A4-0378/97

Resolution on Economic Policy Coordination in Stage 3 of EMU: Common Ground and Ways Forward (II/523/97 - C4-0574/97)

The European Parliament,

- having regard to the document of the Commission dated 22 September 1997 'Economic Policy Co-ordination in Stage 3 of EMU: Common Ground and Ways forward (Note for the Monetary Committeee)' (II/523/97 - C4-0574/97);

- having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies ((OJ L 209, 2.8.1997, p. 1.)),

- having regard to Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure ((OJ L 209, 2.8.1997, p. 6.)),

- having regard to the resolution of the European Council on the Stability and Growth Pact adopted in Amsterdam on 17 June 1997 ((OJ C 236, 2.8.1997, p. 1.)),

- having regard to the resolution of the European Council on growth and employment adopted in Amsterdam on 16 June 1997 ((OJ C 236, 2.8.1997, p. 3.)),

- having regard to its resolution of 29 May 1997 on the Commission's recommendation for the broad guidelines of the economic policies of the Member States and the Community for 1997 ((OJ C 182, 16.6.1997, p. 27. )),

- having regard to its resolution of 10 June 1997 on the coordination of fiscal and taxation policy in the Monetary Union ((OJ C 200, 30.6.1997, p. 38.)),

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy and to the opinion of the Committee on Employment and Social Affairs (A4-0378/97),

A. whereas, in spring 1998, pursuant to Article 109j of the EC Treaty, the decision will be taken on the list of Member States fulfilling the conditions required for the adoption of a single currency and whereas the third stage of the economic and monetary union will enter into force on 1 January 1999,

B. whereas Article 3a of the EC Treaty provides for the adoption of an economic policy which is based on the close coordination of Member States' economic policies, on the internal market and on the definition of common objectives, and whereas, pursuant to Article 103(1), the Member States regard their economic policies as a matter of common concern and coordinate them within the Council,

C. whereas, in its abovementioned resolution on growth and employment, the European Council called for a strengthening of the links between a successful and sustainable Economic Monetary Union, a well-functioning internal market and employment,

D. whereas the rate of job creation can benefit from the coordination of economic, budgetary and fiscal policies of the Member States aimed at strengthening the endogenous growth potential in the European Union,

E. whereas Monetary Union will play a vital role in speeding up the process of integrating the European economies and their transformation into a genuine domestic European market, which will then constitute a fully- fledged economic entity,

F. whereas the degree of interdependence achieved by the economies of the Member States, which will increase further during Monetary Union, strengthens the economic consequences on their partners of the national measures taken by the Member States,

G. whereas the introduction of the Euro as from 1 January 1999 will bring an end to the artificial separation which has hitherto been maintained between Community policies which relate to the internal market and those linked to the establishment of Economic and Monetary Union,

H. whereas, despite the progress achieved in the sphere of economic and social convergence over the last few years and the efforts made by the Member States to meet the convergence criteria relating to inflation, the budget deficit and public debt, disparities of development persist in the Community,

I. whereas, as things stand, the coordination of economic policies and multilateral surveillance, albeit strengthened by the abovementioned Council regulations of 7 July 1997 and the resolution of the European Council on the Stability and Growth Pact adopted in Amsterdam on 17 June 1997, are still not enough to guarantee the development of a coherent, dynamic European economic policy which is thus more conducive to growth and employment,

J. whereas regular talks between the social partners at European level are particularly necessary in order to analyse and take into account the interplay between wage increases, monetary policy and productivity trends,

General principles

1. Takes the view that increasing real convergence among the economies of the Member States, in particular through closer coordination of their economic policies, is vital to the cohesion and stability of the European Union;

2. Proposes that this closer coordination of economic policies should be based on a three-fold approach:

- clearing the way for the adoption of a coherent and effective economic policy at Union level,

- ensuring a democratic public debate on European economic choices,

- improving the decision-making process, its effectiveness and its transparency;

3. Points out that all the EU Member States should participate in this closer coordination of economic policies and multilateral surveillance in accordance with the provisions of the Treaty and the abovementioned Council Regulation (EC) 1466/97;

Economic policy instruments

4. Notes that, during stage 2 of EMU, the annual economic report and the broad economic guidelines have served to reinforce the convergence process and have largely repeated what was already found in the convergence programmes of the individual Member States; strongly urges that their remit be broadened during stage 3 of EMU so that they provide genuine added value over and above the stability and convergence programmes which will be prepared by individual Member States;

5. Proposes, therefore, that the recommendation for the broad guidelines of the economic policies should:

- ensure that the monetary pillars of EMU are counter-balanced by an economic pillar;

- determine the orientative targets for key economic variables ( public spending on investment, growth of gross domestic product in real terms, employment, inflation and wage trends) in order to establish a policy mix conducive to growth and employment;

- gradually incorporate the Community economic policies linked to the internal market (competition policy, internal market, industrial policy, R& D, commercial policy);

- take full account of the objectives laid down when the guidelines for employment are drawn up;

6. Calls for the synchronisation of the procedures set up in the Treaty of Amsterdam for the establishment of economic and employment guidelines, in order to ensure improved coordination between macro-economic and structural measures; calls also for the explicit inclusion of the employment guidelines (Article 128 of the Treaty of Amsterdam) among the instruments for coordination, in order to ensure that the policy mix is conducive to price stability, sustainable growth and job creation; asks, therefore, for the holding of joint meetings of the Social Affairs and Ecofin Councils, at least once every six months, to monitor the implementation of economic and employment guidelines;

7. Takes note of the possible creation of a Euro Council, but urges that, even if the structure is an informal one, the Commission should participate in it to the full extent of its competences; also expresses concern as to the intergovernmental nature of this proposal;

8. Calls on the Commission, as part of the multilateral surveillance process, to study in particular the consequences of unsuitable economic and budgetary policy measures taken by the Member States which are likely to have an adverse impact on other Member States and/or the stability of Monetary Union and, where appropriate, to exercise the right to make recommendations conferred on it by Article 103(4) of the EC Treaty;

9. Urgently requests the Commission to present a study to the Parliament and the Council examining different mecanisms for dealing with assymetric shocks which are exceptional in scale and which could prove prejudicial to the functioning of Monetary Union;

Strengthening of democratic supervision and social dialogue

10. Is convinced that the public debate on economic policy and its democratic dimension requires, in particular:

- the active, formal participation of Parliament in the process of supervising the management of Economic and Monetary Union, particularly as regards the coordination of economic policies and multilateral surveillance,

- the establishment of genuine dialogue between the social partners at European level and, to that end, calls on the Commission to consider, using the procedure provided for in Article 118b, and if the social partners regard it as desirable, the establishment of an annual conference involving the social partners which will enable them, on the one hand, to give their views on the functioning of the labour market and wage trends, for incorporation into the Commission's annual economic report, and, on the other, to deliver an opinion on the draft recommendation for the broad economic guidelines;

11. Takes the view, further, that Parliament's institutional role and democratic responsibility, as the representative of the citizens of the European Union, authorizes it to maintain an ongoing dialogue with the European Central Bank in order to seek an optimum degree of complementarity between monetary policy, with its primary objective of safeguarding price stability, and an active economic policy to foster competitiveness and employment, while respecting to the full the independence of the Central Bank; undertakes, in order to be fully equipped to assume these new responsibilities, to set up within its own services a unit devoted to economic analysis and forecasting similar to the STOA facility;

12. As called for in its abovementioned resolution of 10 June 1997, considers that the European Parliament should have access to a Committee of European Parliament economic advisers, made up of recognized experts and responsible for producing once or twice a year a report on the economic situation and recommendations based on political objectives given to them by Parliament;

13. Urges, also, the Member States to offer their parliaments the best possible arrangements at national level for participating in the discussions on the framing of the broad guidelines of the economic policies of the Member States and the Community.

Improvement and transparency of procedures

14. Calls on the Commission, in accordance with the Treaty, to exercise to the full its role and its responsibility in the process of multilateral surveillance and the coordination of economic policies and hopes that, to that end, it will make active use of its right of initiative and to make proposals;

15. Takes the view that the current structure of the Commission's annual economic report, forming as it does the first stage of the procedure concerning the broad guidelines, must be revised in order to supply those involved in the European economy with a sufficiently detailed analysis of future economic conditions and draw up an assessment of the measures taken the previous year;

16. Believes that the role of the European Parliament in the procedures set out in Articles 103 and 104c of the EC Treaty should be strengthened; calls in particular for Parliament's opinion on the broad economic guidelines to be published at the same time and in the same way as the recommendation adopted by the Council;

17. Considers that, if the Economic and Financial Committee referred to in Article 109c is to be fully able to accomplish the tasks entrusted to it, the Member States must ensure that they appoint to it representatives whose terms of reference cover both budgetary and economic policy;

18. Regards it as essential, in order to ensure the requisite degree of transparency in the decision-making process for the coordination of economic policies, that the Economic and Financial Committee referred to in Article 109c should be heard regularly and/or at the request of Parliament's committee responsible;

Implementation of the proposed provisions

19. Calls for the proposals drawn up in this way to be the subject of a secondary legislative act or acts to be adopted in accordance with the provisions of Article 103(5) of the EC Treaty, possibly accompanied by a resolution of the European Council emphasizing, in particular, the commitment to genuine transparency in the European economic debate;

20. Takes the view that those aspects which cannot be the subject of laws must be dealt with by means of an interinstitutional agreement, thereby reiterating the call it has made repeatedly since the adoption of the Treaty on European Union;

21. Instructs its President to forward this resolution to the Commission and Council.