Vooruitgang in hervorming economisch bestuur EU (en)
Negotiations between the Council and the European Parliament (EP), over the package of six legislative proposals aimed to reform economic governance are progressing well, said András Kármán, Minister of State for Tax and Financial Regulation of the Ministry of National Economy, at the EP’s plenary meeting on 11 May 2011. He was reporting on the measures that have been taken to recover from the public debt crisis, shaking the European Union and the Eurozone.
Primarily, it is the Member States’ responsibility to ensure that their public finances are sustainable and stand on solid ground. However, this does not mean that public finances and economic performance fall outside the scope of European Union interests, András Kármán reminded in his speech. “We are linked together by the single market and, in many cases, by the common currency and the consequent deeper economic integration,” the Minister of State said, adding that, “We are all ambitious to create a stable and strong economy in the entire EU, including the Eurozone.”
According to Mr Kármán, there are many means available to achieve this goal. There are coordination mechanisms, which are meant to ensure that each Member State pursues an appropriate economic and budget policy, he said in reference to the package of six legislative proposals aimed to strengthen economic governance. “The updating and reinforcement of these mechanisms are progressing well,” the Minister of State pointed out. He also added that as part of the comprehensive response to the financial crisis, the EU has established the European Financial Stability Mechanism, which allows the provision of EU support to any member state within, or outside the Eurozone.
Ireland, Greece and Portugal
He reminded that last December, an agreement was concluded on the programme of the 85 billion euro aid to be provided to Ireland. This will be regularly reviewed in cooperation with the new government. Mr Kármán said that the ECOFIN Council will review the performance of the programme’s first quarter, at its meeting on 17 May.
The Minister of State welcomed the efforts of Greece. Greece has madea long way, from the highly difficult situation last year, its budget adjustment programme, is broadly on track, and is already introducing a part of the reforms necessary for achieving the programme’s medium-term goals, he said. Mr Kármán recalled that Member States involved in bilateral lending, agreed in March, to reduce the interest rate by 1 percentage point; and to extend credit maturity, which is also considered as a positive result. Now a discussion is underway about the technical details of the implementation of the agreement, he added.
At the beginning of April, Portugal’s caretaker government asked the EU for financial aid. The Euro Group and the 27 Member States, reached an agreement over the financial assistance to be provided to Portugal, at their informal meeting, in Hungary on 8 April. According to Mr Kármán, negotiations between the Portugal authorities and the troika comprising of the European Central Bank, the Commission and the IMF have been concluded, and the agreement, which prescribes the system of policy requirements for the financial aid, is ready to be signed. The Council is expected to endorse the financial package at its meeting on 17 May.
András Kármán reminded that the Hungarian Presidency was not directly involved in all in-depth negotiations, because some of them were within the remit of the Euro Group. “Nevertheless, the Presidency is committed to have a share of the job and will help to adopt all measures that are necessary for resolving the current problems,” the Minister of State underlined.
The package of six legislative proposals - responsible and flexible approach is needed
Reflecting on the debate, the Minister of State highlighted that although the banking system had a significant role in triggering the financial crisis, it would be wrong not to admit that problems largely derived from the lack of budgetary discipline, the deterioration of competitiveness and inadequate coordination of economic governance in the EU. In this context he mentioned that two elements of the EU’s comprehensive response to the crisis fall within the Presidency’s competence. One is the implementation of the European Semester, a new economic policy coordination cycle, the other is the package of six legislative proposals, and the Presidency treats both as priorities.
He said that the implementation of the European Semester is progressing according to plan. There is also intensive work in the inter-institutional trialogues on the package of six legislative proposals. András Kármán said: the Presidency intends to present the most important points of the European Parliament’s proposals at the finance ministers’ meeting on 17 May, in light of which it would request a mandate from member states for reaching a political agreement on the legislative proposals by June. We need a “responsible and flexible approach” from both the Council and the EP,” the Minister of State added. He said that the agreement in June could give a favourable signal to markets, demonstrating that EU institutions are capable of cooperation.