A great deal of money is being spent to deal with the coronavirus crisis. Besides the aid programmes in the individual member states, there is the COVID recovery fund Next Generation EU, which is to be allocated EUR 750 billion. At the same time the European Central Bank (ECB) is establishing a multibillion bond-purchasing programme. An expansive fiscal policy and an expansive monetary policy: can they work together in the long term? That is one of the questions that will be discussed in the first part of the Interparliamentary Conference on Stability, Economic Coordination and Governance in the EU (IPC SECG) on Monday, 12 October 2020. Besides a member of the ECB Executive Board, Dr Isabel Schnabel, Federal Finance Minister Olaf Scholz will also deliver a keynote statement at the session, the theme of which is “New partnership: will monetary policy now receive the requested fiscal support?”. From 10.30 a.m., the video conference will be streamed live at www.parleu2020.de.
Head of delegation André Berghegger highlights the special responsibility of parliaments
The SECG Conference was convened by Dr André Berghegger, head of the German delegation. Dr Berghegger, from the CDU/CSU parliamentary group, emphasised in the run-up to the event that the need to deal with the coronavirus pandemic confronted the European Union and its member states with “fundamental challenges” in the fields of monetary and fiscal policy. In addition, he said, the green and digital transformation of national economies also required joint action as decarbonising the economy and introducing new technologies would “entail profound changes”.
In the view of the German head of delegation, this placed a particular onus of responsibility on members of national parliaments and of the European Parliament. “Only if we act together can we bring the present crisis under control and find pathways to sustainable economic development and social cohesion in all member states of the Union”, he emphasised.
Seeking ways back to budgetary consolidation
Against this backdrop, Dr Berghegger expressed the hope that the 15th SECG Conference would serve as a forum for interparliamentary discussion of the priorities that should be adopted for the European recovery process, of the role of the European Central Bank in the interplay between fiscal and monetary policy and of ways in which the European fiscal rules could be made sustainable. The Members of Parliament, he said, would also have to reach agreement on the route map for a return to budgetary consolidation and, in the long term, to sound finances, because “only with sound finances will member states have the freedom of action they require to deal with future challenges”. Accordingly, said Dr Berghegger, the question of suitable stability mechanisms should also be addressed. “In my view,” he stressed, “the Recovery and Resilience Facility is inextricably linked with the Next Generation EU recovery plan and the next multiannual financial framework.
Are the Maastricht rules still appropriate?
The subject of political supervision of the European fiscal rules, as enshrined in the Maastricht Treaty, will be the focal point of the second session, which begins at 12.45 p.m. Even long before the outbreak of the COVID crisis, the rules, which are really meant to be the cornerstones of monetary union and to contribute to sound public finances in the eurozone countries, were diluted and relaxed. Whether adherence to the European fiscal rules is still part of customary practice, whether the rules are in tune with present-day requirements and how a return to the surveillance framework could be achieved are questions that will feature in the discussion. Introductory statements will be delivered by Paolo Gentiloni, European Commissioner for the Economy, and Klaus Regling, Managing Director of the European Stability Mechanism (ESM).
Strategic issues in the new multiannual financial framework
Which strategic issues are addressed by the multiannual financial framework and which are not will be discussed by the Members of Parliament in the third session, beginning at 2.45 p.m., as will the question how the plentiful resources of the Next Generation EU fund can be purposefully deployed within a short time. There will be keynote statements by Federal Economics Minister Peter Altmaier (CDU) and Valdis Dombrovskis, Executive Vice-President of the European Commission for An Economy that Works for People. While the executive had to step into the breach at the start of the crisis, Members of Parliament now intend to monitor closely the implementation of programmes such as Next Generation EU. (hau/7 October 2020)