Former Prime Minister Alfred Sant told the European Parliament that the European Commission should apply flexibility equally and fairly to all economies, not just the bigger ones. The Maltese Head of Delegation at the S&D was speaking on a resolution on the EC’s approach to stimulating growth and job creation in the eurozone in 2015.
Dr Sant was ‘Shadow’ rapporteur on behalf of the S&D on the committee that presented this resolution, an important milestone on the coordination of EU countries’ economic policies in 2015. The report passed with a majority of 437 votes to 249 and 11 abstentions.
Alfred Sant said the analyses and conclusions in the ‘Annual Growth Survey’ are well in line with the parameters of the Stability and Growth Pact (SGP). ‘Yet we lack a real understanding as to why the economic performance of national economies has remained so dull, indeed stagnant. Similarly we cannot grasp the real reason why the investment gap in the eurozone has remained so significant. True: we see glimmers of growth now and wish for the best. Rightly much emphasis is being placed on the flexibility that is presently being read into SGP rules. The too rigid application of these rules has been counterproductive. Let us hope that flexibility will be applied equally and fairly to all economies, not just the bigger ones.’
Alfred Sant said that structural reforms are necessary but these should not mean an erosion of the European social model. Where structural reforms refer to elimination of monopolies, freer access to the provision of services, curtailment and digitalisation of government bueaucracy, incentivising those who produce, streamlining public procurement practices, the encouragement of public-private partnerships – such reforms should be given full support.
Dr Sant said that we do not have a viable approach to tackle regional and national divergences within the eurozone, and they have been increasing. ‘I am uneasy because having a nineteen economy system working to the model of quasi-balance in all national budgets is not axiomatically the optimal way to run a currency area. Yes, we have jargon laden discourse to correct for so-called macroeconomic imbalances. But there is a vagueness about how to implement corrective action on its basis.
Dr Sant said there still is no valid reply to the question: are country specific recommendations designed to satisfy eurozone or national priorities? ‘Therefore I am not too surprised that so many recommendations are ignored by national parliaments and governments. In the absence of a central treasury to regulate transfers between centre and periphery much of the exercise that we are carrying out could be compared to that of a circus performer on a high rope juggling with nineteen balls. Of course in order to succeed, even such a juggling operation needs commitment, discipline and a high level of competence.’ concluded Dr. Sant.