Difficult accord” “

The EU institutions are in disarray in the run up to the spring meeting of the European Council (Brussels, 22-23 March), which will especially tackle economic questions, including the update of the Stability and Growth Pact and the reform of the Lisbon Strategy. STABILITY PACT: REFORM IN TROUBLE. The failure earlier this week of ECOFIN (meeting of the economic and financial ministers of the EU), which was supposed to lay the foundations for a rewriting of the Pact, does not bode well for the forthcoming summit, which should have the last word to say on the matter. The Stability and Growth Pact is the essential EU instrument to control inflation in the eurozone and place the necessary constraints on state budgets, so as to avoid excessive annual deficits (ratio of 3% deficit/GDP) or uncontrolled structural debts (60% debt/GDP). Many member countries have failed to comply with these ceilings, and calls are being made on various sides for a “relaxation” of the rules, in view of the economic recession now underway and the need to boost public expenditure to stimulate growth. But so far the national leaders have failed to reach an agreement: each seems to consider only the interests of his own country and not those of the Union as a whole. So every decision is being deferred. The President of the European Commission, José Manuel Durao Barroso, said he was aware of these difficulties, in his speech to the European Parliament on Wednesday, 9 March. ECONOMIC CompetitivENESS AND SOCIAL COHESION. The debate during the session of the EP also brought to light differences in view on economic issues between the three main institutions of the EU (Parliament, Commission and Council). On the other hand, the political forces represented at Strasbourg led to the emergence of common lines of interpretation, which resulted in the approval by a large majority (514 votes in favour, 110 against and 20 abstentions) of a Resolution on the reform of the Lisbon Strategy. According to MEPs, this strategy “must be the absolute priority of the European Union for the next five years”. In the chamber, deep-seated misgivings were expressed about laissez-faire economic policies, more concerned with competitiveness than with social cohesion, which is one of the main planks of the Lisbon Strategy. Sustainable growth and employment represent “the main objectives that the Union must pursue”, it was stressed more than once during the debate. To reinforce the results of the European economy, moreover, “the need for a strong and well-conceived social and environmental policy” was underlined. The main paragraphs of the Resolution insist on the need for structural reforms to restore vigour to European competitiveness and to businesses (by realizing trans-European networks, investing in research and in the information society) and for greater “flexibility of the labour market”. The Resolution also calls for the “promotion of the entrepreneurial spirit”, “simplification of the tax system”, and new and substantial investments in the training of human resources. MEPs seemed suspicious about any radical changes being made to the Stability Pact by national governments: to revive the economies, they also underlined the need for “a stable currency, the reduction of the public debt and state deficits, and the consolidation of social security systems for the elderly”. POSITIVE SIGNALS ALSO EMERGE. To mark International Women’s Day on 8 March, Barroso and Commissioner Vladimir Spidla also presented in Strasbourg the Commission’s project for an institute that would have the task of promoting equality of rights and opportunities between men and women (the name and the seat of the organization are still being defined). They also announced that the institute will be able to count on allocations amounting to 52 million euros in the period 2007-2013. In terms of the campaign against terrorism, the Commission has given a mandate to EU Commissioner for Justice, Franco Frattini, to draft a specific action plan. Forming part of the so-called Strategy of The Hague, “the project ought to enable the Union – said Frattini – to close ranks and go forward united to prevent new attacks”, “dismantle terrorist cells present in the continent”, “co-operate with other countries and international organizations in pursuing the same objectives”, and protect the victims. The first anniversary of the massacres in Madrid will be commemorated by an act of remembrance in the seat of the European Parliament on 11 March. The Twenty-Five, lastly, prepared the Euro-Mediterranean parliamentary assembly (Cairo, 12-15 March) to assess relations between the EU and its Mediterranean neighbours 10 years after the launch of the Barcelona process and monitor the situation in the Middle East and in Lebanon.