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Getting the economy back on track - Jobs, growth and sustainability

Economic and monetary affairs 20-02-2014 - 14:16 / Updated: 13-03-2014 - 15:08
 
 

The European elections in May will offer people the chance to decide the direction the EU should take in the next five years as it moves towards a sustainable recovery of the economy. Ahead of this poll, the European Parliament organised a series of conferences on the economy, finances, jobs, the EU in the world and the quality of life. (Read more: Charting a way out of the economic crisis)

When MEP Alejandro Cercas set out to write a report about the impact of Troika policies in bailout countries, he wanted to hear directly from the people affected. Through the EP's LinkedIn discussion group, the Spanish member of the S&D group invited contributions, several of which made it into the draft approved by the employment committee on 13 February. Mr Cercas said these included suggestions for measures to tackle homelessness and a call to consult civil society on health sector reforms. (Read more: Troika: EP report includes measures suggested by ordinary people)

Will the threat of four years in prison deter bankers from abusing the markets for their own gains? On Tuesday 4 February MEPs will debate and vote on new rules agreed with EU countries. The new legislation aims to avoid new cases such as the Libor scandal in which global financial institutions manipulated interest rates, affecting consumers as well as companies. We found out more about the new rules from report author Arlene McCarthy, a British member of the S&D group. (Read more: Arlene McCarthy: "Member states will now have to make market abuse a criminal offence")

Could a tax on financial transactions help to discourage reckless financial speculation and ensure banks contribute more towards the cost of the crisis? Eleven EU countries believe it could and next week Parliament will debate and vote on the rules governing this tax. We spoke to Greek Social Democrat Anni Podimata, who wrote the opinion, about how to ensure that the tax works as intended. (Read more: How to make sure a tax on financial transactions pays off)

European deputies and their colleagues from national parliaments met at the European Parliamentary conference from 20 to 22 January in Brussels to mark the beginning of the annual EU national fiscal policy coordination cycle. Parliamentarians want to ensure that measures aimed at reining in budget deficits and public debt take into account how the measures will affected people. They also pointed out that austerity programmes for bail-out countries currently lack democratic legitimacy. (Read more: Parliamentarians call for more legitimacy in economic policy-making in the EU )

The best way out of the crisis was hotly debated in Parliament on 5 February with centre-left MEPs warning that austerity was holding back growth and their centre-right colleagues stressing that balanced budgets and the structural reforms were necessary steps towards recovery. To find out their reasons, we pitted two economic committee members on opposite sides of the issue against each other: Elisa Ferreira and Jean-Paul Gauzès. (Read more: Austerity vs growth: MEPs clash over best way to tackle crisis)

From 1 January 2014, EU banks will be stronger. Changes voted by Parliament on Tuesday will cap banker's bonuses to curb speculative risk-taking, step up capital provisions to help banks cope better with crises and stiffen supervision. This EU banking reform package, the most comprehensive so far, should also spur growth, by making it easier for banks to lend to small firms that drive the real economy. (Read more: Parliament votes reform package to strengthen EU banks)

The eurozone's biggest banks will be watched over by the European Central Bank (ECB) after the Parliament approved the establishment of a single supervision that is democratically accountable. However, MEPs already focus on the next necessary step for a banking union: a mechanism for dealing with failed banks. They want to protect small depositors by ensuring shareholders and big creditors are first in line to take a hit when a bank goes bankrupt. (Read more: Banking union: "I hope the momentum is not lost")

REF. : 20140217TST36225
 
 
How the Troika works
 

The Troika: How Europe's bailout power broker works

 
Parliament presses for more efficient bank supervision
 

Steps on banking supervision

 
100,000 EUR in deposits
Savings of up to €100,000 are guaranteed in the EU. Small depositors need not worry about losing them when their bank gets in trouble.
(Read more)
The Troika is doing a bad job by carrying out harsh austerity measures that hit the weakest Gianni Pittella (S&D, Italy) ECB: "Independence without democratic scrutiny is dangerous" (Read more)