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia. The Commission will now make a proposal defining the substance of the enhanced cooperation, which will have to be adopted by unanimous agreement of the participating Member States. The aim of an FTT is to ensure that the financial industry makes a fair contribution to tax revenues, while discouraging transactions that reduce the efficiency of financial markets. Enhanced cooperation allows a limited number of Member States to proceed with a particular measure when the measure cannot be realised within a reasonable period by the EU as a whole, and provided that the cooperation remains open to any country that wishes to participate in it.
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Dijsselbloem appointed Eurogroup president
The Eurogroup of euro area finance ministers on 21 January appointed Jeroen Dijsselbloem as its president for a term of two and a half years. Mr. Dijsselbloem is finance minister of the Netherlands, and will retain his post while chairing the Eurogroup. He succeeds Jean-Claude Juncker, who has chaired the Eurogroup since 1 January 2005. In a letter to the members of the Eurogroup, Mr. Dijsselbloem said that the euro area should continue to implement the current fiscal consolidation strategy as well as reforms to boost jobs and growth, improve competitiveness and tackle the social consequences of the crisis. He called for more emphasis on surveillance and preventive policy coordination using the existing procedures, as well as the rapid implementation of the economic governance framework, rapid adoption of the two-pack and completion of the banking union. Dijsselbloem also wants to streamline the way in which the Eurogroup operates.
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Eurogroup looks forward to disbursement of EUR 2 billion for Greece
At the meeting of the Eurogroup on 21 January, euro area finance ministers supported the disbursement of EUR 2 billion to Greece under the second economic adjustment programme for Greece, to be formally decided by the European Financial Stability Facility (EFSF). The funds are the second instalment under the second economic adjustment programme. The Eurogroup approved the disbursement based on Greece’s achievement of its milestones for January. In particular, the Eurogroup noted with satisfaction that an income tax reform has been adopted, and end-user electricity prices for low-voltage customers as well as the levy on renewable energy sources have been adjusted. The funds will be released subject to formal approval by the Board of Directors of the EFSF, with a further amount to cover bank recapitalisation and resolution costs of EUR 7.2 billion also be paid out to Greece.
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Commission mission to Hungary encourages progress in fiscal consolidation, urges more attention to raising growth potential
Officials from the European Commission (EC), in close cooperation with staff from the International Monetary Fund (IMF) and observers from the European Central Bank (ECB), conducted a mission to Hungary from 16-28 January. Its purpose was to review recent developments and policy initiatives as part of post-programme surveillance linked to the EU balance of payments assistance provided over 2008-2010. The mission welcomed the fiscal consolidation achieved so far but urged the government to ensure that adjustment measures support a sustainable correction. Hungary’s GDP is expected to have declined by 1½% in 2012, and growth is expected to resume only slowly from 2013. An In-Depth Review of Hungary will be published in the spring, in the context of the Macroeconomic Imbalances Procedure.
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Review mission reaches agreement with Romania on corrective actions under precautionary programme
Teams from the International Monetary Fund (IMF) and the European Commission (EC) visited Bucharest during 15-29 January to conduct discussions on the 7th and final review by the IMF and the last review by the EC of Romania’s economic programme. Agreement was reached, at staff level, on corrective actions that are needed to achieve the objectives of the programme, especially regarding the reduction of government payment arrears and public enterprise reform, and on the 2013 draft budget. In view of the time needed to take these measures and complete the reviews successfully, the authorities will ask for an extension of their programme with the IMF by three months. This should also facilitate the completion of the last review by the EU.
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Vice-President Rehn at conference of European Trade Union Confederation calls for reform and constructive social dialogue
Speaking at the 40th anniversary conference of the European Trade Union Confederation in Madrid on 28 January, Vice President Olli Rehn said that trade unions have an essential contribution to make to Europe’s joint efforts to overcome the current crisis and return to sustained recovery. Rehn said that Europe needed to restore its competitiveness. Among other measures, he called for balanced but ambitious labour market reforms that remove obstacles to job creation. Rehn noted that genuine dialogue between social partners would ensure that reforms are well designed and implemented.
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Commission hails progress on using structural funds in Greece but calls for even more effort
Greece has been effective in using Structural and Cohesion funds to help revive its economy, according to the European Commission. The Greek government has submitted payment claims of up to EUR 3.2 billion that cover 87% of the target set for the past year. Johannes Hahn, Commissioner for Regional Policy, in his meeting with Greek Minster Kostis Hatzidakis on 23 January, also stressed that more needed to be done, however, to complete priority projects on time or reallocate the funding to other uses, and to provide greater support to small and medium-sized enterprises (SMEs) as an important way of stimulating the Greek economy.
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| Directorate-General for Economic and Financial Affairs |
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