ETUC invites European policy makers to balance national flexibility in the new Stability Pact with European coordination
By reinstating flexibility in the implementation of the Stability and Growth Pact (SGP), the European Spring Summit and the Economic and Finance Council (ECOFIN) have made it possible to introduce economic common sense in the rules that govern Europe’s fiscal framework.
It is now crucial to use the ‘new’ approach to the Stability pact in an intelligent way. Flexibility of fiscal rules at the national level should be balanced with coordination at the European level.
The Commission and the Council should ensure that:
A European framework is provided by relaunching the European Growth Initiative. Those member states that wish to make use of the new Stability Pact rules should be invited to draw up national plans that invest in the Lisbon priorities. Besides using the regained fiscal flexibility, these plans should also be financed by shifting existing expenditure and taxes and by increased use of the lending from the European Investment Bank. In this way, Europe can revive the Lisbon agenda while at the same time break out of its low-growth trap.
The Stability Pact indeed should ‘bite’ when the economiy is doing well. In that event deficits should be scaled down substantially.
All member states, taking into account their objective economic situation, are being treated in the same way.
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