A roadmap to get out of it

A “roadmap” to get Europe out of the crisis and focus on growth was presented by the President of the EU Commission, José Manuel Barroso, to the European Parliament on 12 October in preparation for the summit of heads of state and of government of the Twenty-Seven due to be held on 23 October. The list of proposals advanced by the Executive from 2008 to the present day to counter the recession, rebalance public accounts, and define a solid financial and banking system is by now long. The debate on the crisis held in the EP underlined the urgent need for cohesion of response and prompt action throughout the Euro-zone and also at the EU27 level.“Courage and political will”. Addressing the European Parliament, Barroso reviewed some of the main problems that Europe is now facing, from those of Greece to the recapitalization of the banks, from eurobonds to the need to support investments, jobs and consumption to help kick-start growth in the EU. But apart from dwelling on the “technical” aspects, the Portuguese politician reaffirmed a concept he has repeatedly expressed in recent times: “The speed of the European Union should not be the speed always of its slowest states”, i.e. the countries most sceptical about EU integration. “At this time courage and political will are needed. We must recognize our growing interdependence and proceed to greater integration”. Barroso also addressed the “social” and “environmental” repercussions of the crisis. The rotating presidency of the EU (now assigned to Poland) and the main political groups of the European Parliament largely seem to support the approach enunciated by the Commission, though at the same time emphasizing, through their respective leaders, delays and uncertainties at the level of the institutions of the EU and of member states. Mikolaj Dowgielewicz, on behalf of the Polish presidency, stressed that “the next summit is extremely important, because it will be called to make decisions to protect not only the single currency but Europe as a whole”. The priorities of the present time “are to do with financial stability, governance, and our ability to re-establish confidence in the markets”.A comprehensive exit strategy. To return to Barroso’s roadmap, it is understood by the Commission as the way to “break the vicious circle of uncertainty over sovereign debt sustainability”, the stability of the banking system and prospects for growth in the Union. The aspects on which the Commission intends to operate are all interdependent. Barroso spelt out a five-point plan: “giving a decisive and clear response to the problems of Greece; enhancing the euro-area’s backstops against the crisis; making a coordinated effort to strengthen the banking system including through recapitalization; frontloading stability and growth-enhancing policies; and building a more robust and integrated governance”. Barroso explained: “The roadmap outlines a comprehensive exit strategy from the economic crisis. It’s no longer enough to give partial responses to the various aspects of the crisis. But we must act now. Only in this way can we convince our citizens, our partners throughout the world and the markets that our solutions are equal to the challenges that all the economies are having to address”. The head of the Executive believes it feasible to reach an agreement during the European Council on 23 October.Saving Greece, aiming at growth. The first point of the Commission’s document regards decisive action in responding to the problems of Greece: “in such a way as to remove any doubts and uncertainties about the economic sustainability of the country”. This includes paying “the sixth tranche of the loans to Greece”, “an effective second adjustment programme, based on adequate financing through public and private involvement, backed up with robust implementation and monitoring procedures” and “continued support from the Commission’s specially created task force and maximised disbursement of structural funds focused on growth”. In the second place, the Commission wishes to complete the interventions relating to the Eurozone, by implementing the decisions adopted on 21 July, “maximising the efficacy of the European Financial Stability Fund”, bringing forward to mid 2012 the launch of the European Stability Mechanism and “acting in such a way that the European Central Bank makes available a sufficient volume of liquidity”. The third element of the roadmap concerns the reinforcement of the banking sector: a recapitalization is considered essential; it should have recourse especially to private capital, though without excluding the support of national funds. Lastly, in fourth place, come policies for development, which means “fast-tracking the most urgent growth-boosting proposals”, also through the rapid implementation of commitments already made in the services sector, energy market and free trade agreements, fiscal measures, and launch of so-called project bonds. Last but not least, the roadmap is aimed at realizing strong and integrated economic governance on the basis of the existing treaty (article 136) and reinforcing the community approach”. For example, this would means conferring new powers on Commission and Council “to intervene in the drawing up of national budgets and monitoring their implementation”.