Local view for "http://purl.org/linkedpolitics/eu/plenary/2003-03-11-Speech-2-269"
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"en.20030311.10.2-269"2
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".
Mr President, I would like to thank everybody who has taken part in this debate for the ideas and issues proposed and raised.
If I am asked whether we should be satisfied, I must say that we have made progress, but not that we should be entirely satisfied. You have raised some of the elements of concern to us all. You have said that it is essential that what is agreed is fulfilled. I completely agree with this principle and I believe it is one of the essential faults we currently have in our coordination system. Others have referred to the need to pay more attention to compliance with what is agreed and not to agree new things. This is why in the broad guidelines for economic policy we are paying much more attention to application reports than to the definition of new broad guidelines, which we propose should be tri-annual.
With regard to the Stability and Growth Pact, however, we have also constantly insisted on the need to achieve greater ownership on the part of the various Member States. It is essential that the Member States accept and reiterate their commitment to complying with the Stability Pact and that that commitment is not simply formal, but that it is made reality. Only if we are able to make progress on all these elements will we have a departure point which will allow us to grow rapidly when the economic context changes.
I believe that our fundamental balances are in a relatively comfortable position at the moment. We are aware that our growth rates are relatively low. We are aware that we are being very much affected by external factors and that we have not been capable of being more independent from them, but we believe this is an excellent departure point for confronting the problems which may arise in the future and for taking advantage of opportunities for growth in the best possible way at the point when they arise.
I believe we have dealt well with the Union’s two great instruments for coordinating economic policies, the broad guidelines for economic policies and the Stability and Growth Pact, instruments which, although they are linked, must not be confused.
It is the case that, since the Lisbon strategy was drawn up, the broad guidelines for economic policy have essentially been aimed at improving the Union’s growth potential. It is also the case that we often tend to compare what happens in the European Union with what happens in the United States in a rather simplistic way. We must not forget that, for example, it is not the same to compare growth in productivity in the United States and the European Union with growth in productivity per hour in the United States and the European Union. To put it another way, when we compare the United States with Europe, we know that in the United States the population is growing more, there is more active population and more hours are worked. There are clearly other factors involved in terms of productivity and which affect the labour market.
This apart, however, there are two elements which I do believe to be important. They are both in our synthesis report. What has happened between 1999, when we launched the Lisbon process, and now? We have seen that, in terms of employment growth, the Union has grown more rapidly than in the past and we have come closer to the activity rate of the United States. Nevertheless, our productivity has decreased in comparison with the United States. This highlights that there are certain elements which are failing in the European Union, which are clearly related to the labour market in a broad sense, but which also relate to the deficiencies in the internal market, to the financial market, to lack of investments and to training and all those elements we have tried to introduce in the priorities, particularly for 2004, which we presented to the Spring Council, in order to improve our capacity and productivity in the future.
Within this context, is the Stability and Growth Pact an obstacle to recovery in Europe? I believe not. I believe that the Stability and Growth Pact is a guarantee which will allow us, when we are able to improve our growth capacity and there is the possibility of growth, to make use of it in the best possible way.
The Stability and Growth Pact, by means of automatic stabilisers, has provided the Union with clear fiscal impetus. We must not forget that, in very broad simplistic terms, each point that activity falls implies more or less a half a point increase in public deficit, which is approximately double what usually happens in the United States.
Does a further discretional fiscal policy in the Union make sense? We believe that an asymmetric shock clearly raises problems which are not going to be resolved through elements of general taxation policy. Asymmetric shocks must be resolved through defining monetary policy and only in very exceptional circumstances does discretional fiscal policy make sense in the event of an asymmetric shock. However, we have introduced the room for manoeuvre into the pact which I referred to earlier, but we have introduced it in connection with that Lisbon growth potential.
I know that, in relation to the elements I have just mentioned with regard to the pact, you may say to me that these instruments count in those countries with budgetary positions below 3% in terms of deficit. And this is true. The Commission believes – and I am personally convinced – that the 3%, in nominal terms, should be the fundamental anchor of our entire system. We must define a reference which is untouchable for everybody and I believe that that is the reference we have to work on. But it is not a reference which we have defined and to which we are too stubbornly attached and which cannot be changed. Let us imagine simply what the budgetary situation would be in those countries which began with relatively low budgetary deficit definitions if we had allowed the growth in public deficit to function, as has happened in the United States for example.
It is the case that, in our system, those countries which exceed the 3%, at times with less fall in activity, must behave in a somewhat procyclic manner, but that situation is the result of not having fulfilled the obligations to reduce deficits in situations of higher growth. In summary, I believe the instruments we have will allow us to confront the current situation with a certain degree of coordination."@en1
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