Local view for "http://purl.org/linkedpolitics/eu/plenary/2009-01-13-Speech-2-300"
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"en.20090113.28.2-300"2
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"While the experiences with budgetary coordination have, overall, been positive, some lessons can be drawn. The analysis of the first 10 years reinforces the case for strengthening the effectiveness of budgetary surveillance in good times. It also shows the need to address broader issues which may affect the macroeconomic stability of a Member State and the overall functioning of economic and monetary union.
It thus contains adverse effects of expectations of rising deficits and debt on risk premia and private consumption and investment.
Fiscal policy coordination should better guide national budgetary behaviour over the whole cycle – that is, both in good times and in bad times. Increased attention should be paid to monitoring public debt developments while medium-term budgetary objectives should be strengthened to address implicit liabilities. All these kinds of developments call for deeper budgetary surveillance.
But surveillance should also be broadened to take account of developments within Member States that may affect budgetary sustainability, such as the growth of current account deficits, persistent inflation divergences, persistent divergences in the evolution of unit labour costs, or trends of unbalanced growth.
Surveillance must build on the existing instruments. The key instruments for fiscal policy surveillance and economic policy coordination are clearly anchored in the Treaty and, indeed, in the Stability and Growth Pact.
The recent adoption of the European economic recovery plan by the Commission on 26 November last year also breaks new ground as far as governance and budgetary coordination is concerned.
It highlights the Commission’s role as a catalyst for short-term emergency economic stabilisation policies. Based on our own economic assessment, the Commission has quickly set up a fully fledged and quantified economic response to the economic slowdown. The Commission’s quick delivery is a response to the clear risks of bigger-than-ever national economic policies at this juncture.
The recovery plan recognises the inherent division of tasks embedded into the EU economic policy framework. Since Member States are responsible for budgetary policy, the Commission set a global target for additional fiscal stimulus, taking into account the amount needed to kick-start the EU economy as a whole.
Member States are free to devise the size and composition of their respective fiscal stimulus. It now implies challenges in terms of coordination and surveillance of the implementation of national measures. The Commission and the ECOFIN Council will jointly monitor the implementation of the national measures in compliance with the principles laid down in the recovery plan.
Looking forward, judicious implementation of the fiscal surveillance framework will anchor expectations of future fiscal developments. Together with the strengthening of national budgetary frameworks and rules, and the implementation of reforms curbing the rise in age-related expenditure, this will ensure that sustainable positions are restored."@en1
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