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Words and facts
EU States, joint institutions and ECB are called to undertake their mutual commitments
There’s no Olympic truce for the euro currency. While London is disputing the five-circles competitions, the single currency remains at the centre of recurring voices, speculation-risk, summit and counter-summits, rescue plans, more or less convinced distancing. Over the past days, notably, given the need - or supposed need - for a move that would provide a safe harbour to Spanish finances, European policymakers felt obliged to jointly claim that ‘the euro can’t be touched’. From ECB president Mario Draghi, to Italian premier Mario Monti, passing by the German chancellor Angela Merkel, and French president François Hollande, a series of tranquilizing statements were pronounced, namely: we’ve got the tools, and the money can be found; the stability of the euro currency won’t be questioned, regardless the costs. Contradictory news on the urgent need for intervention in favour of Madrid, on the unhealthy public finances of other Countries, the worrying analyses on stock market swings, on the spread, on auctions and government securities yield etc., complete the picture … The volatility of modern financial market also thrives on uncertainty. But uncertainty is not what public finances, banking activity, real economy, enterprises and job markets need. Rather, it is necessary to establish a well-defined and stable framework whose solidity is ensured by Eurozone countries, ECB, international institutions - whether political, notably the European Union, or financial, such as the international monetary fund. Each one is called to do its share, and from this angle, North European countries vouching budgetary discipline are right. The soundness of domestic - i.e. National - finances comes first.
That said, there are various elements in the European Union which, although stated in recent weeks, even over the past few days, must be finalized to strengthen its currency, the markets, the real economy. Priority should be given to the so-called “firewalls” devised by Brussels to protect the Eurozone.
Difficulties, misunderstandings and suspicions between EU states and institutions are equally present, but both the European Council of March and late June have expressed willingness to implement specific measures in the short and medium term to ensure that speculation - which threatens the euro and the entire “common home” - is kept away from Europe.
At this point those commitments such as the anti-spread shield, banking union, shared governance ought to be activated…
Second, it should be remembered that plans agreed at the summit of June 28-29 include a compact for growth earmarking €120 billion to boost productivity, employment, trade, exports, consumption. And - third point - financial support to this approach should come in part from national accounts and in part from investments deriving from EU budget. To this regard, as reiterated on several occasions by Commission president José Manuel Barroso, the quick adoption of the multiannual financial framework for the period 2014-2020 is urgently needed to support competitiveness, research and innovation, job creation, agriculture and rural development, citizens’ interests, cooperation, and to promote international policies capable of addressing the ongoing challenges.
Once again, the concreteness that policymakers are called to implement must be greater that the aleatory features of mere words.
01/08/2012 - Gianni Borsa - SIR Europe