In an in-depth interview with Euractiv PES interim-President, Sergei Stanishev, argued that the important elements missing from the summit decisions are granting the European bailout fund a banking licence, introducing eurobonds, introducing a financial transactions tax, and a "real plan" for investment and growth.
On the decision by the UK’s Conservative-led Government to walk away from the table, Mr. Stanishev said that; “First we had casino capitalism, now we have casino politics”. He added that; “like most conservative governments, they are more obsessed with internal party politics that the future of European citizens. This was a ‘win or bust’ approach to politics”.
The deal agreed at the summit is designed to make austerity or “stability” the guiding principle. Fiscal rule of structural debt is not to exceed 0.5%. Although the fact that for the first time a more refined approach to deficit is introduced at EU level is encouraging, this provision is only intended to be in addition to the 3% SGP rule – rather than a replacement. Thus the draconian limitations imposed by the 3% rule remain. In addition, the excessive Deficit Procedure (EDP) (3% public budget and 60% GDP/debt ratio), is to be strengthened.
The European Court of Justice (ECJ) is set to have a role in how the so-called ‘automatic correction mechanism’ is transposed at national level. While this does not equate to full ECJ powers to rule on national budgets, it is seen by the PES as a step in the wrong direction.
The European Central Bank (ECB) has also been given the possibility to provide ‘technical support’ for the European Financial Stability Fund (EFSF) and buy bonds only on secondary markets. The European Stability Mechanism is set to start in July 2012.
In summary, this draft plan is a clear and historical signal of what a Conservative majority in Europe means for ordinary people. In the past, the European Union succeeded because any advance on the single market or on monetary union was always balanced by improvements in social Europe. This is not the case this time. The absence of a growth strategy and solidarity is striking.
There is a huge risk that the absence of proposals on Eurobonds, on an EFSF banking license, and on a coherent Investment strategy, could lead to an absence of public support.
