I have recently been appointed rapporteur on the economic governance package within the Employment Committee. What does this package consist of?

The crisis has shown that there have been some serious deficiencies in the way that European markets and the financial sector are regulated and supervised. The Commission has put forward a number of proposals, some of which have been adopted and others that are still in the pipeline. In previous articles I have discussed the supervisory package that has been adopted by the institutions and will enter into force in January 2011. This will consist in the supervision of both macro and micro prudential systemic risks in relation to financial institutions.

Substantial progress has also been made with regards to the regulation of specific sectors that have contributed to the economic turbulence that plagued financial markets during the crisis. This is clear in the context of Credit Rating Agencies as well as Alternative Investment Fund Mangers. The AIFMD has in fact just been adopted this week in the EP.

We have understood however that the economic health of Member States within the EU and especially the Eurozone is intrinsically interlinked. The recent possible demise of Greece for instance would have severely destabilised the entire Eurozone. In this case Member States had no option but to bail Greece out. Budgetary discipline and the use of windfalls to address deficits rather than increasing spending could have prevented such a situation from occurring. The key instrument for fiscal policy co-ordination and surveillance is the Stability and Growth Pact (SGP), which implements the Treaty provisions on budgetary discipline. The reality is that Member States have failed to abide by the SGP and that the possible remedies for non-adherence with the Pact are ineffective, both in substance as well as with regards to timing. Waiting until a Member State is in dire straits prior to imposing sanctions makes it all the more likely that such sanctions will not be imposed. Indeed in such a situation it is clear that prevention would be better than cure.

The Commission has put forward a package of 6 dossiers that will regulate such matters. These dossiers will address the modification of Excessive Deficit Procedure (EDP), the SGP, budgetary frameworks and the surveillance of national budgets as well as the monitoring of macro-economic imbalances. While these Reports are the primary competence of the Economic and Monetary Affairs Committee, the Employment and Social Affairs Committee has been asked to formulate Opinions on these dossiers that will eventually be included into the main Report.

These dossiers are not lacking in complexity and could prove to raise a number of contentious issues. I was also responsible for the Parliament’s non-legislative dossier that preceded the Commission’s legislative proposals. Through this Opinion we have already established the Employment and Social Affairs Committee’s stance on many of the issues currently being tackled. We have established the need to avoid sanctions on Member States that would interfere with structural funds related to employment and in particular those funds that are targeted at the individual citizen. We have also shown the need to further strengthen the Employment Committee (EMCO) and to provide for the effective surveillance of employment trends, shifts and statistics. From a budgetary perspective we have shown the need to ensure adequate long-term planning that will safeguard pension, social protection and healthcare systems.

We have established a clear position on these issues that is supported by MEPs across party lines. It is now our job to further expand on such positions and to push for their inclusion in the legislative acts that will result from the proposals that have only very recently been issued by the Commission. This is precisely what I will be occupying myself with in the coming months.

David Casa is a Nationalist MEP