Local view for "http://purl.org/linkedpolitics/eu/plenary/2002-09-25-Speech-3-174"
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"en.20020925.7.3-174"2
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". – Madam President, the Commission fully shares the view of honourable Members that Mercosur’s financial problems have intensified during the summer. The European Union and the Commission are concerned at the financial turbulence that is affecting the entire Mercosur region. The turmoil was triggered by the economic and banking crisis in Argentina, which led to spillover effects on other Mercosur countries such as Uruguay and Brazil. As a result, the social and economic indicators, as the honourable Member indicated, are pointing sharply in the wrong direction; poverty is increasing and GDP has declined in all Mercosur countries.
Furthermore, an additional EUR 48 million for the period 2002-2006 has been allocated to cooperation with Mercosur as a whole and it is focused on three priority areas: support to the implementation of the Mercosur internal market; support to Mercosur institutionalisation; and support for civil society in Mercosur.
In sum, there is a package of EUR 250 million to be made available in the period 2002-2006 – of which EUR 30 million are planned to be committed in 2002. I hope this is another sign of our long-term commitment to Mercosur.
Let me make one final brief point. We have just held meetings in Copenhagen with the ASEM countries and individual meetings with South Korea, China, and Indonesia. In the last few years – at least until the recent crisis, and for a change – European investment in Latin America outstripped investment in Asia. It is interesting to compare the two regions and to compare for example the savings ratio in Asia with that in Latin America. Because domestic savings are so much lower in Latin America, it has depended much more on foreign direct investment in order to promote economic growth. The problem in today's liberalised global market is that just as money can go in, so it can just as rapidly go out again. The only answer to poverty in Latin America is sustainable economic development. We can only have sustainable economic development when we have sustained investment. So there is a very strong argument for trying to increase domestic savings ratios in Latin America and for looking at financial flows in the way that Chile did a few years ago and trying to ensure that they become stabilising rather than destabilising factors.
The crisis will require deep economic and political structural reforms. The Commission is convinced that one of the answers to the financial and economic turbulence should be deeper and faster regional integration. In this respect, the European Union and the Commission strongly support the Mercosur integration process, especially at this crucial moment for the region.
The European message of support for further integration as one of the responses to the present crisis is confirmed by our strong commitment to intensify and accelerate negotiations for an Association Agreement between the European Union and Mercosur. The agreement will create improved market access for Mercosur exports to the European Union and it will strengthen Mercosur as a common market. In addition, from the political and cooperation point of view, it will be a clear signal of a strengthening of EU-Mercosur relations.
As Parliament knows, the EU-Mercosur negotiations are highly ambitious and include three pillars: political dialogue, cooperation and a comprehensive trade agenda. To date, we have virtually finalised the political and cooperation chapters. At the recent Rio Ministerial Meeting on 23 July 2002 which, as the honourable Member noted, I attended, an ambitious work programme for the trade negotiations was established. This includes a ministerial meeting during the second half of next year to kick off what we hope will be the final stage of the negotiations.
In addition to the interregional negotiations, the Commission has considered additional forms of help to alleviate the Mercosur crisis. Firstly, on the trade front, the European Union has taken important decisions to increase the allocation of the Hilton Beef Quota for two Mercosur countries: 10 000 additional tonnes to Argentina and, as a first step, 1 000 tonnes to Paraguay. It is also worth remembering that Mercosur countries have benefited, as my honourable friend the President-in-Office pointed out, from the EU GSP mechanism for quite a long time. The latest review of the regime entered into force on 1 January 2002 and it should expire on 31 December 2004. At this stage it is not possible temporarily to adjust GSP preferences only for the Mercosur countries, as some have suggested. However, we remain committed to helping Mercosur countries to benefit further from the current system.
There has also been coordination of the positions taken by our Member States on the South American crisis by means of Council common positions and public statements on Argentina. It must be said that this falls short of actual coordination of positions in the International Monetary Fund. The Mercosur crisis shows that it would desirable for the European Union to speak with a single voice and play a more influential role in international financial matters.
As Parliament knows, the European Commission cannot intervene as such in the definition of the criteria imposed by an international organisation like the IMF – in which, as I have said, European Union Member States are represented – for the grant of loans to certain countries in a crisis situation. The approval of IMF assistance as such is based on its own criteria and is tied to sustainable economic programmes proposed by the governments of the countries affected by financial or economic problems. We believe it is only natural that the conditions imposed by international organisations like the IMF for the concession of loans for the structural adjustment of countries undergoing a crisis are different from those set by international cooperation organisations like the UN Development Programme for the concession of grants. These organisations have different objectives, which explains why the UN Development Programme puts more emphasis on the social component of cooperation.
But above and beyond any discussions on the merits of any of the criteria used by international organisations, we should not lose sight of the fact that the crisis requires fundamental economic reform in the region as a whole.
Finally, the Commission adopted in August a substantial cooperation package in favour of the Mercosur countries covering EUR 200 million for the period 2002-2006. These programmes will support regional integration, economic reform, social development and poverty alleviation, modernisation of the state and protection of the environment."@en1
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