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Federalists warn against 'half measures' on Economic Government

October 30, 2010 2:00 PM

Andrew Duff MEP, President of the Union of European Federalists (UEF) and European Liberal Democrat spokesman on constitutional affairs, has welcomed the decision of the European Council (28-29 October) to revise the Lisbon Treaty. But he warns against half measures which will not provide the strong economic government needed to consolidate the eurozone and aid economic recovery.

In a statement following a meeting of the Federal Committee of the UEF in Brussels on Saturday, Duff said:

"The European Council has done well finally to accept the necessity of revising Article 122 of the Treaty on the Functioning of the European Union. The decision is a reflection of the fact that the structural imbalances of the eurozone are no longer just a passing crisis beyond control but a state of affairs that is permanent for the foreseeable future and which needs to be squarely addressed if Greece and other poorer states are to avoid defaulting on their sovereign debt.

"This is a major step towards turning the eurozone into a transfer union. Germany, the chief benefactor, is absolutely correct in requiring strict legal guarantees to back up the political commitments of its euro partners by way of treaty amendment. A simple revision of the Stability and Growth Pact would be insufficient either to ensure legal certainty or to convince the financial markets that the EU is serious about its economic governance.

"What is really needed, however, is a change of gear from mere coordination of national economic policies towards one common economic policy aimed at leveraging growth in the public and private sectors. The reform of the EU's budgetary policy and revenue system must be re-designed to take the integration of Europe's leading economies to a deeper level. We need to move from crisis management to a strategic approach for the long term."

As to the form of Intergovernmental Conference, Duff said:

"The urge to choose a simplified revision procedure (Article 48(6) TEU) is understandable. But this fast-track approach will only work if the express intention is not to confer more competence on the EU. Can we have serious economic government without more competence?

"Whatever happens, reinforced economic governance cannot be imposed without measures to enhance the popular legitimacy of the EU institutions. Electoral reform of the European Parliament which will also require a treaty revision is one essential accompaniment to the decisions taken yesterday by the heads of government."

Commenting on the efforts of the British prime minister to 'freeze' the EU budget, Duff added:

"By trying to reduce EU spending commitments, Mr Cameron missed the opportunity to make a positive contribution to the debate in the European Council. Contrary to his assumption, more Europe means lessening the burden on national treasuries. The transfer of big items of expenditure from the national to the European level such as R&D, trans-European transport and energy networks, foreign policy and defence will produce big cost efficiencies in ending duplication and in building economies of scale.

"Becoming fixated on the level of EU spending is futile and will impair the effective implementation of the Lisbon treaty. What matters is the value of spending at the EU level. Presidents Barroso and Van Rompuy should insist on this message as they take forward the decisions of the European Council in partnership with the European Parliament."

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Editors' Note: Andrew Duff (ALDE/UK) represented the European Parliament in the Intergovernmental Conference which drafted the Treaty of Lisbon