Local view for "http://purl.org/linkedpolitics/eu/plenary/2003-03-11-Speech-2-247"
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"en.20030311.10.2-247"2
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".
Mr President, I will try within the time available to me to comment on the four reports presented to us. I will deal initially with the three relating to the general economic situation, the Stability and Growth Pact and public finances and finally I will comment on the report by Mr Olle Schmidt on the specific case of Sweden.
In its analysis of the pact, however, the Commission has seen that in certain cases temporary deviations are justified provided that they are for reasons aimed at improving growth.
Our view is that physical investment and, above all, public investment is not the only element which can allow a temporary deviation in budgetary balance to be carried out within the framework of the pact.
We believe that all actions which ultimately allow us to increase our growth potential must be treated in the same way.
The Commission therefore proposed in its Communication that there could be temporary deviations in countries which fulfil certain conditions; essentially those which have low levels of ratio in relation to public debt; which furthermore have already achieved a situation of budgetary balance and which, of course, establish this type of deviation in order to increase growth. And here we are talking about investments in infrastructures, investments in knowledge, but also measures of a fiscal nature, for example tax reductions, which may eventually allow us to improve growth.
Those are the essential elements which the Commission raised in its Communication, which have not been taken up in an entirely exact form in the final conclusions of the Council, but which nevertheless have allowed, or are allowing, sufficient progress to be made in order to achieve a result which we believe must allow us to improve in terms of growth.
What the Council says is that we must carry out analyses on a case-by-case basis, that there is no rule for this type of deviation; it does not impose any condition with regard to how the Commission must implement its proposals and naturally the Commission remains convinced that the proposals we have made so far, in a couple of specific cases, with regard to these temporary deviations, are still valid and they are the criteria we will use in the future.
With regard to the coordination of our budgetary policies, I would say that the system has improved, but that, nevertheless, we cannot be completely satisfied, since we have too many deviations. I believe it is essential to make progress on coordination and in this regard the broad guidelines for economic policy are intended to make improvements, not only by means of the tri-annual approach, but also by paying more attention to application reports than to general approaches. And I believe we must improve our multinational coordination systems, since – as we have highlighted in our proposals to the Convention – there are certain deficiencies in the current system which prevent ‘peer pressure’ from functioning in the manner which was drawn up in the Treaty.
Finally, I would say to Mr dos Santos that I am grateful for his support on the analysis of the public finances for 2002 and the quality of public finances. That report is a key to understanding what is done subsequently, in November, when we present our proposal for a communication to the Council.
In our Commission Communication to the Council we do not intend to modify the pact or to make it more flexible. Our intention, on the basis of our experience over recent years, is to ensure that the application of the pact is better suited to the specific situations of each of the countries involved.
We also believe it essential in our Communication that the Member States confirm their commitment to the pact. That is why we requested a European Council resolution to allow this progress.
I would firstly like to thank Mr García-Margallo for the work he has done and, as he has said, for the clear message contained in this report with regard to the broad guidelines for economic policies.
Though I have said this several times, it is perhaps worth repeating that we insist in our communication on certain fundamental points. 3% is still the nominal deficit limit; however, we have to take account of the evolution of the cycle and therefore the evolution of cyclically adjusted deficits is an essential element.
Secondly, in order to achieve budgetary balance in the medium term, those countries which have not yet achieved it will have to make budgetary efforts to the tune of half a point per year, as a minimum, or more in the event that there is a difference.
Thirdly, we are aware that there has been a relaxation of the budgetary policy at good times in the economic cycle, which has created subsequent problems and it is therefore essential to pay more attention to ensuring that there is no further procyclic behaviour in these circumstances.
We believe it is essential to pay attention to debt and as Mr Trentin pointed out previously, I believe it is essential to consider the specific situation of certain Member States, in such a way as they have greater room for manoeuvre.
All of this has been approved by the Ecofin Council, with the corrections which I referred to in relation to the report by Mr Trentin.
I come to my final comment on the report by Mr Schmidt. It is true that in our convergence report on Sweden we referred to compliance with the convergence criteria with two exceptions: the legal convergence criterion, particularly in relation to the Swedish Central Bank, and non-compliance with the exchange rate convergence criterion.
We are pleased to note that, when we talk about the figures relating to development in Sweden, the remaining convergence criteria are being complied with even more comfortably than in the past. However we have yet to deal with those two elements which I hope can be resolved in the future. You know what our position is in relation to them. In the legal field, the Central Bank’s independence system must be adapted. With regard to the exchange rate criterion, we have to apply the Treaty; but, as I have said many times, we will have to take account of past experiences without a doubt.
I personally believe that the adoption of the euro would be beneficial to Sweden and I hope that that country will soon fulfil the necessary conditions. I also believe it would be beneficial for the European Union and for the eurozone in particular, since it would represent a significant advance in our process of integration.
I would like to stress that the document for this year is of a more strategic nature than usual, insofar as it is a document which intends to define the broad European strategy for the next three years. It is true that it is being produced in a situation of particular economic uncertainty, it is true that we have given certain indications on how to act in the event of asymmetric shocks, where naturally monetary policy must be used, when there may be sectoral repercussions, a situation in which we will undoubtedly have to use specific instruments of a different nature or if we experience those unusual events which are laid down in the Community legislation and which allow us to act also in terms of budgetary policy, while accepting however, the limits of 3% laid down in the Treaty.
Mr García-Margallo has insisted on the need for a healthy macroeconomic policy and clearly supports the Stability and Growth Pact. I believe we take the same approach and we have no great difficulty in accepting his recommendations.
He also refers to a point which we all believe to be fundamental and that is how we can increase the growth potential in Europe. Unquestionably through an increase in employment and productivity. We know that increases in productivity – you have referred to this yourself – and growth in employment are also closely related to the evolution of salaries, and that it is essential that salaries are compatible with reasonable evolution of employment and with increases in productivity. But it is also essential – and this is the approach we adopted in Lisbon – to improve education and training. We believe it is also essential to implement more appropriate taxation in order to achieve these objectives and of course to carry out more public and private investment. I will discuss this in more detail when I come to the report by Mr Trentin.
In this regard, we consider it essential, within the Lisbon framework, to define the appropriate framework for both public and private investment to be carried out and to make progress on certain fundamental elements. In recent weeks there has been an element which I would like to stress, which is the approval of the Community patent, which will undoubtedly be an innovative element and which will allow for greater European innovation and of course to define public expenditure according to criteria which will improve productivity or production.
The broad guidelines for economic policy, however, should not be seen independently from the Stability and Growth Pact. Mr Trentin refers to this point when he points out the need to approach the Stability and Growth Pact jointly in Lisbon. I believe we all agree that restructured public finances are essential not only in terms of allowing monetary policy to play its role, but also in order to provide the necessary margin so that the automatic stabilisers can function in a cyclical situation. However, Mr Trentin raises something else: what more can we do, in relation to the Stability and Growth Pact, in terms of growth? How can we ultimately improve the quality of public finances?
In his report, Mr Santos also stresses this point, which I would like to focus on further. I believe that the key lies in greater investment in research and development. We have set certain specific objectives on this point, since public investment in this sector functions satisfactorily but nevertheless there are more deficiencies with regard to the functioning of the private economy.
The Stability and Growth Pact, however, as modified in the Communication in November, introduces an additional element in relation to this policy so that it may further promote development in Europe. It is true that the pact provides us with the initial means for achieving budgetary balance or a situation of surplus in the medium term."@en1
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