english french german greek italian lithuanian russian serbian spanish
Home arrow newsitems arrow EU's Almunia to EuroFora on Eco Stimulus plans, before London G-Summit : Keep the Rules or Opt-out !

EU's Almunia to EuroFora on Eco Stimulus plans, before London G-Summit : Keep the Rules or Opt-out !

Written by ACM
Wednesday, 25 March 2009
imag0967_400_03


    EU Commissioner on Economy and Finance, Joachin Almunia, replying to 3 "EuroFora" questions in Strasbourg before next week's London Global Summit, made it clear that all EU Member States must, more or less, respect EU Rules on the Monetary Stability Pact when they draft their Economic Stimulus policies, unless they want to "Opt-out" of EuroZone, as the UK has already done...

  Several EU Countries must correct imbalances in rather strict Time deadlines, and this is not an  "impossible task", but "a very possible and attainable task", as Almunia told us. But it's only the UK which could practically ignore EU's calls, "because of the Opt-out they have"....                                                                                                                                           

acm_3_questions_to_eu_commissioner_almunia_02 

       The issue got a larger, EU-wide and even Global Political dimension, one day later at EU Parliament, when USA's new President, Barack Obama's call on Europe to augment Spending against the Economic Crisis at the eve of G-20 Summit, was considered by some EU officials, (as EU chair, Czech Prime Minister Topolanek or EU Commission's President Baroso, etc), as partly deviant to Euro-Zone rules of the EU, whose priority now seems to be a new, multi-polar agreement on the Regulation of World's Financial Markets, to avoid similar abuses and crisis in the Future.  

 Even if he appeared as partly sparing for the moment some of EU's driving forces, as France or the UK, Spain, etc, who got more Time than others, Almunia stressed that, as a matter of principle, all EU Member States should comply with the same rules, applied according to the particular situation of each one of them.


        The results of EU Commission''s check on 5 EU Countries : France, the UK, Spain, Greece, Ireland and Cyprus, gave, at first, an impression to some that a "difference" was made "between EU Countries", as an Italian journalist said.

        F.ex. paradoxically, Greece seems to have, in comparison, some better indicators than other EU Countries checked this week :

    * Deficit in Greece, after reaching 3,7% of GDP in 2007, is estimated at 3,7% in 2008, over 3% in 2009, and exceeding 4% in 2010, according to EU Commission's forecast, (while the Greek Government tabled on just 3,2%). Only Cyprus does better, with a lower deficit than the threshhold of 3%.

    France comes next, whose deficit aims for 2009 and 2010 were revised upwards at 5,6% and 5,2%. In Spain, it's expected to arrive at 6,2% in 2009 and 5,7% in 2010.

    But in the UK, Deficit estimates mount at ..9,5% in 2009/10. In Ireland, the deficit already reached 6,3% in 2008, and is expected to rise up to 11% in 2009, and 13% in 2010 !

(../..)

 

    * On Growth, Greece "has a higher percentage ..than the EU average", observes EU Commission : "Real GDP Growth reached +4% in 2007, before decelerating at +3% in 2008", the year of the Global Crisis, revealing that "Greece enjoyed a Good Economic period in 2007 and 2008".


    In the other 5 EU Countries, Growth figures are less good, for the moment : Cyprus, after a +1% Growth in 2008, may fall in recession in 2009 with -1%. In Spain, after a + 1,2% GDP Growth in 2008, estimates give a - 2% contraction in 2009. In France, after a +2,2% GDP Growth in 2007, the 2008 estimate was +0,7%. But Ireland's GDP decreased - 2% since 2008. And for the UK, EU Commission forecasts a "sharp contraction" all over 2008-2010.

    - Despite that, Almunia asked  from Greece "to bring the deficit down from 3%" as soon as in 2010, and wants to see efficient measures on October !  And Cyprus is asked to "stop" its Stimulus plan "next year".

    On the contrary, from Spain and France he asks results only in 2012, i.e. 2 Years later, and from Ireland in 2013, i.e. 3 Years later. As for the UK, Almunia replied to "EuroFora"'s question by asking measures only .."when the revival of the economy will allow"...

    This difference made some Journalists (from Italy, France, etc) suspect some kind of "differenciation" between EU Countries :

    - "This gives the impression that there might be a Difference inside the EU between some Big Countries, which get more Time, and some Small Countries, which are asked to comply with Stricter rules", criticized an Italian Journalist.

    - "In Greece, the estimated Deficit is Lower then in the other countries, while Growth also continues". On the contrary, "in Ireland, the Deficit is much Higher, and is due to worsen, because there are more pesimistic forecasts on Growth, with a faster and larger Downfall of production", Almunia replied.

"In Spain and France, the deficits are between Greece's and Ireland's", while revival is still awaited.  Thus, "we (EU Commission) dont' ask the same things" in the other 3 countries as in Greece, which "can move faster".

    But, in fact, the real cause of this otherwise astonishing difference, seems to be an "old problem of  Debt, which exists since Many Years from the Past" (i.e. since previous governments, before 2004), as "EuroFora" asked Almunia, who did not deny : The problem in Greece clearly is that it inherited from the past a gross public Debt which "remained at 98,4% of GDP in 2007", diminished a bit in 2008 (94,6%), but is estimated to grow at 96%in 2009 and 98%in 2010, according to EU Commission's data.

    On the contrary, in Ireland the Debt was only 40,6% of GDP in 2008, and wouldn't breach the 60% reference before 2010. In Spain it's 40,3% in 2008, and 53% for 2010. In the UK it's expected to rise to 70% in 2013/14. In France it's estimated at 67,1% in 2008 and 73,9 in 2009, 77,5% in 2010.

    - "Why this Acceleration in Greece ? It's not only because it has less deficit, and not only because it has a Positive Growth percentage, and, thus, can act earlier, with accessible measures". "But also because there are 2 Facts on which is needed the utmost Care, during this period of (Global Crisis) : An  External Imbalance, with a  big and persisting Current Accounts' Deficit, and also a very big level of Debt, compared to its GDP", Almunia added

    However, the EU Commissioner looked optimist in reply to an "EuroFora"'s question if he believed that "such an old problem, which exists since many years, could be settled in 1 year" :

    - "It's not an impossible task. It's a very possible and attainable task", replied Almunia to our question, reminding that "in a previous occasion", when "Greece had received a recommendation for the correction of an excessive deficit, ..it was corrected", between 2005 and 2007. .And "the Greek Government is convinced that, for their own interest, not only because they want to comply with the EU framework, but for the interest of the Greek Economy, this correction of the deficit is warrant".

    But even Cyprus, whose Debt, estimated at only "49.3% of GDP in 2008, is projected to decline to 44.2% of GDP in 2012", is advised to stop its Economic Revival Plan in 2010, in order to prevent risks imbalances in the future, because of the current Global Crisis' environment.  Asked by "EuroFora" to "explain, in a crystal-clear way", why Cyprus, with a lower deficit than the 3% threshhold and a diminishing debt, according to EU Commission, should take Restrictive Measures now, Almunia focused on the Crisis' impact :

    - "In the case of Cyprus, we (EU Commission) consider that the Fiscal Stimulus should not continue Next Year (in 2010)", he confirmed. Because "we think that the figures on the Economy of Cyprus from 2009 to 2012, ..can become a little bit worse, given the evolution of the (Global) economic Environment". And "Cyprus' Pulic Finances, over the Long term, have problems of Sustainability : We have analyzed that in the Past, and the situation has not changed from the Structural point of view". "At the same time, as Greece, it has a Current Account Deficit, and in this moment, in this (Global) Crisis, the persistence of a current accounts deficit is an important macroeconomic imbalance, that requires the contribution of adequate fiscal policy to be corrected".

    In other words, in itself, nothing new...

    In contrast, UK's particular situation among the 5 EU Countries checked, revealed more clearly the main issue :

    The EU Commissioner was asked by "EuroFora" to explain the "strange example given to other Countries" by the UK, where, despite some negative figures (see above), even if the measures earlier advised by the EU were "not taken", and a Time "Deadline wasn't met", EU Commission does nothing else than simply .. issue a new recomendation, advising again to take more such measures and ..postponing the Time Deadline for later.

    After insinuating that "the UK case", might not be the right, but a "bad example" for other EU Countries, Almunia admitted that he asks from London to simply "correct the imbalances..... as soon as possible, once the recovery will come back" !

    But he explained "the repetition of recommendations in the case of the UK", by observing that "we (EU) cannot go beyond this step, because of the Opt-Out they have"....

    However, it's the "own interest of the British Economy to correct" that, he concluded.
 
imag0965_400 

    Indeed, some MEPs  teased, the same day, British Prime Minister Gordon Brown, (who visited Strasbourg to discuss the preparation of the forthcoming Global London Summit), for keeping too many "Opt-Outs" from EU Rules, as fex. the Leader of "Greens/ARE" Group, Italian MEP Monica Frassoni. Going even further British Liberal MEP Graham Watson, leader of the "Liberal/Democratic" Group, launched a call for UK's entry to the EuroZone !..
    
    More pragmatic, French President Nicolas Sarkozy, has already declared that it seems always possile and desirable to forge a special status for the UK to get together with EuroZone. Thus, he reminded the useful, even if partial, participation of Gordon Brown to the decisions taken by the 1st, Historic EuroZone's Heads of State and Government Summit, in Paris, on October 12, 2008, which was the first to be succesful in starting to make Stock Markets move in a positive direction.
EUDigitalMedia

Statistics

Visitors: 18075539

Archive

Login Form





Remember me

Lost your Password?
No account yet? Create account

Syndicate

RSS 0.91
RSS 1.0
RSS 2.0
ATOM 0.3
OPML

Other Menu

 sarko_merkel_press_400

    Before the end of 2009, France and Germany will take strong initiatives to open "new Horizons" needed by Europe and the World, going well beyond the current Crisis' management, anounced French President Nicolas Sarkozy and German Chancellor Angie Merkel, reassuring that both a judgement on Lisbon Treaty by nearby Karlsruhe German Federal Court, and the forthcoming National Elections in Germany would confirm their capacity to act.    

They were replying to Press questions in Berlin, after key-regional elections on Sunday, where Merkel's ChristianDemocratic party kept everywhere a strong 1st and won the possibility to forge a New Majority with Liberals at the largest of 3 Landers : Saxony (4 millions inhabitants), while its main competitor, the Socialdemocrat party fell to unprecedented lows : Tackled by the small "Linke" (left) party in Saarland (1 million inhabitants), it became even smaller than it in Saxony and Thuringen (3 million inhabitants), where SPD arrived only third. While its usual partners, the "Greens" also fell down, contrary to CDU's new partners, the FDP Liberals, who go up.

german_regional_vote_400

    - "At any case, at the end of the year (2009), if things go as scheduled, we shall take strong initiatives, showing that Europe needs a Franco-German axis, as well as the World, even if it never excludes other" countries to join, replied Sarkozy to a question if France and Germany will revive the "European dream", by "relauncing the EU motor" for the Future, with actions going further than the mere management of the global crisis, (as it was done fex. in the Past with the creation of the "Euro" Monetary zone, etc).

    - "I am convinced that the Franco-German friendship must be constantly nourished by New Projects", he added."There are many areas of cooperation where we intend to take, very soon, some Franco-German initiatives, which will allow to open more Horizons" to the EU, Sarkozy stressed.

    But if "we don't speak about that now, it's only in order to avoid interfering in important elections coming in Germany", he observed. However, "we have already started to consider the Future with the (German) Chancellor, and what we can do in order to honour our predecessors". "We are already speaking about that, and we are preparing things". "I am working very well together with Mrs Merkel, and I wish that it goes on", Sarkozy concluded.

merkel_sarkozy_eu_flag_400

    - "It's important for EU's credibility that France and Germany advance forward together", stressed Merkel from the outset. "Don't worry about Germany's capacity to undertake initiatives" with France, she added. "France and Germany will be perfectly able to make proposals" for the EU.

    -  "After-crisis" plans must be prepared, meanwhile, with measures "advancing progressively", Merkel anounced. And, for the short term, we must deal also with EU Citizens' dismay since they feel that it's a Scandal for some in the Financial Markets to be paid with excessive "Bonuses", etc, she agreed with Sarkozy.

    - "Abuses in financial markets must stop", stressed also Sarkozy. Backing Merkel's announcement that France and Germany call for an EU meeting to forge "a crystal-clear European position" in view of the G-14 Summit at Pittsburg, he warned that "everyone will have to undertake his responsibilities, in front of World's Public Opinion. particularly those who don't want to make the same effort of regulation as France and Germany".

    Moreover, "Global Trade cannot be correctly dealt, without taking into account also Environmental and Social rules", Sarkozy added, referring to recently expressed positions against Unfair Competition via Environmental and/or Social Dumping, (See earlier "EuroFora"'s publications).

    Such moves are obviously linked to the need to ensure at least an elementary respect for Human Rights by Third Countries, (f.ex. exploitation of Children's work, etc) in order to avoid, precisely, any such Social Dumping.

    - "EU has Values, protecting Human Rights and Human Dignity", and "it cannot close its eyes" in front of grave violations, particularly "Torture and/or killings", added, indeed, Sarkozy.

    Thus, "the time comes, where decisions must be taken". But, in case of "Sanctions", "all International opinion should be convinced of the need to take action", he observed.

    Expressed on the occasion of recent developments in Iran, the same principles should logically apply also to other similar cases, including fex. that of Hundreds of ECHR judgements' condemning f;ex. Turkey for grave crimes, (as Torture, brutal Killings, Enforced "Disappearances", Destruction of Family Homes, harassments and oppressive violations of Freedom of Speech, etc).

    Meanwhile, questioned on (EU Commission's chair)  Barroso's bid to succeed himself for a second mandate, they both expressed a "wish" or a "feeling" that "EU Parliament"'s various political Groups might fix a date for decisions "during September". However, is he is endorsed before the entry into force of the Lisbon Treaty, it will be legally necessary to re-vote anew for a full term of office afterwards, according to EU Legal Experts, revealed recently in Strasbourg the experienced former President of EU Parliament's Constitutional Committee, German Socialist MEP Jo Leinen. And Germany will not vote for Lisbon Treaty's ratification but only "on September 8 and 18", revealed Merkel, ( i.e. after EU Parliament's plenary session in Strasbourg).

    - Therefore, "for EU Commissioners' appointment, it's too early yet, because we must wait for the ratification of Lisbon Treaty" by all 27 EU Member countries, including naturally Ireland's Referendum on early October, said to "EuroFora" the influential President of EU Parliament's largest group of MEPs, Joseph Daul, expressing, however, the hope that a controversial deal with the head of the Socialist Group of MEPs, Martin Schultz of Germany, might hold for Barroso alone, at a forthcoming vote due to fix the Strasbourg plenary's Agenda.

    But MEPs reportedly just "postponed" for 1 week all their previously scheduled group meetings (See : http://www.euractiv.com/en/future-eu/barroso-unveil-summer-homework-week/article-184825 );

    However, while the choice of a new EU Commission's President by EU Parliament is supposed, according to many MEPs' wish, take place according to EU policy issues, paradoxically, this would mean that Barroso's bid would pass before even the anouncement of France and Germany's "initiatives" for EU's "new Horizons"...

Polls

2009 EU Elections were won by Parties against Technocracy and Turkey's controversial EU bid, while the 1999-2004 Majority Abstention trend decelerated. What should be done in 2009-2014 ?

Results

SMF Recent Topics SA

Copyright (c) 2007-2009 EIW/SENAS - EuroFora.net. All rights reserved. ISSN 1969-6361.
Powered by Elxis - Open Source CMS.