Reflection Paper on the Deepening of the Economic and Monetary Union by 2025

ECON-VI/025
Adopted

Reflection Paper on the Deepening of the Economic and Monetary Union by 2025

Christophe ROUILLON
Christophe ROUILLON
Member France
Mayor of Coulaines
 christopherouillon@orange.fr
 +33 2 43743518
 FR, DE
Commissions: CIVEX-VI , ECON-VI
 Adoption: 30/11/2017
 Theme: Economy and Finance
Commission: Commission for Economic Policy (ECON-VI)
Strengthening LRA involvement in the European economic governance, the European Semester and EMU deepening; Stressing concerns regarding local and regional finances and SGP; Reinforcing the interinstitutional role of the CoR in this area.
On 21 December 2017 Mr Rouillon explained the position of the CoR on EMU to the congress of the French mayors (congrès des maires fraincais). On the plenary meeting of 30 November 2017 Commissioner Moscovici mainly agreed with the main statements of the CoR opinion stating that "The euro area is now enjoying strong growth, but it still suffers from persistent economic and social divergences. These are unsustainable and risk fuelling political divisions. Our goal is not to build a transfer union, but a convergence union – one which more effectively marries responsibility and solidarity, risk sharing and risk reduction.".
THE EUROPEAN COMMITTEE OF THE REGIONS  supports a convergence strategy that would complement existing European policies to strengthen economic, social and territorial cohesion and build on the following proposals: i) creating euro area fiscal capacity, including preparations for accession to the euro area, to establish incentives to promote social and macroeconomic convergence; ii.) turning part of the European Stability Mechanism (ESM) into an integrated non-monetary European instrument; iii) establishing a convergence code supplemented by a system of incentives for structural reforms, the scope of which would be defined according to their European added value;  is opposed to euro area fiscal capacity being made a euro area budget heading in the EU budget while the own resources ceiling remains fixed at 1.23% of EU GNI. In this scenario the amount of capacity would be completely inadequate for providing aid for structural reforms, playing a stabilising role, acting as a backstop for the Banking Union and serving as an instrument for pre-accession assistance for Member States not using the euro. There would also be a risk of a crowding out effect on EU policy financing such as the ESIF;  calls for genuine democratic involvement of the European Parliament and consultation of the CoR and the social partners prior to adopting country-specific recommendations under the European Semester;  considers that the February 2016 Council agreement on flexible application of the Stability and Growth Pact (SGP) should also be confirmed in EU primary law. The CoR reiterates, in this context, its calls for public investment by local and regional authorities and ESIF co-financing not to be included in structural expenditure.
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