Local view for "http://purl.org/linkedpolitics/eu/plenary/2001-05-03-Speech-4-011"
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"en.20010503.2.4-011"2
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".
Mr President, the stability and convergence programmes being evaluated today by Parliament constitute the second updates of the original programmes first presented in 1999 by the 14 Member States, with the exception of Greece, which submitted its first programme this year.
Allow me to start with Greece’s programme, which addresses circumstances with which, as is to be expected, I am perfectly familiar. The programmes form part of the control and discipline mechanism of the stability agreement, an agreement on budgetary prudence, the two main objectives of which are to ensure that the budgetary deficit does not exceed 3% each year and, secondly, to achieve a balance or surplus over the period of a full economic cycle. If anyone had said back in 1993 that Greece would achieve these objectives in just 7 years, they would have been laughed at. Greece’s middle name was inflation – 13% in 1993 – and deficit – over 14% of GDP in 1993. It was the example to be eschewed in the European Union. Few believed that it would be able to resolve these problems. Yet, by the end of 2001, Greece – and the Council agrees with this – is expected, instead of a deficit, to have a surplus of half a percentage point of GDP, rising to 1.5% in 2002 and 2% in 2003. Also, instead of 13%, inflation is expected to be a mere 2.3%. I appreciate your allowing me to dwell on these figures a little because Greece’s espousal of the culture of price stability and budgetary stability was perhaps the jewel in the crown of this policy throughout Europe.
The spectacular turnround by this Member State, which succeeded in meeting the Maastricht criteria, is a typical example of the general climate of monetary and budgetary stability which has prevailed in Europe thanks to everyone’s efforts to support the single currency. The motion put to the House by the Committee on Economic and Monetary Affairs acknowledges and commends the achievement of budgetary discipline and price stability. It points out that inflation was slightly above the ceiling set by the European Central Bank as the result of outside influences (oil prices, depreciation in the euro against the dollar), rather than internal economic weaknesses. It also points out that a balanced budgetary position, and hence monetary stability, can only be achieved in the medium-term on the basis of a robust European economy centred on a high rate of growth in production.
The average rate of growth was 3.3% in 2000 with Austria at 3.5%, Finland at 5.2%, Greece at 4.1%, Ireland at an astounding 10.7%, Luxembourg at 8.3%, the Netherlands at 4.5%, Portugal at exactly the European average of 3.3%, Spain at 4% and Sweden at 3.9%. Unfortunately, these rates of growth are unlikely to continue. High oil prices, high interest rates and the slowdown in the American economy have caused initial forecasts to be revised downwards to between 2.4% and 2.8%. So we cannot expect the same level of comfort or budgetary surpluses this year as we enjoyed in 2000, not that this means that there will be deficits. The main thing is to be well organised and to use public money to support growth, especially if we bear the long-term targets set in Lisbon in mind: full employment within ten years, an increase in the working population to 70%, an average rate of economic growth of 3%, reform of the social state and a European economy at the forefront of the knowledge-based economy.
The stability programmes presented indicate that the Member States are aware of these needs. They have used their surpluses to repay public debt, reduce taxes and increase public investment and, in the longer term, to stabilise the state pension system, which has also become an important consideration, with some resources being directed towards a reserve fund.
All these ways of exploiting strong fiscal positions are worthwhile and the Committee on Economic and Monetary Affairs supports them, but not to the same degree. The Council considers the reduction of public debt as the main priority; it does not object to public investment, provided that it does not interfere with reducing debt, and it appears to oppose tax reductions. We, on the contrary, consider the achievement and the manner of use of primary surpluses not as a matter of dogma but as a matter of political expediency, to be judged according to current conditions and the needs of economic management. In the current situation, characterised by the menace of a serious recession in the US economy, as well as the persistent need to raise the rate of growth in Europe, debt repayment as well as tax reductions seem to us of lesser importance than financing public investment, naturally in balanced budgets, not deficits, both for supporting flagging growth and for pushing forward those structural changes necessary for the transition to a modern, technologically pioneering, full employment economy in Europe. It should not be forgotten that the absorption of high rates of unemployment presupposes the consistent achievement of a 3% rate of growth, a target which cannot be said to have been met on a permanent basis in our economy.
Finally, I should like to address a request to the Commissioner, because the Committee on Economic and Monetary Affairs is concerned about the Union’s continued failure to make available to the appropriate committee in Parliament the detailed technical evaluations of each programme and it reiterates its call for a more harmonised timetabling of submission of the programmes by the Member States in order to improve comparability, calling in this context for full and timely involvement of the European Parliament."@en1
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