Excessive austerity is stifling growth, yet the EU cannot simply spend its way out of the crisis, MEPs admitted in Wednesday's debate on efforts to revive the EU economy, held with a view to the Spring European Council starting on Thursday. Several groups also criticised recent changes made in Hungary's constitution and called on the Council to add these to its agenda.
EPP President Joseph Daul (FR) advocated stepping up investment in research, innovation and employment, but also warned against naivety about the EU budget, "as it cannot fix it all". He applauded the economic governance measures taken so far, including the "six pack", the European semester and the "two pack", and said that Europe needs more fiscal and social harmonisation as well as a cap on banker's bonuses.
Economic affairs Commissioner Olli Rehn should be replaced, as his economic forecasts were "constantly off target", said Stephen Hughes (S&D, UK), arguing that excessively optimistic economic forecasts had prompted the Commission to propose austerity policies that were proving even more damaging than expected. It is time to get real about the EU's economic health and change the approach, he concluded.
"We don't need less fiscal discipline but we do need a second track aiming at solidarity, growth, investment, eurobills and a redemption fund" said Liberal Group leader Guy Verhofstadt (BE), adding that "Greece and Spain are paying 5 or 6% interest, which means half of their efforts now go to bond-holders instead of giving a boost to the economy". He also called on Commission President Barroso and the Irish Council Presidency to raise the issue of Hungary's constitutional changes at the summit.
The EU's proposed long-run budget is not perfect, but it should nonetheless be accepted, said British Conservative Martin Callanan. On economic policy, he criticised "those who believe we can spend our way into growth", adding that "The underlying problems have not gone away and austerity cannot be avoided".
Green Group leader Daniel Cohn Bendit (FR) warned that too much budgetary discipline can suffocate the economy and drive citizens into poverty. On the long-term budget, he warned that the EU will no longer be able to pay its bills by autumn this year and criticised cuts in the education and innovation budgets. He also urged the Council to put Hungary's constitutional changes on the Council agenda.
Nigel Farrage (EFD, UK) said that the Euro was a "total catastrophe" and it was time to recognise this. He then switched to calling for a closure of the UK's borders to Bulgarian and Romanian citizens.
Gabriele Zimmer (DE) for the GUE/NGL, criticised the long-term budget proposal, saying that "each member state is fighting its individual battle". "How can the Youth Employment Initiative be financed if there are no resources in the budget?" she asked. On Hungary, she said "If citizens cannot protect themselves against states going astray, we shall see the EU fall apart".