Maltese MEP Alfred Sant said that the European Union lacks policies that counteract national and regional divergencies which are on the increase. Dr Sant, Shadow Rapporteur on behalf of the S&D group, told the ECON meeting in Brussels that though the overall aim is to achieve full economic convergence within the European Union, the truth is that instead, divergences are growing and we still lack a comprehensive framework within which to launch policies that counteract both national and regional divergences. Dr Sant’s intervention came on the first exchange of views on the report ‘European Semester for economic policy coordination: implimentation of 2015 priorities’ presented by Dariusz Rosati.
"Some of us here do not want at all that economic and monetary union be turned into a transfer union. But the reality is that we already are in a transfer union – one by which systemically the rules are benefitting certain economies, which happen to be among the stronger. This is causing a systematic transfer of resources from certain regions to other regions through trade and financial flows."
Dr Sant said that the ‘Country Specific Recommendations’ (CSRs) cannot be the right tools by which to deal with the problem and we should be aware of this. The situation in Greece shows us that further political risks could be waiting in the shadows in the other Eurozone countries. Unless the reduction and elimination of economic divergences are given maximum priority, the effective implementation of CSRs will continue to be problematic.
Dr Sant said that the way by which CSRs are drafted, need to be critically evaluated. They are tools that are being used in the absence of more organic structures that a deeper economic and monetary union would be able to deploy. However the agents who propose the recommendations are not necessarily or invariably infallible.Based at the Commission or wherever, they too can make mistakes.’ Remarked Alfred Sant.
For instance, they seem to share the oversimplified view that structural reforms have a mechanical and automatic impact on jobs and growth so that, if all countries reform their labour markets at the same time, the extra demand coming from more jobs being created will automatically spill over from one Member State to the next.
To put it differently, said Dr Sant, alternative policy options to what they propose could quite likely be more effective to stabilize economies and generate growth. One has to reflect therefore on the effectiveness of past CSRs as well as on the need to carry out social impact assessments of recommendations. "Perhaps too we should have post hoc assessments of the social impact of major CSRs that have been adopted in the past. Too many CSRs are applying rigid criteria that do not take into account regional contexts and interconnections," Dr Sant said.