AGS – Shadow rapporteurship statement – 02/2015

As shadow rapporteur for the S&D, my thanks go to Mr Rosati for his proactive initiatives as rapporteur and to the other shadow rapporteurs for their stimulating inputs.
At the start of our exercise, I had characterised our point of departure as one where two different appreciations of the economic realities in Europe prevailed.
On the one hand, there are those among us who believe that fiscal consolidation plus so-called structural reforms are indispensable in and by themselves to generate the growth we all believe is indispensable for Europe.
On the other hand there are those, among whom I count myself, who believe that fiscal and financial stimulus has become imperative if European economies are to start rolling.
In the past few weeks, I could confirm that this assessment about our state of mind as a committee is very close to the truth. So much so that frankly I’m a bit surprised we found scope for quite a number of compromises in trying to work towards a final text.
The reason for this may be that we did try to relate statements as much as possible to facts rather than leave them hanging out as isolated prescriptive conclusions. Also if expressed in a certain way, without losing their meaning, the different positions cannot be seen as necessarily mutually exclusive.
There has been, and still is a certain amount of terminological drift. For instance on the meaning of “structural reforms”.
I am one of those who believe in the need for them, but they must be of a certain kind, certainly not related at all to a dilution or erosion of the European social model. Some of us believe this is necessary by way of rollbacks on minimum wages, containment of pension entitlements, or reduction of social benefits. These I am totally against.
But where structural reforms refer to elimination of monopolies, freer access to the provision of services, curtailment and digitalisation of government bueaucracy, incentivising those who produce, streamlining public procurement practices, the encouragement of public-private partnerships – such structural reforms should be given full support.
Naturally the ambiguity in defining what some concepts we bandy about with much ease relate to, has been helpful in achieving textual compromise on the draft we have before us. However, I wonder whether it will be equally helpful in the quest for economic and social convergence.
The AGS exercise is a useful one in terms of the European semester. It gives us an opportunity to assess how national policies are shaping up and how they are contributing to the overall development of the European economy as a whole.
Still, we lack a comprehensive framework within which to launch policies that counteract national and regional divergences. The approach has been, still is, to make incremental improvements to the economic governance framework. The hope is that eventually the steps taken will compensate for the structural economic and political deficiencies of the European economy that we would all like to see grow much more strongly than it has been doing in recent years.
The dogma of fiscal consolidation has become a policy formula that defines changes in the guidance and surveillance system by which national economic policies are implemented.
The results have not been brilliant. Admittedly as this report, as amended, illustrates, it is also a question of whether one judges whether a glass is half empty or half full. Things could have been much worse. At least we now acknowledge on left and right that the current rules as drafted have to be applied with flexibility in the light of changing economic conditions especially in the context of globalisation. That has been a very useful development that needs to be affirmed further.
But matters certainly have not improved as swiftly in Europe as they have in the US or elsewhere.
Why is this?
As we approach the end of the AGS exercise, I do not think we have a clear reply. Events in Greece show that a popular rebuttal of our approach can achieve democratic success.
We are here as politicians not as economic experts.
In all honesty, we should admit that the choice made by the Greek electorate could mobilise other electorates to take decisions that go in the same direction, no matter what happens to the current negotiations with the new Greek government.
In my view, they would be right to do so.
We should beware that all too soon, the question that could arise among the peoples of Europe would be: all this is to the benefit of who? Cui bono? That would be a very divisive question.
It would mobilise contrasting perspectives from north and south, east and west.
It would strain the coherence of the exercise we are working on with the AGS of the European semester.
I apologise if I have taken your time with considerations that appear distant from the goals of the exercise we have at hand.
To be frank, I’m not convinced that such points as I have raised should be considered to be so distant from our goals in the current exercise.
The tools we have at hand, including those that are being envisaged for the foreseeable future, are not sufficient to tackle the economic and social divergences that were always there and now seem to be growing.
The basic challenge in this regard is political.
This should be evident to those who, whether on the left or the right, look at the document we will be voting on regarding the annual growth survey covering our member states.