Verbatim report of proceedings

Wednesday, 22 June 2011 - Brussels

16. Prevention and correction of macroeconomic imbalances - Implementation of excessive deficit procedure - Requirements for budgetary frameworks of Member States - Budgetary surveillance in euro area - Surveillance of budgetary positions and surveillance and coordination of economic policies - Enforcement measures to correct excessive macroeconomic imbalances in euro area (debate)

  President. − The next item is the joint debate on the following reports:

– A7-0183/2011 by Mrs Ferreira, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a regulation of the European Parliament and of the Council on the prevention and correction of macroeconomic imbalances [COM(2010)0527_–_C7-0301/2010 – 2010/0281(COD)]

– A7-0179/2011 by Mr Feio, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a Council regulation amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure [COM(2010)0522 – 2010/0276(CNS)]

– A7-0184/2011 by Mrs Ford, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a Council directive on requirements for budgetary frameworks of the Member States [(COM(2010)0523 – 2010/0277(NLE)]

– A7-0180/2011 by Mrs Goulard, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a regulation of the European Parliament and of the Council on the effective enforcement of budgetary surveillance in the euro area [(COM(2010)0524 – C7-0298/2010 – 2010/0278(COD)]

– A7-0178/2011 by Mrs Wortmann-Kool, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies [(COM(2010)0526 – C7-0300/2010 – 2010/0280(COD)], and

– A7-0182/2011 by Mr Haglund, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a regulation of the European Parliament and of the Council on enforcement measures to correct excessive macroeconomic imbalances in the euro area [(COM(2010)0525 – C7-0299/2010 – 2010/0279(COD)].

  Elisa Ferreira, rapporteur. – (PT) Mr President, in the view of the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament, the component of the economic governance package that deals with the Stability and Growth Pact is not the response that Europe requires at this time of structural crisis. The package does indeed revisit the Stability and Growth Pact, but not to change its essence. It revisits it to make its demands broader and its penalties tougher.

It would seem more useful to assume that the pact is impossible to comply with if a country’s economy is not growing and, in particular, if there is a crisis. These issues should be at the heart of the political agenda. We should discuss having a crisis management policy and its associated instruments in euro area countries and, on another matter, how to prevent the persistently divergent evolution of the euro economies from destroying the single currency. If these issues are not resolved, the pact becomes stupid, as someone said. There is, however, a glimmer of hope in the package: the new initiative to identify and correct the macroeconomic imbalances that build up, particularly in the eurozone, before they become insoluble problems.

Parliament wanted responsibilities as co-legislator and has carried them out to the full. The text on which we are going to vote reflects a broad consensus, which was only possible thanks to everyone’s huge capacity for work and spirit of compromise. As rapporteur, I wish to thank all my fellow Members from all political groups, particularly my shadow rapporteurs, and I pick out Mr Haglund especially, for whom I acted as shadow rapporteur as well.

The trialogue phase was long and hard, and the agreement we reached – sadly not a full one – was due to the Hungarian Presidency, represented by Minister Kármán, the Commission, represented by Commissioner Rehn, and all our partners. Let us speak plainly: identifying macroeconomic imbalances is a complex and completely novel process. Rather than merely applying sanctions, it is important to identify the risks competently, find out whether they are the country’s responsibility or whether they result from external impacts, and make correct, timely and practicable recommendations.

After the negotiating process, the scoreboard – that is, the set of indicators that have been negotiated – includes not only financial and nominal indicators, but also indicators from the real economy. We also trust that the Commission will scrupulously respect the compromise of recital 6-A, which involves Parliament alongside the Council in future review processes. Interpretation will also not be done automatically, but intelligently through in-depth reviews, which are demanding for the Commission but necessary.

The Commission’s recommendations will have to ensure consistency with all the other strategic documents, but the country will bear the main responsibility for proposing solutions to implement. Parliament’s enhanced powers, the greater involvement of the social partners and respect for collective bargaining practices have all been guaranteed. Penalties are justified in cases of lack of cooperation but not where countries are unable to meet the targets. They are also graded, which is an important aspect. We would have preferred to lighten the penalties, but we had to agree to them as part of the compromises.

Before agreement can be reached, there is one fundamental stumbling block: the recognition that in an internal market, in a monetary area, it makes sense that the variations in the scoreboard indicators should be observed whether they are positive or negative, and that both deficits and surpluses should be subject to observation, even though they obviously do not give rise to similar recommendations. All of us – individual Members, political groups and institutions – have come a long way. Agreement on a balanced, high-quality text is in sight. I just hope that the spirit of compromise that has brought us this far will carry us through to a final agreement.

  Diogo Feio, rapporteur. – (PT) Mr President, this is a further stage in an exceptional piece of work that we have been doing in the European Parliament. At this point I must warmly acknowledge Mrs Wortmann-Kool, Mrs Goulard, Mr Haglund, Mrs Ferreira and Mrs Ford, who have been rapporteurs with me throughout this economic governance package. I must also offer a very special word of thanks to the various shadow rapporteurs who have helped us in our work. Lastly, I must emphasise the exceptional work carried out by the Council on this issue, especially by András Kármán, who worked closely with us, and Commissioner Rehn, who also played an invaluable part in the whole process.

My first word is one of confidence, in a positive vein. This economic governance package must show that Europe is capable: it is capable of overcoming difficulties and it is capable of guarding against future problems. That is why I am highly confident about what is going to happen with this economic governance legislation in the coming days. In the Stability and Growth Pact, for which I was rapporteur for the corrective part, it is possible to add the idea of growth to that of stability and budgetary discipline. It is possible to innovate with the macroeconomic imbalance procedure. It is possible to go beyond an approach of merely having a penalty mechanism, and that is why adoption of this economic governance package will lead to more Europe and better Europe.

In relation to the corrective part of the Stability and Growth Pact, for example, this economic governance package has brought us a more intelligent application of the pact, through the attention it devotes to the debt criterion; the introduction of an average rate for debt reduction, to be carried out over three years, allowing for flexibility in fulfilling the rules; a more detailed and appropriate list of relevant factors that the Commission should take into account in its assessment of the financial situation of the countries involved; and the introduction of a three-year transition period for implementation of the debt criterion.

There are also other aspects that I want to highlight here, which concern other reports. Because we worked in conjunction all the time, I must mention the important introduction of a European semester regime in the preventive part, and point out that the preventive part is essential and that penalties should only be applied as the final step in this whole procedure. The procedure includes the introduction of symmetry in the analysis of macroeconomic indicators, the possibility that the Commission will produce a study on Eurobonds by the end of this year, an integrated vision of penalties as a final step in relation both to macroeconomic imbalances and to the Stability and Growth Pact, and the question of introducing reverse qualified majority voting for Council decisions. All these steps have been taken as essential parts of Parliament’s role.

That is why we can send our citizens a very clear message right now. The message is that we are preparing an institutional mechanism to prevent future crises. Europe will be much better prepared with this economic governance package. Europe is taking a crucial step with this economic governance package so that our economy can grow soundly.

  Vicky Ford, rapporteur. − Mr President, I would like to start by thanking the European Council. We can all see the incredibly sensitive situation in Europe and especially in the eurozone which has required different countries to work together in a way that has never been seen before. We can see the vital need to improve competitiveness and rebuild public finances in a sustainable manner.

Over recent days, weeks and months, we have constantly seen ministers from Member States coming together to try to help find ways out of each other’s individual problems. In addition, never before have I seen such a desire from members of the public to understand where public money is spent. So let me first talk about the directive that I have worked on.

The directive sets out a series of requirements in accounting statistics, forecasting and budgetary processes. Let us not forget that inadequate budget planning and inaccurate information compounded this crisis.

It is a Council directive, not a co-legislative report, and the Council has debated this extensively. Member States themselves have agreed that they will adopt fiscal planning horizons of at least three years to include all levels of government and government funds in their budget processes and ensure that information on, for example, contingent liabilities is disclosed. Accounting and forecasting performance will be independently evaluated.

Let me say that many of the Member States already comply with large parts of this directive, but implementing this minimum series of requirements will introduce discipline and restore confidence, and is a first small step back on the path to stability in public finances.

In addition, Member States themselves have agreed that they will each introduce their own legislation on fiscal rules – not necessarily German constitution debt breaks – but rules tailor-made in each country to keep them in line with their obligations under the Treaty. Now this is sensitive as well because different countries have different obligations under the Treaty and for that reason that section does not apply to the UK.

During the negotiations on the wider ‘six pack’ a number of suggestions for improving this Council directive were made, many by the European Central Bank and by Members of this House. The Council has worked in good faith to try and improve the directive where appropriate and improve transparency, but without stepping on the sensitive issues relating to individual national constitutions.

Briefly on the other directives. Through these negotiations I have tried to be constructive in allowing euro zone Member States in particular to set up what rules and sanctions they see necessary to underpin their stability. I have not supported colleagues who think the solution is just a stronger role for the European Parliament.

Over the weekend and on Monday night, the Council tried to offer a final compromise on an outstanding issue of votes in the European Council. Whilst this is not, in my opinion, a deeply significant issue in my own Member State – as we do not intend to join the euro and resulting fines do not apply to us – it is an extremely difficult and contentious issue in many countries, including those who intend to join.

This is a time to try to understand each other’s problems but also respect each other’s differences. Earlier this week I warned colleagues that heading into a direct confrontation between Parliament and the Council on an issue that I did not believe I could explain to any man on the street would not be a responsible position of this Parliament. Indeed, I said I thought it would be irresponsible.

And this Parliament’s approach on that issue is not supported by many of my group’s members. I cannot support Parliament’s changes to the Council text on the macroeconomic imbalances and I would like to see in the weeks ahead more clarity on the different positions between euro zone and non-euro-zone Member States.

  Sylvie Goulard, rapporteur. – (FR) Mr President, we have had countless trialogue meetings, some late at night, with other Members, the Commission and the Hungarian Presidency. I would like to begin by thanking my fellow Members and our counterparts for the work that we have completed together.

The message from the Ecofin Council is that everyone needs to shoulder their responsibilities. My immediate reaction is to say: ‘All right, then, let us genuinely face up to our responsibilities.’ Not with a huge fanfare, not so as to be able to say that we reached an agreement rapidly, but with an eye on the financial problems in the euro area and the European Union and in an attempt to come up with some proper solutions. Certainly, that was my group’s motto in these negotiations. I doubt that the markets and our citizens would believe in speedy but superficial solutions.

In our estimation, substantial improvements are needed. We have, I think, already achieved some of the objectives that we set ourselves. Let me remind you that we are not the only ones with these aims: on several occasions, the European Central Bank has called on Parliament to beef up the Commission’s already bold proposals. We have therefore firmed up the rules. That was one of our guiding principles: not for the pleasure of rule-making, but because breaking common rules in a community based on the rule of law endangers the single currency. We have introduced penalties for fraud. Unfortunately this is one of the lessons that we have had to learn from the euro’s early years. As Mrs Ford said, we have also tried to impose a degree of order on national budgetary procedures, if only so as to be able to compare practices in different countries. One point was particularly important to me: if we go to our citizens with nothing to say other than ‘we have increased automaticity’, as the newspapers are putting it, they will be left with the impression that some mysterious machine has been turned on in Brussels and will rap them on the knuckles whenever something goes wrong.

If we want stricter rules, they need to be more intelligent, but above all we need more democratic debate and more cross-border discussions. This is why we have proposed – and I would like to thank all the Members who have supported me on this point – creating what we have termed an economic dialogue, which must be proportionate. There is no threat to national constitutions; it is simply an expression of our desire for more discussion within the euro area in particular, but also in the Europe of 27. We want this House to be the forum for that transparent dialogue between the European institutions and the Member States, and in particular a place where Member States can voice their problems and explain their positions. Some countries are lagging behind, others are further ahead, some are on the fringes, some have larger populations: we need to bear all that in mind. I am delighted to see that this week in the German media Mr Habermas has again stressed that increasing democratic legitimacy is a vital necessity. I would say to Mrs Ford that we are not arguing in favour of enhancing our powers, we are calling for a greater role for those mandated by the people to defend their interests in Brussels.

There are other important points, particularly on the macroeconomic side. I believe that all Member States need to be subject to common surveillance. Symmetry is an important issue. The Council should understand what this means: intelligent symmetry that distinguishes between deficit and surplus, but symmetry all the same.

Let me close by mentioning Eurosecurities, which were one of the things that I championed. I would like to make an appeal to all political group leaders: you cannot claim to support Eurosecurities but vote against them. You might argue that you want more, I myself would have liked to go further, but I do fully appreciate the efforts that Commissioner Rehn is willing to make. Let me remind you that the Commissioner himself put forward proposals in May 2010 in accordance with the Commission’s legislative initiative. We want to put those proposals back on track.

We want the euro finally to take on the mantle of a world currency, we want a large and liquid market, which will reduce the cost of borrowing. We want part of that borrowing – a limited amount, of course – to be shared in the long term using a full-blown market regulatory instrument. Consequently, I hope that tomorrow’s vote will be favourable and that all those who claim to be in favour of Eurosecurities will discuss the issue in a spirit of open-mindedness rather than based on ideological prejudices.

  Corien Wortmann-Kool, rapporteur. − (NL) Mr President, if one thing is clear, it is that Europe needs a solid foundation in order to prevent a new euro crisis in the future and to ensure sustainable economic growth. Our group, the Group of the European People’s Party (Christian Democrats), is satisfied with the results we have achieved so far in the legislative package on economic governance. I would like to extend my warm thanks to all the Members, rapporteurs, shadow rapporteurs, employees, staff and everyone for the many hours we have spent together in order to achieve this because, in exercising its powers, the European Parliament has taken a firm and ambitious position. I would like to thank the Hungarian Presidency, and in particular András Kámán, for the efforts put in to bridging the differences between the Council and Parliament. Indeed, you personally have made it possible for us to reach a 98% agreement, partly thanks to the helpful support of Commissioner Rehn and his staff. This is an excellent result, but it was not an easy one to achieve.

Tomorrow, we will be voting on the reports. My group is strongly committed to building on the high level of agreement that we have reached. I hope that we will be able to bridge the last differences over the next few weeks so that we can finalise an agreement before the summer. This is very important, because my group is striving for a final vote in the plenary in July.

The turmoil in the financial markets continues and we urgently need to find a solution to the debt crisis in several countries. However, it is just as urgent – and therein now lies our task as co-legislator – that Europe demonstrates strong decision making in terms of an ambitious stability pact and economic governance. Reaching a decision before the summer is crucial to restoring confidence in the euro, given that the Stability and Growth Pact was being broken as early as 2003. Instead of the rules being enforced, they were simply liberalised and we now need to put a stop to that. This is about credible legislation, not behind-the-scenes negotiations between Member States aimed at avoiding penalties. If Member States fail to take effective action in order to meet their commitments and reduce their deficits – and these are commitments, remember, that they have undertaken of their own free will – then decision-making must be effective. That is why this House has proposed the reverse voting procedure.

Let us face it, the magic formula of our fellow Members on the left, the golden rule, will not deliver the solution. Unfortunately, money does not grow on trees and the days of easy solutions and painless choices are now behind us. That is why the PPE Group is calling for sustainable public finances and for 5 or 6% budget deficits not to be permitted. A debt burden – the painful evidence of which we are witnessing – stands in the way of economic growth, not only in our European countries, but also in the United States.

We need a solid foundation, and that is why I am pleased that the Council will exercise the preventive arm of the proposals, namely to ensure that Member States strengthen their own national responsibilities and involve their national parliaments in the process, clear deadlines, procedures and inspection visits, more public reports, peer pressure and public debates in this House rather than in the confines of the Council. Obviously, the European semester is an important achievement, because we want jobs and growth.

We are facing an important and historic day. Tomorrow, in the House, we will stand ready to shoulder our responsibilities. I see that the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament and the Group of the Greens/European Free Alliance want to put a spanner in the works. It seems that they only want to work in a spirit of compromise when it comes to their own reports. Mr President, that is no spirit of compromise. I would like to call on all Members who consider sustainable public finances important to support these six reports tomorrow. They are not the final outcome, because tomorrow we will be taking a step towards consulting with the Council on how we can clear these last hurdles on our way to – what will hopefully be – an agreement in July.

  Carl Haglund, rapporteur. – (SV) Mr President, I believe that the events that we have been able to follow this week, both in the Council and in those countries that are wrestling with very serious economic problems, once again show us why the package we are now debating is so important. If we do not manage to make headway on these matters, the problems are more likely to continue rather than be resolved. I also believe that it is important to remember what happened in 2005 when we ought to have taken action and demonstrated that it is not all right to contravene the common allocation clauses. We did not do that; instead we changed the rules. Now it is time to rectify this.

This package is important. I would like to say a big thank you to my fellow Members. We worked hard together. As has been said many times, we are very close to achieving the goal, but at the same time it is important that we are successful in the voting today and in July. I would also like to thank Mr Kármán from the Hungarian Presidency, who has done a splendid job. We really appreciate what he has done. As I said, I would also like to thank my fellow Members, and Mrs Ferreira in particular. We have done an excellent job in creating a macroeconomic surveillance procedure, which is something new and which complements the work that is done to keep the common currency afloat. That is something that Europe needs.

Going back to 2005, the European Parliament is still demanding that we find a solution with regard to what we refer to as reversed qualified majority voting. Why is that? It is because we have found that if we do not have an adequate automatic decision-making system in the Council, the necessary decisions do not get taken. We cannot afford for this to happen any longer. In this regard, we still have an unresolved issue, but I hope that the Council will manage to hold a serious discussion on what this is actually about. The European Council is meeting on Thursday and Friday. It must not be the case that, for reasons of prestige, no decision is taken on something that everyone knows is necessary. Nor must it be the case that certain larger Member States think that they can agree in advance on certain matters, so making it a ‘done deal’. The Council must take genuine decisions and the legislation must be decided on in consultation with the European Parliament. The Council now has the opportunity to take wise decisions, and I am sure that the European Parliament can help it to take the right ones.

With regard to the macroeconomic element, I would firstly like to emphasise that, thanks to the work that we have done in Parliament, we have a proposal that we have agreed on with the Council and one that is sufficiently transparent and also contains a solution that is sufficiently automatic. I believe that this solution means that we will also be able to feel secure in future with regard to the euro area and to the possibility of remedying the sorts of economic problems in an individual country that could otherwise result in the whole of the euro area being put at risk. I think it is good that, in our report, we establish a system for dealing with countries that fail to fulfil their commitments, in other words a requirement for the problems to be remedied directly. The first time a promise is broken, the country will be forced to pay an interest-bearing deposit, as we have called it. This is necessary. We cannot send out a signal to the effect that if a country promises to do something in particular, but then fails to do it there will be no consequences. Unfortunately, that is what the original proposal was like. I am pleased that we were able to rectify that. This is an important matter of principle. At the same time, we have also got to grips with the problem of fraud, where other countries are deceived. This is also extremely important. I think that the European Parliament has done a good job in this regard.

As several speakers have said, tomorrow’s vote is a very important one, and I believe that it will go well. I hope that, at the end of this week and through the following week, the European Council will be able to have a serious discussion about what we can do to reach an agreement. That is something that we will also do in Parliament. Then we can have the legislation that Europe so badly needs. That is crucial if we are going to be able to continue to have a common currency.

  András Kármán, President-in-Office of the Council. − Mr President, before I go into the substance, I would like to express my sincere appreciation to the Chair of the Committee on Economic and Monetary Affairs, the rapporteurs, the shadow rapporteurs and all representatives of the political groups who actively participated in the process for all their valuable contributions. I am equally thankful to the Commission, and the Commissioner himself, for their efforts to facilitate discussions, not only during the trilogues here in Parliament but within the Council too.

The six legislative texts on economic governance have been the number one priority of the Hungarian Presidency. I must emphasise that it was not the individual decision of the Presidency to designate this file as the top priority. The Commission’s initiative has also been supported by the Heads of State and Government of the 27 Member States. If we want to build a stronger euro, this governance package is an essential building block in that process.

The world economy, including Europe, has experienced the worst crisis since the Great Depression and we have had to draw the necessary conclusions. We have to realise that the shock would have long-lasting effects unless we eliminate the core roots of the crisis. Many of the lessons to be learned are addressed by the six legislative proposals put forward by the Commission last September. More emphasis will be put on prevention in order to avoid the need for harmful procyclical policies in bad economic times.

So far the Stability and Growth Pact (SGP) has concentrated on deficit but this has not prevented the accumulation of high debt, so from now on more attention will be paid to the debt criteria. The lesson was learned that procedures have not been stringent and automatic enough. That is why we are also addressing these questions here, in order to strengthen the credibility of the Pact. We have also realised that coordination of fiscal policies through the SGP might not be sufficient in a Union sharing a single currency so we have agreed to introduce a new mechanism to tackle macroeconomic imbalances, which will be treated on the same footing as fiscal imbalances.

In order to better and more deeply reflect the requirements of the Treaty in national procedures of Member States, we are about to adopt rules improving the quality of national budgetary frameworks.

I am confident that the objectives of both Parliament and the Council are the same, namely to strengthen the economic governance of the EU and the euro area, prevent future crises and build a stronger framework for economic governance in the euro area and the EU as a whole.

After an intensive round of trilogues with the rapporteurs and discussions at the Council, the Council modified its general approach on Monday. The result of this process was communicated to the European Parliament by a letter sent the next day, 21 June. I share the view that during the trilogues the quality of the text has improved a lot, and that the package has become stronger and more coherent. This is especially the case in terms of increased transparency and accountability and the more stringent and automatic application of the procedures.

Firstly, let me mention the major elements as regards increased transparency and accountability. We are to describe the European semester in the legal text including the ample involvement of Parliament in the process. We have added provisions specifying the process of economic dialogue among European institutions including the European Parliament, the Council and individual Member States. The European Parliament would be involved on the same footing as the Council in the setting up and functioning of the scoreboard of indicators for an alert mechanism in the prevention and correction of macroeconomic imbalances. Regarding the governance cycle and the surveillance procedure, we fully respect the very important role of relevant national stakeholders, including social partners.

Secondly, turning to the issue relating to a more stringent and automatic application of the procedures, let me mention the following: an additional sanction, an interest-bearing deposit for Member States in the excessive imbalance procedure, would be introduced. This has been a missing link in the procedures and it completes the procedure in a very logical way, similar to that provided for in the budgetary surveillance. An additional fine for Member States falsifying their fiscal statistics is also provided for, at the initiative of the Parliament. The application of reverse qualified majority voting is expanded to the recommendation on prevention and correction of macroeconomic imbalances. Moreover, in the preventive arm of the Stability and Growth Pact, we make provision for a review of the expansion of reverse qualified majority voting. At the same time, the already existing comply-or-explain procedure would be enhanced. In deciding on the staff in the SGP, the Council is expected, as a rule, to follow the recommendations and proposals of the Commission or to explain its position publicly.

The Presidency believes that the compromise reached during the trilogues reflects a good, balanced and comprehensive approach. We think that all parties have a strong interest in reaching a swift agreement. I regret that the proposal put forward to the plenary is different from the compromise we arrived at after a series of negotiation rounds and does not take into account the final compromise offer of the Council. At the same time, I am grateful for your wise approach that the Parliament still leaves open the possibility to have a first reading agreement shortly. It is high time that Europe joined forces and the Union is ready to live up to expectations. All the markets and investors are vigilant and would like to see whether we can deliver or not. The swift and timely adoption of the package is a must for all of us.

  Olli Rehn, Vice-President of the Commission. − President, honourable Members, let me first thank the Chair of the Committee on Economic and Monetary Affairs Sharon Bowles, rapporteurs Corien Wortmann-Kool, Elisa Ferreira, Vicky Ford, Sylvie Goulard, Diogo Feio and Carl Haglund, as well as the shadow rapporteurs who all played a major part in the negotiations. The Chair, the rapporteurs and the shadow rapporteurs have all represented this House with great distinction.

I also highly appreciate the outstanding role played by State Secretary András Kármán, who represented the Hungarian Presidency with such skill and determination. And I dare to say that I am very proud of my team in the Commission and I will thank them once we have reached the destination, with your help of course.

I warmly welcome the texts that you have finalised. In the course of the trilogues, Parliament’s negotiators have improved the Commission’s proposals in many important respects. And you have gained a good many important improvements from the Council.

The Commission supports the texts which you are about to vote on, and we can welcome and agree on all of your amendments. As we know, the Council agrees with almost all of them. But it did so with some exceptions which present quite a challenge – let me come back to that in a moment.

There is no time to set out all the gains made by Parliament in these negotiations: my staff have made me a summary list of no less than 50 major improvements won by you.

For instance, you have codified the European Semester, you have set up a structured economic dialogue, providing for a prominent role for Parliament throughout the European Semester. You have achieved the opportunity for detailed discussion of country-specific situations at every key decision-making stage of the policy cycle, including confirmation of Parliament’s right to initiate dialogue with individual Member States. In all parts of the legislation you have won a better information flow to Parliament and more transparency. You have got a commitment from the Commission to do a study on euro securities within six months of the entry into force of this legislation. This will be accompanied by a Commission declaration, the text of which you have seen, setting out the scope for that report. I will come back to that as well. The Commission will also commit itself in this declaration to reviewing the intergovernmental nature of the European Stabilisation Mechanism by mid-2014.

You have got reverse qualified majority voting in a number of important cases – to improve the automaticity of decision-making – as the rule in the corrective arm of the Pact, where 24 Member States out of 27 now find themselves unfortunately. You have also won an equal role for Parliament in determining the scoreboard for detecting possible macroeconomic imbalances, and you have inserted firm guarantees on social dialogue, respect for national traditions on collective agreements, wage formation, and the role of social partners, which we fully share.

There are going to be tough fines for statistical fraud and guarantees of independence for national statistical authorities. You have introduced earlier sanctions in the excessive imbalances procedure. I could go on and on.

In your first legislative encounter with Ecofin as a co-legislator in economic policy, you achieved almost all of your most important objectives. This is a very good result for Parliament and for Europe.

On euro securities, in the context of this package I will only confirm what I said at the trilogue on 15 June. The Commission intends to present a report to Parliament and the Council on the setting up of a system of common issuance of European sovereign bonds, or euro securities, under joint and several liability, in line with Article 8a(5) of the regulation on the enforcement of budgetary surveillance in the euro area and within six months of the entry into force of that Regulation. These euro securities would aim to strengthen fiscal discipline and increase stability through markets as well as, by taking advantage of the increase in liquidity, ensuring that the Member States enjoying the highest credit standards would not suffer from higher interest rates. The report will, if appropriate, be accompanied by legislative proposals.

In other words, in our view such a report on euro securities goes hand in glove with and only makes sense with the prospective reinforcement of economic governance in line with this package now under deliberation.

Let me say a few words on the next steps. I am worried. Should the package not be agreed, neither the Council nor Parliament should think that they can successfully shift the responsibility onto the other. That will not work. People watching the decision-making from outside are not interested in the smallest detail. If we fail – and I say we and I really mean us all – they will simply say that ‘Europe’ has failed. Europe would fail and people’s trust in the capacity of Europe to address their real problems would suffer a huge blow.

Moreover, neither institution should imagine even for a moment that – whether for tactical or substantive reasons – they might get a better deal in the second reading. The Presidency has very skilfully extracted compromises from the Council that would most likely not appear on the table again if a first reading agreement could not be achieved.

Actually only one issue remains open: the scope of reverse qualified majority voting. I believe you are all aware of the efforts we have made. The Commission supports reverse qualified majority voting. So does the ECB and a number of Member States, but not all of them and not in all places. The Council has already agreed to reverse qualified majority voting in five out of six decisions where it is legally possible. On the remaining one, there is a disagreement between Parliament and the Council. I believe a solution can and must be found. Therefore I appeal to you to seek a constructive solution on the remaining point in the next few days and I appeal to the Council too, to respond with a constructive approach on their part.

I can reassure you that the Commission will work until the last minute, the last second, to find a satisfactory solution. Reinforced economic governance in Europe is simply too important to fail on this final remaining issue.

Let us recall that the Council is about to sign the treaty on the European Stability Mechanism (ESM) which focuses on correction. But the ESM will only complement the new framework for reinforced economic surveillance, which focuses on prevention and is of primary essence because it will substantially reduce the probability of crises such as we have experienced emerging in the future.

Let me conclude with a simple message. If there is no agreement this week and no vote by the latest in July, it will be a very bad deal for Europe and for Europe’s citizens. And it would only result in frustration, bitterness and a worse outcome for everyone if we must come back to these files in September.

You have agreed on 99.9% of the substance. I now ask both sides to go the last few centimetres to reach an agreement with the other. It is of paramount importance, since this package really is the cornerstone of our comprehensive response to the crisis that is still ongoing. It is absolutely crucial for the credibility of the European Union to conclude the package before the summer break, and then move on and put it into effective use.

  Pervenche Berès, rapporteur for the opinion of the Committee on Employment and Social Affairs. – (FR) Mr President, President-in-Office of the Council, Commissioner, ladies and gentlemen, I would like to make three groups of points on behalf of the Committee on Employment and Social Affairs.

The first is that as we adopt this economic governance package, we must ensure that the whole of the Treaty of Lisbon is taken into account. According to the Treaty, taking into consideration objectives concerned with promoting a high level of employment, guaranteeing adequate social welfare and combating social exclusion is a cross-cutting aim that applies to this economic governance package also. If I may say so, I sometimes get the impression that this aim has been relegated to a secondary priority.

This is why the Committee on Employment and Social Affairs was keen for the whole package to be based not only on Article 121 of the Treaty, which deals with the coordination of economic policies, but on Article 148 also, which deals with employment policy in terms of coordination between the responsibilities of Member States and the European level. This is also why we feel that within the Union, the role of the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) must be firmly guaranteed, on a par with that of the Economic and Financial Affairs Council (Ecofin).

For if – and this brings me to my second group of points – in revising the Stability and Growth Pact our only objective is the kind of governance that will satisfy the rating agencies, then we will be missing an important opportunity in the history of our economic and monetary union. History calls us today to take a much more overall view and to look closely at the purposes for which this economic governance is being put in place.

Of course we need to reduce debt, but we also need to ensure that this economic governance helps to guarantee the success of the Europe 2020 strategy. In this respect, we believe there are other approaches that could have been used. Commissioner, why is it that only spending on pensions can be given special treatment in your assessment of Member States’ medium-term budget objectives? Why is it that this special treatment cannot also be given to the investment in the future represented by spending on education, or the spending we need to undertake to combat social exclusion, a goal that you set and that we included in the Europe 2020 strategy? Why is it that these aims and this kind of approach are not also applied to spending on research and development or infrastructures?

My third group of points relates to how macroeconomic surveillance is conducted. We consider it to be an essential outcome of this package, but this means it must be applied symmetrically. Ultimately, for us here in the European Parliament, there is a fundamental issue at stake. Mrs Ford spoke of it as a power struggle. It is not a power struggle, it is a question of democracy. If we want there to be European economic governance, there needs to be a space for public debate and for European democracy, in order for this European economic policy to work. In this respect, I have to say that your refusal and that of the Council to allow the European Parliament to participate in establishing macroeconomic indicators through delegated acts does not seem to me to be the right approach.

  Sari Essayah, for David Casa, rapporteur for the opinion of the Committee on Employment and Social Affairs. − Mr President, Mr Casa has asked me to speak on his behalf because he is not able to be here at this time.

Many of the amendments from the Committee on Employment and Social Affairs have been taken into account by the six-pack rapporteurs. We are sending the message that a society can only have a healthy economy when its members are able to contribute fully to its development. A healthy economy is the basis for a good level of employment and social policies, and vice versa, a good level of employment and social policies are preconditions for a healthy economy. Those Member States which had the most prudent fiscal policies and growth strategies are now performing best. This is the proof that fiscal stability leads to growth and employment.

We need to respect the rules of the Stability and Growth Pact. It is essential to achieve growth and jobs and to prevent the debt burden being placed on our children and future generations. We have to understand that every euro used in paying interest on the public debt is one which does not go towards investment in education, social security and other fields that provide a necessary environment for the good development of the economy and for the well-being of the people. Therefore it is essential that our indebtedness in the Member States is reduced as soon as possible.

  Herbert Dorfmann, on behalf of the PPE Group. – (DE) Mr President, ladies and gentlemen, there are undoubtedly many reasons for the economic situation in which we currently find ourselves in the euro area and in the European Union as a whole, but two stand out in particular. Firstly, we were basically far too late in realising the direction in which Europe was sailing. Secondly, when we did realise it, the Council in particular refused for a long time to initiate the necessary measures – which are actually provided for in the Stability and Growth Pact – or to impose the necessary sanctions. To put it bluntly, it simply failed to pull the ripcord.

The new regulation on macroeconomic surveillance should deal with these two problems. Firstly, the completely new system it provides should enable us to recognise macroeconomic imbalances at an early stage; and secondly, we should then be able to act quickly. We have developed a good scoreboard, albeit through long discussions. I should very much like to thank the rapporteur, Mrs Ferreira, for her positive cooperation in this connection.

We need to ensure that immediate measures are taken to counter imbalances. That is precisely why it is necessary for a mechanism to be developed here that cannot be politically torpedoed. That is why the use of reversed qualified majority voting is so important and so fundamental for Parliament.

If we want to implement the instrument efficiently, this naturally represents a transfer of powers from the national capitals here to Brussels. That is more than likely necessary anyway in an economic and monetary union. Only when the citizens of Europe see that we are now acting effectively, that we have learnt from the mistakes we have made, will we be able to regain the trust that has currently been lost.

I can assure you that my group will be supporting the Ferreira report tomorrow.

  Stephen Hughes, on behalf of the S&D Group. – Mr President, you will not find many members in this room who disagree with the need to drag down debt and deficits to reasonable levels in the years ahead. My group certainly takes the view that we need to do that.

This is not about political confrontation between fiscally virtuous or fiscally irresponsible Members in this House. The division between you and us and between progressives and conservatives here in the House is about how we return to sound public finances, at what economic and social cost, at what cost for the future ability of Europe to compete in a global market. You stick to the idea, Commissioner, that there is no alternative to your austerity-only agenda. We think that this is very wrong. In our view, your approach and that of the right-wing majority in the Council pose the biggest threat to the very future of the European idea because they are destroying the notion of belonging to a community, the notions of solidarity and cohesion.

The vast majority of the millions who have lost their jobs during this crisis are unemployed still today. What message does the Council and Commission have for them? Or for the millions whose jobs are in jeopardy or who are living in poverty? What message for the hundreds of millions of people who are suffering as a result of cutbacks in public provision, in healthcare, in education? What message for them? What message from the Council this week? Well, I expect nothing quite frankly, nothing.

This week’s Council will not produce a single ray of hope for hardworking people, for the unemployed or the young people who are hurting so much. They have been unfairly and severely hit by the crisis that was not of their making and now they will be hit again to repair the damage they did not cause.

Your political and economic agenda is totally unacceptable to us on this side of the House. Throughout the legislative process, we have suggested sensible and balanced amendments to the Commission’s proposals, we have proposed firmly connecting national reform and stability and growth programmes using the first as a solid vehicle for the necessary promotion of public investment We made proposals to maintain sensible levels of productive public investment and we have proposed making the new rules clearly anti-cyclical. I could go on, but the reality is that today’s economic and social agenda has been hijacked by the right. There is not even space for moderate political approaches, let alone more progressive ones.

And please, Commissioner Rehn, do not tell me that these policies I am denouncing are being pursued by socialist governments. You know, at a time when even the strongest economies in Europe need to bow to the demands of an irresponsible and increasingly dangerous financial sector, that no Member State can change this agenda alone.

In the end, I wonder who will benefit from the decisions that will be made this week. It seems to me that the only people who will benefit are those who have caused the whole mess in the first place, the financial sector, and I think that is a disgrace.

  Sharon Bowles, on behalf of the ALDE Group. – Mr President, so far we have found agreement on almost all of the package and have demonstrated that codecision is working, with thanks to the hard work of the Hungarian Presidency and of course to András Kármán in particular, and to the Parliament negotiating team and the Commission.

The Presidency and Commission have already highlighted numerous – I think it was 50 – Parliament additions. These include a legal framework for the Semester and surveillance of national reform programmes, independence of national statistical offices and fines for fraud, Commission surveillance missions, an economic dialogue between all stakeholders, and substantially greater transparency throughout.

We cannot conceal, though, that there have been significant differences in the negotiation of the package. For my part, I do not see this as political grandstanding but rather the search for ownership, to enable ownership by the people. What divides us in Parliament differs from our issues with the Council but, however difficult it may be, we have to stand up to our democratic duty. It is this House that will confer ownership.

Some prefer intergovernmentalism. Given that the agreed text is acknowledged as better than the Council general approach, this does not make sense. Nor does it make sense in the search for ownership – so distinctly missing in much of the response to the crisis and so much a consequence of intergovernmental decisions. From the realisation that the Stability Fund facilities had to be larger, to recognising the fact that punitive interest rates do not give sustainability and the chance to return to the markets, this House has not been afraid to lead and the Council has followed.

We are stronger when we work together and I believe the final differences can be resolved.

  Ivo Strejček, on behalf of the ECR Group. – (CS) Mr President, the package of six proposals intended to improve discipline within the euro area is based on the belief that the Member States will comply more rigorously with the newly created and stricter architecture for supranational surveillance. I regard it as problematic to think along these lines, particularly since some Member States have been incapable of following the less stringent rules to date, and effectively enforcing their implementation. I would like to mention four points which I consider controversial.

The first is reverse qualified majority voting, which has already been referred to many times in this Chamber. We regard reverse qualified majority voting as an instrument to be used in exceptional cases, the use of which must always be explained properly and thoroughly, with proper checks carried out to ensure that its use is consistent with primary law.

We do not agree with the increase in the number of areas subject to surveillance procedures for which the use of reverse qualified majority voting is proposed. The proposed approach will increase the political power of the Commission and the European Parliament to the detriment of the Council and the national authorities, which is not what we want.

With regard to surveillance missions, I have serious reservations concerning the proposal for such missions, since they will be composed mainly of European Commission officials and will have significant powers entrusted to them, without the members of these missions having any political mandate. This is a fundamental reservation. People who are not subject to public control by voters, however good their intentions may be, cannot carry out surveillance over the heads of national political bodies or the highest national institutions.

The scoreboard, which attempts to draw up a list of macroeconomic indicators at supranational level and, based on this list, to assess the ability of national authorities and their economies to deal with economic imbalances, is a contentious idea. The current situation in Greece is a good example of the fact that solutions to a situation dictated from outside provoke opposition from the country’s inhabitants, and are one of the causes of escalating social tension.

  Philippe Lamberts, on behalf of the Verts/ALE Group. – (FR) Mr President, the Greens want economic governance. Not just to please people, not so that it will make a nice photo, but simply to give the European people instruments, by building on the euro, that will enable them to meet the challenges of the 21st century, in other words to ensure a decent standard of living for everyone, not just for the happy few, and to do it within the planet’s physical limitations – and this is what is new, of course.

In this respect, we support these reports on the budget frameworks and the macroeconomic component of the ‘economic governance’ package. We are satisfied with all the indicators that have been selected, even though we would have liked one of them to have been income inequalities, as they are a very clear sign of both a poorly functioning economy and a poorly functioning society and should therefore act as a warning sign.

However, our agreement on the macroeconomic component is conditional upon maintaining a symmetrical approach, and this is a point I make to the Council. In other words, we believe that all the Member States should be in the same boat, whether they have a current deficit or a surplus, for example. There is no reason why we should apply favouritism, as one country’s surplus is another country’s deficit.

As regards the Stability and Growth Pact, we cannot accept an instrument whose only outcome is and will remain austerity, austerity and more austerity, in other words which will result in making only the most vulnerable in our societies pay for the economic crisis.

We wanted balance, not by having less budget discipline but by combining it with disciplined investment. Our proposal was to make the goals that Europe set itself with the EU 2020 strategy not only binding, but as binding as each other and as binding as the rules on the budget or on deficits. I am disappointed that a majority could not be found in this Parliament to finally back this strategy and take it more seriously.

We might have agreed to vote in favour of this stability and growth package unchanged had it been accompanied by an ambitious fiscal package, combining a financial transaction tax, an energy tax, a fair tax on transnational corporations and, of course, measures to combat tax fraud, so that we could help the Union’s Member States fund the goals they hope to achieve. However, there was not the slightest sign of this. There is absolutely nothing in the pipeline, despite the declarations that Mr Barroso has made again today.

I say this to the right: you chose to form a narrow majority with the eurosceptics, as you were free to do, in order to create a form of economic governance which I can tell you now is unfair and will be ineffective.

We will see what happens, therefore, either in this Parliament when your pact with the eurosceptics has fallen through, or at the polls in France in 2010 and in Germany in 2013, where I think the voters will agree with us.

  Jürgen Klute, on behalf of the GUE/NGL Group. – (DE) Mr President, ladies and gentlemen, we, too, call for economic governance in our programme for the European elections in 2009. However, the ideas that we on the left have of economic governance differ from those contained in the economic governance package that is currently on the table.

For us, economic governance means laying down clear rules for the economy and setting boundaries. For example, we feel that this means banning wage dumping and tax dumping, or setting minimum standards to stop competition being distorted on the labour market. Naturally, for us economic governance also means effective regulation of the financial markets.

None of this is to be found in the economic governance package. Instead, the current version of the package gives one the impression that it has come about mainly as a result of the pressure exerted by the credit rating agencies on the euro states of southern Europe. As can already be seen from the examples of Greece, Portugal and Spain, it establishes a radical austerity policy which has consequences that are hard to predict for the future of the European project as a whole. This radical austerity policy is currently driving citizens of Greece, of Portugal and of Spain, but also those of northern European countries, back into an ill-judged nationalism that we thought had long since been vanquished in Europe.

The much-needed improvements on the Commission’s original proposals that were elaborated in the Committee on Economic and Monetary Affairs and voted through there – particularly in Mrs Ferreira’s report – have been largely removed again and toned down under pressure from the Council. In our view, the removal of the delegated legal acts from the Ferreira report is entirely unacceptable. As a result, the European Parliament no longer has any influence over how macroeconomic imbalances are dealt with. This is reserved for the Commission. It bears little resemblance to democracy, and still less to a social Europe that is equipped to face the future.

In our view, the economic governance package – at least in its present form – is the wrong answer to the crisis with which we are dealing. That is why we will not be supporting the package in its present form.

  Claudio Morganti, on behalf of the EFD Group. – (IT) Mr President, Commissioner Rehn, ladies and gentlemen, when the euro was introduced it may not have been clear what the loss of monetary policy might involve for a Member State. Today we are seeing the dramatic consequences in Greece.

The euro area was not and has not become an optimal currency zone. A country hit by the financial crisis finds it more difficult to recover and could well drag other Member States into the abyss. From Maastricht onwards, criteria have existed which are designed to prevent dangerous situations, and we have seen how miserably they have failed. In 1999 Greece did not meet any criteria, and only two years later it was already in the euro. Portugal, moreover, was the first country to receive warnings in 2002 about its deficit position.

Even in the past, then, there were signs, but now all European citizens could end up paying the consequences. We are waiting to see, therefore, whether these new measures prove any more useful. They are probably the last chance before the definitive failure of European economic policy is declared.

  Hans-Peter Martin (NI). – (DE) Mr President, the drama surrounding the European Union is turning into a tragedy. Tomorrow it will probably come down to every last vote. As someone directly elected by 500 000 voters in Austria, how can I endorse this package?

We can now explain the concept of economic governance even to highly eurosceptic people, but not if it has no democratic legitimacy and there are no checks and balances. How is it supposed to work if, on the one hand, a protectorate is de facto established – Greece – and on the other the taxpayers in better-off nations have their bonds plundered via the European Central Bank and the bad banks? How can you explain to people who were adamant that they should not give up the schilling and the mark that we now suddenly need Eurobonds simply because the banks cannot be kept in check – by the way, Mr Hughes, it is very nice that the social democrats have now realised this. The only way I can imagine that is if we finally give in and say we should have done this, that or the other at the time; if we admit our mistakes and, as Europe burns around us, finally put forward a vision in which we are able to survive globalisation.

I do not see this in the current package, however, and that is why – quite apart from individual points – it is so difficult for any responsibly-minded person to vote for it.

  Krišjānis Kariņš (PPE). – (LV) Mr President, it is the case that homes are typically designed by people with higher education, but are typically built by people who barely have secondary education. What is more, if, during the construction of a home, there happens to be a building worker who is either foolish or dishonest, and does not pour the necessary amount of concrete into the foundations as called for in the design, then the home will be crooked. In the case of the eurozone, the foundations, the stability foundations, were laid with the Stability and Growth Pact. Unfortunately it has come to pass that various Member States – perhaps like lazy or careless building workers – did not adhere to the stability pact and created excessively large government debts, budget deficits. When the world economic crisis came about, this eurozone house began to totter. If the eurozone were a house, then logically, we should have to set to work again and lay new foundations. In this case we have a completed economic governance package, which we should approve, in the way of reinforced foundations, so that in the future, when the next storm comes along, the eurozone cannot totter. In addition, if we want to have some idea of what this tottering looks like, we need only look at events in Greece. Ladies and gentlemen, we need to avoid the situation where in the future our house could totter once more, and the solution is to approve the economic government package. Thank you for your attention.

  Udo Bullmann (S&D). – (DE) Mr President, I should like to begin my comments with a question to Commissioner Rehn and to Mr Kármán of the Council. Both have spoken of an outstanding matter in the argument between the parliamentary majority and the Council. This week I noted that the Council had opposed text in the report by Mrs Ferreira, the rapporteur for the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament, concerning the symmetrical approach. Are you able to tell me that this problem has been resolved, because the Council voted in favour of the rapporteur? In actual fact, you would then still have a problem between the majority here and the Council – or did you forget to mention that? If so, I should like to know that too, because then I would think that you consider it unimportant. I should like the two of you to explain this to me at the end of this debate.

Listening to the two conservative groups in this House, and also to the liberals, I get the impression that if we adopt what they have tabled here then the world will be put to rights. Unfortunately, that is not the case. The world would subsequently be worse, not better – because they have turned an opportunity to create a more common economic policy in Europe into an austerity package. That is a bad thing, because it represents a policy that dates from the last century, because it represents an outdated approach which merely takes sanctions regimes from political techniques and not incentives, or smart taxation, or balanced approaches such as have been represented by us. Various sides of the House have made sufficient pragmatic proposals to allow a balanced package to be tabled.

If Mrs Wortmann-Kool wants to claim that it would be blocked by the greens and the social democrats, that is of course simply nonsense. Exactly the opposite is true. To the Members of this House from the Group of the European People’s Party (Christian Democrats) – who run after either the Commission or the Council – I would state that we are not here to let things through on the nod, but rather to think for ourselves. That is what the voters expect of us. I must therefore point out to you that at present you cannot tell whether a Member State is buying defence hardware, fighter aircraft or investing in its education system of tomorrow. You are not in a position to make a qualitative assessment of its budgetary policy. We do, in fact, want to equip you to do so. We wanted a smarter pact which provides greater opportunity for the Commission to have an influence. I cannot understand why Commissioner Rehn is not agreeing to this – more opportunities for influence and a modern economic policy which makes reference to the EU2020 objectives in the interests of our citizens. You have derailed it, and that is a pity. Consequently, this package is by no means balanced.

We will continue to fight for a better economic package. We owe this to our electorate. In truth, the answer has to be ‘more Europe’, not ‘less Europe’. It has to be the right Europe, however – not the wrong package.

  Olle Schmidt (ALDE). – (SV) Mr President, Commissioner, Europe is in a difficult situation, but it is precisely in times of crisis that the EU is usually able to take bold decisions. The fact that tomorrow we will be able to take a decision on stricter and clearer rules for economic governance is extremely important, not just for the countries within the euro area. Everyone will be affected. Europe’s leaders have hesitated and created uncertainty. The nervousness has spread. Their message changed from day to day. The decision tomorrow will be able to demonstrate that Parliament is able to take difficult decisions in difficult times. Greece used deceit to enable it to join the euro area. That is true. That is precisely why the German and French leaders are now showing clear leadership and taking responsibility for Europe’s future, rather than continuing to talk in unclear, muted tones.

The Stability and Growth Pact must be reformed and the rules tightened up. Pacta sunt servanda – agreements must be kept – not a new Greece! In Sweden, we know that the way to stability and growth is through healthy state finances. Mr Bullman can ask the Swedish members of his group. It is my hope that the Swedish Social Democrats will be able to support this proposal, particularly as we have managed to get rules through that safeguard the Swedish collective agreements. Now the last impediment is being removed to enable the Swedish Social Democrats to be instrumental in Sweden becoming a member of the Euro Plus Pact. If Sweden is to belong to the EU’s inner circle, we cannot simply trudge along behind EU critics from Hungary, the Czech Republic and the United Kingdom. That is not good company to keep.

  Kay Swinburne (ECR). - Mr President, I find myself in a difficult position in this debate as I believe that strong fiscal rules are necessary for a strong currency and a strong economy. This, I believe, was the fundamental reason why my country did not join the euro. Monetary union was always going to be difficult without significant steps towards economic union and it is this latter requirement which means I do not think the UK will ever join the euro.

For my political group here in Parliament, national sovereignty over decisions on economic policy is a fundamental principle. If all six of these reports and their rules only apply to the euro zone, we would be able to more actively support the Euro Group in their decision to strengthen the principles that underpin their monetary union. If all the Member States who use the euro want to strengthen and deepen the coordination of their economic policies, then that should be their decision.

The UK and other non-euro-zone countries want to be good neighbours. However, attempts to bind those of us outside the euro zone with targets and processes designed to harmonise economic policy are unacceptable. I do not wish to see the euro zone in prolonged difficulty, but the ECR cannot support EU legislation that transfers any further powers away from national governments who are currently outside of that euro zone.

All Member States will hopefully have learned the lessons of the crisis, namely that a balanced budget and strong fiscal discipline are rewarded by lower funding costs in the financial markets, and that honesty in statistical reporting is essential for continued market confidence. Fundamentally, a strong euro zone and the euro as a global currency are in all of our interests. New rules need to ensure it is made stronger and more sustainable.

  Sven Giegold (Verts/ALE). – (DE) Mr President, we in the Group of the Greens/European Free Alliance want to see strong European economic governance. This means that on the one hand we need strong rules for dealing with imbalances – as set out in Mrs Ferreira’s report – and naturally we also need sanctions for these. That is why we will be voting in favour of these two reports, just as we will for the report by Mrs Ford, which provides the statistical basis for our economic cooperation.

Likewise, as regards the three reports on the Stability and Growth Pact: a common euro, and in addition we need limits in Europe on deficits and debt. Such limits have been exceeded in this crisis. However, it is important to consider how the deficits and debt are reduced. At present we are seeing time and again in Greece, Portugal and Ireland that, under pressure from the European Commission, in negotiations with the national governments results and packages have been put together in which it is the weakest that suffer, and in which the wealthy – who did very well out of the previous 20 years – are left alone. This has shaken people’s faith in the process. That is why we in the Group of the Greens want the EU2020 objectives to be fully binding in the Stability and Growth Pact and in the reports, and also the deficit and debt objectives.

In not accepting this, ladies and gentlemen of the liberal and conservative groups, you have opted out of one of the principles of social cohesion in Europe. We cannot support that. We consider it highly regrettable, because we would have liked to have seen a broad pro-European majority here in Parliament.

If these reports do not get a majority tomorrow then we are always prepared to work together constructively to achieve a common solution for economic governance that takes social and economic responsibilities equally seriously.

  Nikolaos Chountis (GUE/NGL). – (EL) Mr President, for us in the Confederal Group of the European United Left – Nordic Green Left, this economic governance package is not only the wrong response to the crisis; it also marks the end of Europe as we know it. Its objective is not economic coordination and fiscal discipline, as it maintains; it is to impose a permanent austerity memorandum throughout Europe, on all the workers. The objective of the ‘European semester’ and national stability and reform programmes is not convergence; it is to abolish collective agreements, liberalise redundancies, privatise industry and do away with public pension systems.

These policies do not serve the interests of the people of Europe or their hope of real growth. On the contrary, they serve the interests of the banks, which have knowingly kept toxic bonds subject to large-scale international speculation on their books, and the interests of large corporations which have found, in the common market, a haven for speculation and tax evasion. I would mention, by way of example, the German company Hochtief, which manages Athens Airport; it has not paid a euro since 2001 and owes EUR 500 million in VAT.

There is a great deal of discussion about Greece. For a year now, the essence of the economic governance package has been applied to my country with disastrous consequences: the recession is getting worse, inflation has gone through the roof, investments have completely dried up, labour rights and collective agreements have basically been repealed, the biggest drop in the cost of labour has been in Europe, unemployment has reached 20% and debt has increased, fuelling a dangerous vicious circle of recession, debt and more borrowing. That is why angry Greek workers have taken to the streets and squares, fighting to get austerity policies overturned, to defend their income and to defend their labour and social rights, real growth and a better future for Greece and Europe.

  Francisco Sosa Wagner (NI). – (ES) Mr President, we aspire to the creation of an economic government area subject to the principles of federalism, albeit adapted to the process of European integration.

We can no longer close our eyes to the situation. There is an inconsistency in having a common currency but lacking the fiscal and financial instruments needed alongside it.

Specifically, we need: the issuance of common European bonds, the outright rejection of competition between the bonds issued by the different Member States, the establishment of a genuinely European treasury and the harmonisation of fiscal policies to ensure equality, combat tax fraud and help to define a progressive European social policy based on efficient public services.

Some may say these ideas are elementary. They must nonetheless be repeated time and again because nobody listens to them. It is for this very reason, that is to say not listening, that we are living in dark times, as anticipated by the poet Bertolt Brecht.

  Íñigo Méndez de Vigo (PPE). – (ES) Mr President, when I first entered this House 20 years ago, this debate would not have taken place, because this House was a consultative parliament at the time, and many of us have battled over the last 20 years to make it what it is today, a co-legislator parliament.

However, when one co-legislates, one must be responsible. It is an exercise in responsibility that is now in need. A part of this House has adopted the old May 1968 slogan, according to which it is realistic to demand the impossible. Obviously, if one demands the impossible, it ultimately becomes impossible to agree on anything.

The Group of the European People’s Party (Christian Democrats) has not negotiated with any individual groups. We have negotiated with all the groups. However, we have only reached agreements with those that were ready to do so.

Mr President, it is my belief that much progress has undeniably been made with the Commission’s proposal, the Council’s position and what is now on the table – which will be put to the vote tomorrow – if they are examined objectively. This is the real controversy or dilemma that we will have to resolve tomorrow.

At the end of his fruitful existence, Miguel de Cervantes said that there were moments in life when one must choose whether to be a road or an inn. By being an inn, Cervantes meant lying still, complaining that one is ignored and remaining static. Being a road means moving forward, overcoming obstacles, knowing that not all has been achieved, that the road is probably not the one we would like to be walking on, but going on walking all the same.

This is what I believe this House should do tomorrow: walk on, resolve the differences we still have with the Council, but look towards a time when the crisis is hitting all Europeans. It is not responsible at this juncture to say ‘I am not happy with this, goodbye, have a nice day’. Responsibility means walking.

Therefore, Mr President, I think that in tomorrow’s vote we will convene another meeting with the Council to be held in July. As another poet used to say – Mr Sosa Wagner has quoted a German poet, I will quote a French one, Paul Valéry – poems are never finished, they are simply abandoned.

We will abandon the end result until July, and I hope that the Hungarian Presidency, which has proved so successful, will also be able to reach an agreement that satisfies everyone.

Thank you, Mr President, and may I point out that this is the first time in 20 years that the clock has erred in my favour, giving me more time.

  Edward Scicluna (S&D). - (MT) The six reports on economic governance amount to a complex package for the European Union, especially for the eurozone. Those who put the package together find it hard enough to explain and it is even harder for people on the outside to understand it. It is understandable that people are perplexed, both by the crisis that is unravelling before them, and by our unclear and timid reaction to it. This is why the responsibility lies with us to explain our voting choices to our constituents; to say whether we are for or against each and every one of these reports. Briefly, the package which the Commission presented us with was intended to cover the three phases of how one should react to the crisis. Primarily, this package focuses on crisis prevention, mitigation and solution. The Wortmann-Kool, Feio and Goulard report discuss the use of sanctions at length as the main tools required to prevent a country from reaching dangerous deficit and debt levels, and the scenarios that arise when these countries ignore the various warnings issued to them on their dire fiscal situation. Originally, the reports squabbled over the severity of the fines that should be imposed, although later on more moderate suggestions were accepted. The hardest and more creative way of mitigating the crisis, by avoiding macroeconomic imbalances through the use of scoreboards that determine the targets to be reached, was left to the Ferreira report. Despite technical restrictions and other pressures, this report managed at least to attain a minimum set of desired objectives. Anyone hoping to find a solution to the current crisis within this package will be doing so in vain. This package lacks well thought out, sensible ideas by European and foreign economists on how the affected countries can overcome this crisis. One report that made an effort to build a consensus on securities for the euro was side-lined at the last minute by the Council and has now simply been shelved by the Commission, accompanied by a promise to carry out further studies on the subject. We have nothing in hand that is concrete; we have merely ended up with a promise unto a promise. We must keep in mind that the whole point of this exercise was to help Europe get back to its feet, to pull it out of the mire and to ensure that it can move forward and become globally competitive. For this reason, we should not oppose the idea that eurozone countries need to reduce their excess fiscal burdens. We agree that nobody should compete while carrying around such a heavy burden. However, one cannot accept the imposition of a crash diet that would only serve to further sicken and weaken. Europe needs to build some economic muscle; it needs creative schemes in order to strengthen economic growth and create jobs. It is greatly disappointing that after all these months, not one of the intelligent proposals that were on the cards ended up in this package.

  Wolf Klinz (ALDE). – (DE) Mr President, ladies and gentlemen, for a long time we believed that the internal market and the introduction of a common currency would automatically result in economic convergence and convergence of the Member States, and that the Maastricht criteria were sufficient to ensure discipline. Reality has now caught up with us. The management instruments have proved to be inadequate and in the past they have been grossly transgressed.

A single currency and a single monetary policy are not feasible in the long term unless the rules have teeth in the area of fiscal, budgetary, economic and social policy. The EU is now trying a new approach. To speak metaphorically, it has one last shot. If this last shot fails to hit the target, the damage could be severe. The EU could find itself in a regressive phase, we could see the return of renationalisation and protectionism, and the first signs of disintegration in the euro area.

The new package attempts to prevent this and to lay a new foundation. I am in favour of this package, even though I consider it rather half-hearted in view of the problems that I have just outlined. There is a risk that the European semester will turn out to be a centralist, bureaucratic exercise. The pact for the euro may possibly be toothless. What we need are binding recommendations from the Commission. What we need are automatic initiatives and sanctions which the Council can only stop by means of reversed qualified majority voting. This is undoubtedly necessary if the disgraceful, opaque wrangles by Council members in back rooms are finally to be brought to an end. What we urgently need is a clear resolution mechanism for the financial sector so that it can work again.

  Derk Jan Eppink (ECR). – (NL) Mr President, it has become clear that a monetary union requires a budgetary union, as well as compliance with the rules. That is the lesson to be learned from the euro crisis. I find the package we agreed last Wednesday to be very well balanced and I therefore have the honour to inform you, Commissioner, that the Belgian delegation within the European Conservatives and Reformists will be endorsing this package.

I do have some points of criticism, however. On the whole, I think that Eurobonds are not a miracle solution. Yesterday, Gideon Rachman wrote in the Financial Times that you cannot cure alcohol poisoning with a bottle of vodka. I have had theological debates on this issue with Mrs Goulard. We could not agree, but I admire her as an opponent. I also think that the theory of economic imbalances is rather vague and unclear. It is not true that Germany has a trade surplus because Portugal has a trade deficit. That really would read like ‘EU economics for dummies’.

Therefore, Mr President, we have before us the best text achievable. I will vote in favour of it and I think that, at this moment and in this period of crisis in the euro area, we and this Parliament are being called upon to deliver and that is what I would like to do.

  Georgios Toussas (GUE/NGL). – (EL) Mr President, the package of economic governance measures creates an strong tool for imposing capitalist restructurings in a uniform manner and a uniform strategy in all the Member States, in order to strengthen the competitiveness, profitability and power of capital. This is a permanent memorandum for the working classes in all the Member States of the European Union. The vulgar propaganda about Greece’s, Ireland’s, Portugal’s and other countries’ debts and deficits is designed to blame the rights acquired by the working classes and to conceal the real culprit, which is capitalism and its monopolies. The ideological terrorism of the bourgeois class being promoted is that the only way out is to slaughter the workers so as to keep the profitability of capital intact.

Between 1985 and 2011 alone, apart from the immeasurable wealth appropriated by capital from exploiting the working class in Greece, monopoly capital at home and abroad plundered EUR 628 billion in interest and repayments, either as lender or borrower.

The working class owes nothing to those who have robbed them of what they earned by the sweat of their brow. On the contrary, they are owed all the wealth plundered by capital. The message sent out by the Greek Communist Party from the rock of the Acropolis echoes more topically than ever today: ‘Nations of Europe arise. Overturn the capitalist barbarity and the sovereignty of the monopolies.’

  Andreas Mölzer (NI). – (DE) Mr President, the more we guarantee in the future European stabilisation mechanism, the more dependent the sound states become on the overindebted periphery of the EU. Centralisation and a single currency, which could never be a hard currency in the long term, have contributed to the current problems, yet a continuation along this wrong path is precisely what is now being proposed to us as a solution to rescue us.

Economically strong and weak economies are first arbitrarily thrown together in the same pot. Then we make recourse to various rescue measures – all in vain – and now the whole thing is to culminate in European economic governance. In my opinion, if overindebted economies want to remain in the euro area then they must be subjected to strict budgetary control instead. The sort of centralisation which takes the form of Brussels exerting budgetary authority over all the Member States represents improper intervention in the sovereignty of the Member States, however, and would moreover reduce the sound countries of Europe to mere playthings of EU bureaucracy.

In my opinion, we should be bolting the door against Brussels’ creeping desire for ever more centralisation.

  Danuta Maria Hübner (PPE). - Mr President, our task and responsibility here is to ensure that both Member States and the Union as a whole emerge stronger from the crisis, and the economic governance package takes us in this direction. The package – politically unthinkable prior to the crisis and certainly not yet perfect – is indeed a major step forward.

It is obvious, however, that to get an agreement is one thing – and it is our duty here – but to see its practical implementation and then to benefit from new rules will be yet another challenge. This reform, introducing a greater amount of automaticity over political bargaining and discretion, will have to pass the test of real life and this will require a strong political will and an attitude of accountability.

It is unclear how long it will take before all the institutional arrangements are in place and new rules start bearing their fruit. This uncertainty creates risks and we must not create additional space for these risks. It also remains unclear how the interplay between the European Semester and the new economic governance infrastructure will function, and I also have concerns about the permanent European Stability Mechanism emerging as an intergovernmental tool.

I hope that our agreement on the six-pack will pave the way for these instruments to be eventually converted into the Community-based ones.

To conclude, let me say that the economic governance package gives us a chance that the winner/loser attitude will disappear from our European reality and that Europe will not become a zero sum game.

  Liem Hoang Ngoc (S&D). – (FR) Mr President, ladies and gentlemen, our fellow citizens are questioning the merits of austerity policies that are reducing their public services and squeezing their social security. Wherever these policies are rife, they are not succeeding in reducing public debt and bringing down unemployment. The contents of this ‘governance’ package – and I call them ‘contents’ deliberately – that we are discussing today are so ridiculous that even the economists are stunned, because they will prevent budgetary policy from adjusting to economic cycles.

During the trialogue, the Commission representatives admitted to us themselves that they have not used any theoretical or econometric model as a basis for making sound predictions and recommendations. They admit that they are working on a purely intuitive basis. In the light of this, it is difficult to understand why the conservative, liberal and eurosceptic Members of this House have blindly attempted to toughen up the text proposed by the Commission. They are even less in a position to preach to us, considering that the governments led by friends of theirs have created these deficits through tax reductions that are as unfair as they are ineffective: is that not right, Mr Gauzès? They make grand statements about the Europe 2020 strategy, but they refuse to allow spending to prepare for the future, such as spending on investment, to be excluded from the calculation of the deficits.

Yes, Mrs Wortmann-Kool, that is the crux of the debate as far as we are concerned! Let us reduce the deficits, yes, for example by going back on the tax gifts that have benefited the State’s creditors above all, but let us do it without sacrificing investment, training and jobs, because today’s investments are tomorrow’s jobs and the tax income that will follow, and this will allow us to reduce our deficits. This is the theorem that should appear on the frontispiece of the ‘governance’ package.

My fellow conservative and liberal Members, some of you want to punish automatically States that are heretics to your dogma to the tune of billions of euros. They also want to punish countries that will not lower wages in order to regain their external balance. They believe that the deficits are primarily the product of bad intentions on the part of those States, as though the neoliberal model that you never question had not just been through its worst crisis since 1929, and as if it were not already leading to pressure on the buying power of ordinary people and causing a massive contraction in tax income: two problems that were at the root of the rise in private and public indebtedness in the first place.

When it comes to the votes, socialists and democrats will send out a clear signal against this austerity package, which can only heighten the indignation that is rising throughout Europe. This clear signal is aimed at all workers in Europe and especially at our fellow citizens in France and Germany as they approach elections that will have a decisive impact on Europe’s future.

  Ramon Tremosa i Balcells (ALDE). - Mr President, first of all I would like to thank all the rapporteurs for the great job they have done, especially my colleagues and friends Sylvie Goulard and Carl Haglund.

Our vote on the economic governance package could be one of those historical turning points for this Parliament. Not only through its direct consequences, but also by the moral stand that we show our citizens. It is time for politics and governments to take a more robust stand on what is wrong and what is right in the values that we want to defend, including in the economic field.

Do we want governments that lie about their budgets or their deficits? We do not, because even though you can deny reality for a while, it always strikes back in the end. Moreover, do we want governments that comply with the Stability and Growth Pact? I think we do. Thus, managing sanctions is necessary.

We know that if Member States have to sanction each other, nothing will happen. That is why I fully support the reversed qualified majority, also in the name of my party, the Catalan Liberal coalition, which is now running the Government of Catalonia and also the government of the city of Barcelona. Automaticity is much needed if we want to be sure that red lines are not freely trespassed.

Furthermore, there is the call for the Commission to make a proposal on euro securities. I would like to publicly support this as a proposal that takes into account the feature of fiscal discipline.

IN THE CHAIR: MIGUEL ANGEL MARTÍNEZ MARTÍNEZ
Vice-President

  Peter van Dalen (ECR). – (NL) Mr President, the Greek crisis is one of the factors forming the basis of this debate. Lending more money to the Greeks and demanding they implement more cuts is unwise. The Greeks will never be able to repay the loans and an economy which is as good as dead cannot make cuts. You cannot ask a skeleton to tighten its belt.

What do we need, then? First of all, those in this House who brought Greece into the euro area should confess their guilt, as should the Belgian Finance Minister, Mr Reynders. Obviously, this should never have been allowed to happen.

Secondly, part of the Greek debt must be written off and, in order to ensure that the residual debt is indeed repaid, a multi-year recovery plan for the Greek economy should be drawn up.

Thirdly, the Stability and Growth Pact should include automatic sanctions against those who break the terms of euro membership, as we should never again allow ourselves to slide into this misery. On this point, I think that the Wortmann-Kool report could have been more stringent.

Mr President, I support the ‘six-pack’, but because of this point I will abstain from voting on the Wortmann-Kool report.

  Ilda Figueiredo (GUE/NGL). – (PT) Mr President, this legislative package is not an answer to the severe economic and social problems being experienced in many countries, which are affecting workers and people in general. They originate basically in increasingly neoliberal EU policies that concentrate financial and political power in the hands of the few.

In expanding the demands of the Stability and Growth Pact and making penalties tougher, the outcome of the negotiations reveals the political consensus that exists between the three institutions on the course and main alignments of the European Union. It forms part of an unprecedented attack on the rights of the national parliaments, which are constrained by the EU’s neoliberal guidelines for their countries’ budgets, the aim being to impose austerity measures on workers and people, privatisations and public investment cuts in essential sectors and services.

Since the workers’ struggles in Greece, Ireland and Portugal have been in vain, as we know, it is time to do a U-turn and to stop insisting on benefiting only economic and financial business groups, above all in the major European powers. What these legislative documents propose is to perpetuate these intervention measures, which subjugate peoples and countries and transform them into veritable protectorates or colonies. They propose going further down a path that can only lead to economic and social disaster and the actual implosion of the European Union. We are therefore against them.

  Jean-Paul Gauzès (PPE). – (FR) Mr President, Commissioner, Minister, ladies and gentlemen, many comments have already been made on the different reports that make up this governance package. What are the most important points, at this stage, to help us appraise the work that has been done? The fact that we have this package today, which is the result of negotiations between the Council and Parliament, already constitutes considerable progress. It fills an obvious gap in the development of the euro, and sadly it took the debt crisis to prompt us to do this.

In this respect, we should stress the commendable work done by the Hungarian Presidency and the quality of the negotiators from this Parliament. I would also like to emphasise the results that Parliament obtained in the discussions with the Council, as the latter demonstrated genuine openness. We must remember how the situation used to be and measure the improvements objectively.

Having said this, are these provisions satisfactory, and are they enough? There is always room for improvement, of course, but this package already provides real solutions to strengthen the euro area and to create the concerted economic approach that is needed. Can we seriously argue, as the opponents of this package do, that we can build growth on top of a mountain of debt that is continuously put off further and further into the future?

To those who blame us for supporting a governance package that is not based on any theoretical or econometric model, I will simply say this: did the models you are talking about foresee or prevent the crisis we are going through and that has not ended yet; or did they lead, instead, to high-risk behaviours under the cover of mathematical truth?

Mr President, ladies and gentlemen, tomorrow Parliament will have to make its decision, and I hope it will send out a signal loud and clear, both to our citizens, to restore their confidence in Europe, and to the markets, to stabilise our currency.