Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-02-22-Speech-2-033"

Predicate	Value (sorted: default)
rdf:type	lpv_eu:Speech2
dcterms:Date	"2005-02-22"^^xsd:date2
dcterms:Is Part Of	lp_eu:Economy/Public finances2
dcterms:Language	"sv"^^xsd:language2
lpv:document identification number	"en.20050222.4.2-033"2
lpv:hasSubsequent	lp_eu:2005-02-22-Speech-2-0342
lpv:speaker	lp:Lars Wohlin2
lpv:spokenAs	unknown; Junilistan (2004-07-20--2006-09-27)3 member; IND/DEM (2004-07-20--2006-09-25)3 member; Delegation for relations with the countries of Southeast Asia and the Association of Southeast Asian Nations (ASEAN) (2004-09-15--2007-03-13)3 substitute; BUDG (2004-07-21--2006-09-25)3 member; ECON (2004-07-21--2007-01-14)3 member; Temporary committee on policy challenges and budgetary means of the enlarged Union 2007-2013 (2004-10-14--2005-06-08)3
lpv:translated text	"Mr President, growth in the EU is clearly below what it potentially could be. The EU has high unemployment; it has a current account surplus in respect of other countries; and the figure for inflation is lower than that aimed for under monetary policy. As the report emphasises, there is a great need for structural reforms. The report does not, however, do enough to emphasise quite a few countries’ need for a more expansive policy. One cause of the unduly restrictive policy is the way in which the Stability and Growth Pact has been designed. In my opinion, it is wrongly constructed, which leads to an unduly restrictive policy in certain countries. The mistake lies in focusing too much upon the budget deficit. Instead, the focus should be on the debt ratio. A country with a debt ratio of less than 60% of GDP and which keeps inflation below 2% will have a decreasing debt ratio if its economy grows in real terms by one percentage point or more and if the budget deficit amounts to 3%. If a country’s economy grows by 5% and if inflation is at 2%, the nominal GDP will increase by 7%. The budget deficit could, then, amount to 7%, and the debt ratio would be stable in the case of such a deficit. Such a country would not put any strain on the eurozone. The increase in debt would be stable and therefore defensible in the long term. The country ought probably to have a sound credit rating and ought not to constitute any credit risk for the eurozone as a whole. Such a budget deficit is defensible in the long term. A limited deficit of 3% means that the national debt is continually decreasing as a percentage of GDP. Because a debt ratio of 60% of GDP is reasonable in economic terms, there is no reason to force such a financial restriction upon the country. It is only natural for new, rapidly growing countries to have significant deficits in their balance of current payments and capital imports. Private savings may perhaps not be sufficient; the state too may have a budget deficit. The conclusion to be drawn from this is that countries with debt ratios of less than 60% of GDP and with inflation under control should be allowed to grow more quickly and to conduct a more expansive policy. In this way, the whole of the EU would be given a boost. I recommend that the Stability and Growth Pact be altered along these lines."@en1

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