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EUEUEUEUEU turns national governments into EU institutions

Posted by Olog-hai on Wed Feb 29 02:16:13 2012, in response to EUEUEUEUEU Olog, posted by RockParkMan on Sat Nov 12 14:58:17 2011.

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Brussels, 27 February 2012 Speech by President Herman Van Rompuy to the Interparliamentary Committee meeting on the European Semester for Economic Policy Coordination

Brussels, 27 February 2012

It is a pleasure to say a few words at this important event. Your gathering here today and tomorrow is itself a sign of the changing times. It shows the growing interweaving of European and national politics.

In the old days, exaggerating just slightly, the European Community used to exist on one planet, and national politics on six, nine, twelve, fifteen other planets. This is over now. The debt crisis, difficult and painful as it is, brings home the fact that the Union is us. Right here and now, in everyone's daily life. Europe is not a great abstract idea for the future, no it is our daily experience!

Our interdependence is more clear than ever, and so is co-responsibility. Co-responsibility of the governments and institutions, to overcome the crisis. Co-responsibility also, of national parliaments.

Since the start of the Greek crisis, the events forced such momentous decisions upon us that national leaders had to step in, together.

Via national leaders and governments, national parliaments have also become more implicated than ever in the day-to-day business of the Eurozone. Just think only of the negotiations of the most recent Greek package. National tax payers' money was and is at stake. Given the relatively limited size of the central European budget, this was the only instrument available.

And all the while the European institutions play their essential role. The European Parliament was decisive in keeping its line in the discussions on the six-pack. There is no zero-sum game here.

Decisions by one national parliament — be it in Germany or Ireland, in Slovakia or Portugal — are watched all over Europe. Maybe not formally speaking, but at least politically speaking, all national parliaments have become, in a way, European institutions.

This is political interdependence: the decisions of one affect all. Fiscal irresponsibility put the Eurozone in danger. A lack of solidarity could have produced the same result. Debtor and creditor countries have to work together. And in general, the economy of non-Eurozone countries also depends on the Eurozone. We carry a common project, especially those in the Eurozone, even if the choices are made nationally. Forgetting this in our actions undermines the common good.

How did this come about? Some would say dismissively that national leaders have only acted for the European good under the pressure of events, not out of inner conviction. Well, the pressure of events can be very effective too. Ideas can guide men; hard facts teach them. When I say the crisis put Europe’s national leaders face to face with co-responsibility, two reasons spring to mind why it fell upon them, personally.

First of all, as I said: there is a lot of money at stake. The public debt crisis, like the banking crisis in 2008, requires taxpayers’ money (albeit also in loans and guarantees). Given that the central EU budget is relatively small (ca. 1 percent of GDP), the EU institutions as such cannot act decisively on their own. It is therefore essential for the Member States to step in. And the amounts are such — €500 billion, or more than 5 percent of the GDP of the Eurozone that within countries the decision can only be taken at the highest political level. Many prime ministers would prefer this issue to stay in the hands of their Finance Minister… Yet the need for national money is simply a fact.

Secondly: in times of crisis, we reach the limits of institutions built on attributed competences. When we enter uncharted territory and new rules have to be set, the European Council, bringing the 27 country leaders, the President of the Commission and the President of the European Council around the table, is well placed to play its part.

Not everybody is satisfied by this situation. Some political actors feel side-lined. Some say the traditional "Community method" is abandoned. I have a more nuanced view. Over the past two years, we have worked to make sure that Europe’s institutions can deal with this new interdependence. And even if we had to use in part the “intergovernmental” road…, the work we have been doing has actually — and paradoxically — resulted in stronger central institutions.

The Commission has received unprecedented supervisory power. The Court of Justice will control the transposition of the debt brake. The European Parliament was decisive in designing the new budgetary and macro-economic surveillance, the so-called "six-pack", which is the backbone of the whole enterprise.

In the three major recent efforts by the Union to give itself a better economic governance — the Task Force which I chaired on economic governance, the Euro Plus Pact, the Fiscal Compact — I worked hard together with the Commission to bring the results within the normal EU framework.

When it comes to budget policies, everybody now acknowledges these are a matter of common interest. We have worked to align legislation and practice on this principle. The division of labor in this field is subtle. Member States set the ceiling on debt and deficit together, at the Union level, and they decide individually how to raise money and spend it.

Within this division of labor, the national parliaments keep their budgetary sovereignty, at least as long as national policies do not threaten the financial stability of the whole. To prevent that, countries in excessive deficit will conclude a 'contract' with the Commission to bring down the deficit below the 3 percent ceiling.

Nevertheless there is some uneasiness among national politicians about the EU’s new tasks. Yet recent events show that each and every part of national political life can take on a European dimension! Every national MP should therefore take an interest in talking to fellow parliamentarians in Strasbourg and in other member states — a member of the Bundestag can only gain from speaking with, let's say, Italian or Slovenian colleagues — and vice-versa!

The new Fiscal Treaty introduces meetings of the budget committees of national parliaments with the European Parliament. Even if this forum does not take decisions, it is important as a forum of exchange, as an eye-opener.

In my feeling it is in everybody's interest — also that of the European Parliament — that this forum works. As an outsider, I sometimes have the impression that the EP and the national parliaments live in different worlds: the one always pushing for more integration, the others focusing on domestic issues and pulling the brakes. That is why it is important to understand each other's perspective!

This year is the second time the European Semester is in place. But it has already been much strengthened since last year. The basic calendar remains the same: from the Commission's Annual Growth Survey (this time already in November 2011), via the National Reform Programs and others, to the June European Council which closes it.

But along this process, our tools have been strengthened, in particular thanks to the entry into force of the so-called "six-pack" for budgetary and macro-economic oversight. I should like to underline that this doesn't apply to the same extent to non-Eurozone-members; for them the new sanctions do not apply.

As you know, the Commission is now monitoring the budgetary cycles, giving its opinion on the draft budgets, allowing you, the national parliaments, to better dialogue with your own government.

In the framework of the European Semester, the Commission also assesses macro-economic policies (beyond fiscal issues). For instance, it recently decided to do extra reporting on imbalances for 12 countries, including countries with surpluses on the balance of payments (Sweden, Denmark). The Council can make recommendations to Member States to correct imbalances; when these are not followed, sanctions will ensue.

Now, once again, this new way of working reflects the new political reality of Europe after the crisis: the awareness that what happens in one country affects its neighbors, especially within the Eurozone. This can be about budget deficit, but also about economic reforms, for instance on the labor market, having a major impact on the rest of the Union. The Commission and other euro area Member States have to be consulted before adoption of any major fiscal or economic policy reform with potential spill-over effects, so as to allow for an assessment of possible impact on the euro area as a whole.

Here the old slogan of the three musketeers applies: "All for One; One for All!" It is the responsibility of the parliaments to adapt themselves to this situation.

Sometimes people say we take decisions behind closed doors. I do not think any government or any board of directors would take vital decisions with the cameras running...But we do take these decisions having listened very carefully to all points of view.

In meetings of the European Council, one feels the presence around the table of all the parliaments which you represent. Not only do we listen to the President of the European Parliament at the beginning of each of our meetings — a Parliament to which one of our colleagues, President Barroso, is directly accountable. Many national leaders, in our discussions, refer to the position of their parliament, to defend specific amendments.

In that respect I sometimes have the impression that I am the only one in the room without a parliament! As a long-time elected politician, and a former President of a national parliament, I miss this dearly! I do have voters of course, but they are only 27 — 27 electors all democratically elected themselves!

Sixty years of integration has taught us that Europe is not built by dissolving Member States, but by infusing them ever more deeply. A slow process which sometimes gets a sudden push. In this crisis we have reached a whole new level of cooperation, a sort of European home affairs. "Europe is domestic policy."

And that is why it is so important to have dialogues like the one of today.

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