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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
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    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"....                                                                                                                                           

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       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.
 
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    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.
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    Scientific innovation joined to Faith for Human Rights, Eastern Partnership and fight against the Crisis, but above all, the need to overcome the "Crisis of Trust" from EU Citizens, are the main priorities for new EU Parliament's President, Polish Jerzy Buzek, that a 555-votes-strong majority of MEPs on July 14,  Strasbourg made a living symbol of the fact that, 20 years after the fall of Berlin Wall (1989 - 2009) there is no more an Eastern or Western Europe, but only one Europe, as the head of the largest group of MEPs, ChristianDemocrats/EPP, Joseph Daul, stressed after the event.

    Speaking later to a group of Strasbourg's Journalists, including "EuroFora", the new EU Parliament's President clarified his stance on concrete topical issues, as f.ex. that of Turkey's controversial EU bid, which was one of the main issues of the June 2009 Electoral campain, clearly won by his party of ChristianDemocrats/EPP :  - "At present, Turkey does not fullfil none of EU conditions", he stressed, (See infra).

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    Buzek is well known in Strasbourg and to "EuroFora" as EU Rapporteur for the Framework Program of Scientific Research and Development of Technologies. A Natural Science Professor from the Historic and Religious landmark Polish City of Częstochowa, active in the famous Solidarnosk grass-roots social movement, he served 4 years as Prime Minister (1997-2001), before being elected as MEP in 2004 and 2009, after he brillantly won the latest EU Election at the head of his party (EPP) almost doubling the number of its MEPs from 15 to 28 !

    - "Innovation" and "Energy safety", as well as fight against the "Cimat change", but also "Eastern Partnership", the "Mediterranean", "Strategic partnerships" with Russia, the USA, etc, and the search for "solutions to the Economic Crisis" that EU Citizens "expect" from us, will be his "priorities", announced from the outset the new EU Parliament's President, reminding also that the quest for "Human and Civic Rights" played an important role in his experience with the Solidarnosc grass-roots social movement in Poland's History

    But, the most important of all, is the urgent need to overcome the "Crisis of Trust" between EU Institutions and the People he stressed : - EU "Citizens often don't understand us", denounced Buzek, launcing a call to "do anything for EU Citizens to understand our work" in EU Parliament : "We (MEPs) need to make EU Citizens involved" in "what we are doing every week, in Strasbourg and Brussels", he proposed. Pointing f.ex. to the hot "Debates" with "strong arguments" exchanged between MEPs during the preparation of their Legislative Decisions, in Committees, delivering often hard struggles between initially opposed points of view, long before forging a majority at the final vote, sometimes more than a year..

    Therefore, EU Parliament will be "open to your criticism, for discussion and exchange of views", he promissed to Journalists in Strasbourg.

    In this way, Buzek, in fact, highlighted "EuroFora"s main idea, that we strongly advocate since 1997-2007, to systematicaly and actively involve EU Citizens in public debates during the decision-making process of important EU measures, which affect their lives and the society in which they live, (and not only just a few weeks each 4 or 5 Years at the eve of EU Elections)...
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    This is related also to the symbolic gift that Buzek chose to give to the out-going former EU Parliament's President, Hans Gert Poettering, (2007-2009), his collegue in the ChristianDemocrats/EPP, who brillantly won 2009 EU Elections in Germany : A genuine statute of sainte Barbara crafted in Silesia's black Coal by Polish Miners : Those simple but strong people who fought for social change against some technocrats and bureaucrats disguissed into so-called "real-socialists" of old times. (PHOTO).

    It's enough to have seen a popular open air mass, at Warsaw's center, with many thousands of people, old and young, simple workers and intellectuals mixed together, with references to Poland's history and struggles for survival and liberty, through various ages, (as fex. that organized at the eve of CoE's 2005 panEuropean Heads of State and Government for the beatification of late Pope John-Paul II), in order to understand what such symbols mean..

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    But, overcoming the "Crisis of Trust" with EU Citizens obviously implies also to rectify any errors done in the past, fex. on Turkey's controversial EU bid, with controversial decisions taken in 1999 and 2004 to give a "candidate" status and to start EU negotiations, provoking an unprecedented series of 3 "No" to EuroReferenda and 3 Majoriy Abstentions in EU Parliament Elections : 1999, 2005 and 2009, (even if the latest one succeeded to decelerate and almost stop the drop of participation rates, opening hopes for vote's revival after an electoral campaign clearly critical to Turkey's claims in several mainstream EU countries)
    
    Therefore, Buzek was faced with manifold critical Questions on EU Enlargement, most of them citting concrete examples of certain political problems  :  But his replies were almost always given as a matter of general principle :

    F.ex. Questioned on the suspension of EU - Croatia talks because of a Border conflict with EU Member Slovenia, Buzek prefered to speak about principles :

- "We know that during Enlargement, the process can be blocked by failure to resolve this kind of issues",  This concerns also other enlargments' cases", and "these rules are always in force" he warned.


But Buzek avoided to directly reply to a queston on "French and German EPP' calls to define the Borders of Europe", as a German journalist asked him by making a reference to French President Nicolas Sarkozy, and German Chancellor Angie Merkel's, critical statements on Turkey at the June 2009 Electoral campain.    

- "Concerning Enlargement, there's always the same rules : There have to be Criteria, which have to be respected if a Country wants to join the EU", he started to simply reply.

- "For my country (Poland) it took us 15 Years to fullfil these Criteria", Buzek reminded, indicating, if proportions are kept, that Turkey, fex. would have to spend some 25 years before eventually joining the EU..

- "Countries wishing to join the EU need to Change their Systems", as we (Poland and other former Eastern European Countries) did, he stressed.

- "'For me, meeting the condition of Human Rights is one of the Key conditions for membership in the EU", preferring again to speak from the point of view of General Principles, on the occasion of an untimely question on Serbia (which is not even a candidate yet)...

- "Turkey" has, "first of all", to fullfil (EU) Copenhagen criteria". Bevause, currently, none of them is fullfiled by Turkey", New EU Parliament's President, denounced, speaking later to a group of Journalists, including "EuroFora".

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In particular, on Human Rights :  - "We (EU) can never forget Human Rights", because "this is at the very Foundations of the EU", Buzek added.

On the contrary, when he referred to EU Enlargment for the  "Western Balkans Countries ", Buzek appeared upbeat, finding "promising situations", despite "difficulties" in the Past, since "Countries are queuing to become EU members", and this "generated changes", as he said.

As for Russia, Buzek observed that it was a "very important" country, located "in the same Continent", Europe,  "close to our borders", and "we need eachother". "But Russia' has 'differend poblems : "They claim that their system is Democratic, but rules are differend", and we must be "aware of such differencies", fex. "on Human Rights", that we can't ignore, as he said;

Concerning China, where a journalist observed that the recipient of EU Parliament's latest "Sakharov prize" for freedom of thought is "still in prison", Buzek found that since the 1999 events in Tien Amin square, "we see differencies on Human Rights still today", and expressed his "support" for those who try to ameliorate the situation.

On the contrary, speaking recently to "EuroFora" he strongly supported the idea for an EU - Ukraine cooperation, fex. between Airbus and Antonov, in order to build a  less costly but more performant than the old and problematic A400M, new Military Transport Airplane : - "They (Ukranian Antonov Company) can certainly do it. I'm sure they can. It's a good Idea, and I'd be glad if it was done", he told us. (See : http://www.eurofora.net/newsflashes/news/airbusantonov.html )


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