By Martin Banks - 20th October 2010
This threatens a sustainable recovery and job creation
Olli Rehn
EU commissioner Olli Rehn has told MEPs that the European commission's proposals for improved economic governance will make a "quantum leap" towards a "true, well-functioning" monetary union.
The commission's current budget review sets out how the EU could raise and spend its finances after the current financial framework ends in 2013.
It contains the possibility of EU charges on air transport, a separate EU VAT or an EU corporate income tax.
Addressing parliament on Wednesday, Rehn, responsible for economic and monetary affairs, said action was necessary as there were signs of a "re-emergence" of the problems that led to the financial meltdown in Greece.
He told MEPs that this "threatens a sustainable recovery and job creation".
The Finnish official said the "credibility of the EU" hinged on finding ways of preventing a repeat of the conditions that led to the current economic downturn.
He said, "It is essential for the EU to reform its own economic governance and that is why the commission will table new legislative proposals."
Rehn said the commission was "committed" to pressing for a global financial transaction tax with another option being a "financial activities tax".
He said parliament, which under the Lisbon treaty now enjoys increased budgetary powers, would have a "crucial role" to play in achieving such objectives.
He was speaking in Strasbourg during a debate on the upcoming G20 summit in Korea where the current recession is expected to be top of the agenda.
Speaking in the same debate, EPP leader Joseph Daul reminded the commission that parliament is now co-legislator and "will play its full part in defining the reforms to come".
The French deputy said, "For the EU these (financial) reforms consist of putting our public finances - national as much as community - back in order, and in defending our currency, the euro, by consolidating it internally and defending its value in relation to the other major global currencies."
The EPP group, he said, welcomed proposals tabled by a taskforce headed by European council president Herman Van Rompuy which call for a strict sanctions system for those member states that don't respect the criteria set out in the stability pact.
His comments were echoed by French MEP Rachida Dati who told the plenary she believes the stability pact, which is supposed to ensure member states' economies do not fall foul of EU monetary rules, "needs to be strengthened."
The former French government minister added, "The Greek crisis has shown that economic governance of the EU is being undermined and, while we need to look at the root causes of this, we also need to strengthen the stability pact with tough sanctions for offenders. This is vital for long-term recovery."
Irish MEP Seán Kelly agreed, saying it was "time for the EU to get tough", pointing out that, in Europe, there was 11 per cent unemployment, 20 per cent youth unemployment and "massive" public debts.
S&D leader Martin Schulz said, "Europe is being led in the wrong direction, both institutionally and in substance."
He called for investment to bring about growth, calling it "the basic requirement to stimulate jobs".
French Socialist Pervenche Berès, who presented the report of a special parliamentary committee on the social, economic and financial crisis, said the crisis would cost the world "60 trillion dollars or the equivalent of one percentage point of growth every year."
She said, "We call for a strong commitment to the added value that our European project brings in order to get Europe out of the crisis and ensure that tomorrow Europeans will have work, will escape poverty and will have more faith in the EU."
Looking ahead to the G20 summit in November and next week's summit in Brussels of EU prime ministers and heads of state, Luxembourg deputy Robert Goebbels said, "Europe is in a bad way.
"It is time these summits produced rather than coming out with so many empty words and promises that are never followed up."
Further comments came from Polish MEP Danuta Hübner, chairman of the regional development committee, who said "Europe does not exist in a vacuum" while
On Tuesday, EU budget commissioner Janusz Lewandowski confirmed that he is considering the introduction of an EU-wide VAT.
Presenting his budget review to parliament he said there should be "no taboo areas" in looking at future funding for the EU.
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