The Socialists and Democrats in the European Parliament today expressed their disappointment with the Commission’s proposals on a budget for the eurozone.
S&D Group spokesperson on economic and monetary affairs, Pervenche Berès stated:
"The 2008 financial crisis made it clear that the eurozone needed a specific budget to help its members cope with macroeconomic shocks. Since then, the Socialists and Democrats have campaigned for such a reform.
"Today, the European Commission has proposed two instruments: a reform support programme and a European investment stabilisation function. Neither of these tools will be sufficient. They merely represent an embryonic of a budget for the eurozone, and are not up to the challenge of building a strong economic and monetary union. The eurozone needs a real budget, not a token effort.
"With its €25 billion, the so-called reforms support programme will not serve as an incentive to increase the economic convergence between members of the eurozone. The risk is that member states will get financial support to liberalise further the labour markets or reform their pensions system. And, the need to invest to foster convergence is ignored.
"As for the stabilisation investment function, the recognition of the need for such a tool is welcome but the resources - €30 billion - are ridiculously low. It cannot serve the purpose of supporting countries facing a deep recession or the consequences of a financial crisis. It is also based on loans, which means some lessons from the current crisis have still not been learnt.
"We will keep the fight to strengthen the Economic and Monetary Union. We believe that, in the long-term, the European Stability Mechanism (ESM) should be further developed and turned into a European Stabilisation Fund (ESF) with adequate lending and borrowing capacities and a clearly defined mandate.
"Any further step towards a deepening of the EMU will have to go hand-in-hand with stronger democratic controls. To this end, the role of the European Parliament and national parliaments will have to be strengthened."