8.10.2015   

EN

Official Journal of the European Union

C 332/8

Rapporteurs:

Mr Carmelo CEDRONE and Mr Joost VAN IERSEL

1.1.

Following 6 years of financial and economic crisis it looks more difficult than ever to predict the economic and social future. Given the geopolitical and economic challenges, only a solid EMU will ensure future-oriented stability.

1.2.

The EMU still remains fragile — see hereafter the diagnosis and the SWOT analysis. The EESC is of the opinion that persisting imbalances as well as creation of trust and confidence across Europe require more effective and democratic economic governance, notably in the euro area.

1.3.

The EESC realises that decisive steps cannot be taken overnight, but two elements have to be duly taken into account: (a) Europe cannot afford to put decisions off for years; and (b) a first prerequisite is an agreement across the euro area about the principles of necessary economic policies to be carried out by effective governance.

1.4.

In parallel to economic convergence, democratic legitimacy, a solid political framework, and a shared sense of common destiny are needed. To that end concrete steps can be undertaken within the framework of the current Treaty and rules. In the medium-long term a revision of the Treaty should bring the institutional provisions in line with the indispensable requirements of a real economic and political Union.

1.5.

We need a coherent system of the European Council, national governments, the European Parliament, national parliaments and the European Commission that reflects democratic legitimacy, accountability and transparency, and that is able to act effectively in the interest of citizens and economic actors.

1.6.

It has become clear that the current system of rules underpinning the EU, and particularly the euro area, has created confusion on the legal, institutional and democratic fronts. A new approach is therefore needed. Given the political and economic dynamic, the EU can no longer maintain its current institutional architecture. For this reason, the Committee deems it essential to deepen the process of integrating the euro area.

1.7.

With this in mind, the Committee would like to present a roadmap comprising the following steps:

2.1.

The EMU already has an extensive ‘acquis’. It has a shared currency and a central bank; to a certain extent, it ensures coordination of fiscal and economic policies; it issues binding decisions on countries, which, in principle, limits their economic and fiscal autonomy, imposes conditions on any expansionary measure in the Member States, and obliges them to undertake economic and social reforms.

2.2.

This means that EMU is a federation ‘in itinere’ that for the moment acts as a ‘guardian’, but does not yet act jointly. Its sense of purpose is stronger than elsewhere and has fostered a ‘public area’ of debate. EMU involves a greater ceding of sovereignty on the part of the Member States, although its management remains primarily under the control of a technocratic structure.

2.3.

This Union needs to be completed by creating the necessary conditions to ensure that countries that are part of it, or that wish to enter, can achieve not only stability, but also development and prosperity. It ought to be more advantageous for them to join the euro area than to stay out.

2.4.

The outbreak of the financial crisis in 2008 and its subsequent developments, together with the disastrous consequences for the real economy and European society, have provided a wake-up call for all those who believed up to that point that the architecture of EMU would continue to function more or less satisfactorily and that spill-over effects would harmoniously promote convergence between the Member States.

2.5.

Soon after the initial shocks, the European institutions began to find short-term solutions for the most urgent problems. The fact that mechanisms were installed to keep the EMU, the euro and the euro area intact has been a great achievement, while there were also delays and serious omissions, such as the lack of a common plan to foster growth and employment.

2.6.

It is also a great achievement that, under extremely difficult circumstances, productive steps forward have been made — at least partially — to establish firmer ground for the EMU. The EESC welcomed each of these steps, but also criticised their limitations and presented other ideas more suited to tackling the crisis.

2.7.

The financial and economic crisis turned into a continuing economic downturn with striking economic imbalances between national economies. Large parts of the EU are in a far from enviable situation of low growth and faltering employment 6 years later. The economic and social consequences speak for themselves.

2.8.

Notwithstanding all progress the EMU remains incomplete. The situation is very complex. Despite hopeful signs of recovery, economic stagnation and lack of jobs creation and poverty are prevailing in a number of countries, most of which is due to various deep-seated causes that have become more visible and accentuated during the crisis: history, traditions in governance (or the lack of it), diverging growth paths, different economic and social structures and different external policies.

2.9.

In the euro area a discord persists between protagonists of a stability union, driven by economic convergence and reforms in Member States, and protagonists of a straightaway fiscal union. This discord also leads to diverging views on which economic policies should be leading at national and EU level, both in politics and between social partners.

2.10.

Divergent views and practices have exacerbated a climate of distrust not only politically, but also among the general public in the various countries, however superficial mutual criticism may be. This development has become a self-fulfilling prophecy — it strips away potential manoeuvring room from policy-makers, and causes waves of EU-phobia among citizens.

2.11.

With the EMU primarily dominated by intergovernmental decision-making and technocratic management, lack of democratic legitimacy and credibility has a serious impact that also heightens contrasts between the partner countries.

2.12.

The EU is not an exception. Other large entities such as the US, China, Russia, India, and Brazil and a large number of smaller countries, also suffer from comparable difficult circumstances. But undeniably, the EU, and notably the euro area, has great trouble in overcoming obstacles in comparison to the US and the Asian continent (‘the Asian factory’).

2.13.

As a matter of principle the EESC believes that, although many different and intricate aspects shape the actual state of the European economy, more effective political management of the EMU should help significantly to create more stability in addressing current and future difficulties. In any event, a stronger EMU will be indispensable for safeguarding certain European key interests in the world.

2.14.

The EESC realises that definitive solutions are not within reach at the moment. It also realises that current dynamics, complexities and dilemmas are obstacles to a robust roadmap. On the other hand, current institutional and governance shortcomings cannot continue for another long period of time without lasting damaging effects to confidence and economic output. The EESC thus considers unacceptable delays, resignation and the absence of a plan for the future.

2.15.

Therefore the EESC believes that a serious debate on a well-founded architecture of the EMU, implying a consensus concerning economic and social objectives as well as agreed governance, is unavoidable.

2.16.

Since the inception of the EMU the debate on more or less European integration is about national sovereignty. The EESC underlines that this is a false paradigm, as national sovereignty is gradually fading away. In the current paradigm of globalisation and corresponding challenges it sees no feasible alternative to better anchoring of common or pooled sovereignty in the EU, and notably in the euro area. This will require solidly pooled economic governance or an economic government. In the same vein, the future of the EMU is thus closely related to other vital ‘sovereign’ policies such as the development of the Common Security and Defence policy and of an Energy Union.

4.1.1.

The fundamental challenges of economic and monetary union, involving a substantial transfer of national powers to the EU, are linked to its democratic dimension and in particular its parliamentary dimension, to the effectiveness of its decision-making system, to compliance with the principles of accountability and sincere cooperation, and to the transparency (visibility) of its way of working. In the EESC’s view, these challenges require a political union that restores and ensures public participation and the involvement of all stakeholders in European integration.

4.1.2.

Achieving political union is a process that should take place in stages. Certain conditions and measures could be put in place without the need for Treaty change. There are others that necessarily require a revision of the Treaties.

4.1.3.

The EESC recommends that, for reasons of accountability and cooperation, the means of participation that exist at national level, be duly applied also at EU level, including:

4.1.4.

In each State and across the EU, the issue of democracy constitutes a serious weakness (we need only consider the role of the Troika in the new system of economic governance). The relationship between representatives and those they represent continues to evaporate: a reality that has been highlighted by the crisis. Hence the urgent need to address this issue as part of the process of completing economic and monetary union across its four means or pillars of integration: banking union, fiscal union, economic union (which, in the Committee’s view, should include social union) and, finally, political union.

4.1.5.

In order to achieve that political union, starting with the countries that want it and applying the principle of differentiated integration, the EESC would suggest, in due course, taking the approach of the Convention, which would be tasked with finding solutions beyond the Lisbon Treaty. The EESC will undertake to draw up proposals for the effective participation of civil society in the work of such a Convention.

4.2.1.

The primary arena for representative democracy within economic and monetary union is the European Parliament, which includes members from the countries that have joined the single currency or are preparing to do so.

4.2.2.

The consolidation of representative democracy within EMU would not be complete if the method of decision-making were not to take account of the dual legitimacy — national and European — that is essential in the sui generis system that is the European model.

4.2.3.

In this political context, there will be a more favourable basis for closer cooperation and consultation between the Eurosummit and/or the Eurogroup — and, in this case, also the ‘pre-in’ countries — the EP and national parliaments. In line with the logic of the previous point, the ministers from the euro area countries and from those countries seeking to join the euro area could exercise legislative functions jointly with the EP, on matters relating to EMU.

4.2.4.

The Council action should be enhanced through the efforts of national administrations which must go hand-in-hand with this development, notably through the exchange of officials between them and by stepping up bilateral relations.

4.2.5.

The Committee points out that expanding qualified majority voting and, in time, abolishing unanimous voting, will facilitate the deepening of integration within political union.

4.2.6.

Thus, better structured cooperation and consultation within political union will enhance the effectiveness of policies in the key areas of EMU. The EU as a whole will duly benefit from this.

4.2.7.

As set out in the table in point 5, there are many things that could be done without Treaty change. For the majority of EMU policies, enhanced cooperation could operate directly between the countries; it would be better to assign to EMU a kind of permanent enhanced cooperation that would also enable action to be taken, more effectively, by the MEPs from the euro area countries and euro area candidate countries.

4.2.8.

The Committee suggests that it would be useful to revive the ‘Jumbo’ Councils within the Eurogroup, thereby opening up the possibility of regular dialogue between the finance, economy and social affairs ministers on the one side and the social partners and civil society on the other.

4.3.1.

After a transitional period, leading eventually to a Treaty change, an EMU governing body will take shape. Its president should to all intents and purposes operate as minister for the economy and finance for the euro area, with a role as vice-president of the Commission — similar to the position of the High Representative for Foreign Affairs and Security Policy.

4.3.2.

In the European model sui generis the European Commission (smaller and effective) will continue to play an essential role. The ‘community method’ and the current right of initiative of the EC also have a very special significance in deepening the EMU. This role should be assured in the political Union.

4.3.3.

The European Commission should maintain a ‘dual’ role, liaising between the EU and EMU until such time as an EMU Executive has been set up in its own right. Without prejudice to the current right of initiative of the EC, ways and means should be found to duly involve the EP in the process, in order to sustain the legitimacy of new legislative proposal.

4.3.4.

The EESC proposes appointing a permanent Eurogroup president, who could work best, directly in Brussels, with the Commission, EP, and national governments and parliaments. Following the method used by the Commission president Mr Juncker, a Commission vice-president could chair the Eurogroup meetings. He/she could thus represent EMU in international bodies.

4.4.1.

All this should make us more determined than ever to build up stronger, more constructive relations with the people of Europe and find ways of involving them in public life. Solid forms of consultation on specific matters involving social partners and civil society should be guaranteed, notably in the euro area, as these organisations play an important role in policy areas that are directly affected by EMU. They often also affect the outcome of policies at national level. At European level, the EESC can act as a civil society facilitator, responsible for organised civil society’s participation in the EU decision-making process, without any prejudice to the role of the social partners in the social dialogue, through:

5.1.

To achieve the four unions, in line with the report of the four presidents, and equivalent to the EESC’s four pillars (2), measures or policies in a range of areas could be carried out without Treaty change (1st column in the table below). Others would have to be decided on together at EU level (euro area), using a new decision-making method and new instruments, and using the enhanced cooperation provided for in the current Treaty (second column of the table) or by means of amendments to the Treaty or, if necessary, a new EMU Treaty (third column). Finally, the table summarises these stages and puts forward institutional proposals and preparatory initiatives regarding the political pillar of EMU (fourth column).

5.2.

Analytical framework of options for completing EMU (3)