Local view for "http://purl.org/linkedpolitics/eu/plenary/2004-04-22-Speech-4-038"
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"en.20040422.2.4-038"2
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"Madam President, Romano Prodi recently stated that recovery in Germany and Italy is non-existent, which means that this year will see a continuation of all the same old uncertainties, doubts and risks as to economic recovery in the euro zone.
All this statement does is carry over the pessimistic forecasts made by the Commission for 2004 into the political field. This then is the background against which we must analyse how Europe’s economic situation develops in the framework of the broad economic policy guidelines. We cannot continue to dodge the issue. We do in fact have at our disposal powerful theoretical instruments, such as those resulting from the Lisbon Strategy or arising from the good practice associated with economic policy coordination. We also have powerful limitations, however, such as those resulting from too strict an interpretation of the Stability and Growth Pact (SGP), which demolish all the efforts we make.
The issue is becoming more and more political, or, put another way, a matter of choices, and while it is true that there can only be long-term, sustainable economic development with financial consolidation, it is also true that there will be no financial consolidation, even in the short term, without economic growth. Europe needs a new agenda, focusing on the problems of the economy and employment, in place of the current agenda, focusing on the budget deficit and public spending, which have become a veritable obsession. What Europe really needs is structural reforms, but it also needs the financial means to carry them through. In the early stages there will always be an increase in public spending or a reduction in revenue, and that can only be possible with a profound change in the budgetary rules in force. It is at this point that delays begin to occur to the proposals for a review of the Stability and Growth Pact announced by the Commission, especially if these proposals focus on the essence and are not confined to sweetening the regulatory aspects of control.
Reform of the SGP is inevitable, partly because this instrument has, strictly speaking, been suspended since 25 November. The new rules can no longer ignore the changes in the economic cycle, or fail to take account of each Member State’s individual situation without prejudice to the efforts to achieve budget conciliation for the whole euro zone. They certainly can no longer ignore the role of public investment and quality spending in the framework of development. Aiming at a zero budget deficit in the euro zone over the long term is complete folly, is not supported by any economic theory and would result in the absurdity of a public debt that would, after all, be no better than zero.
I believe these concerns are to be found in the excellent report tabled by Mrs Christa Randzio-Plath, to whom I offer my warmest wishes, because the dealings I have had with her over the last three years have shown her to be a woman who is capable, competent, determined and profoundly pro-European."@en1
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