Opinion on the European Commission Reflection Paper on Deepening the EMU

Executive summary

• For CEEP the reflection paper on the future of the EMU should help start considering the Euro zone as a whole and not just as the sum of its individual components. CEEP always considered public investment in key physical and social infrastructures as the main lever to foster growth for the benefit of citizens and enterprises in Europe.
• CEEP calls for greater involvement of social partners in the design and monitoring of reforms, whilst ensuring that sufficient support is provided for capacity-building activities for social partners engaged in reform programmes.
• The preparation of the new EU multiannual financial framework, stronger support to reforms and greater links to euro area are clearly identified by CEEP as the main priorities. We advocate the establishment of a self-supporting structural reform support programme under the future Multiannual Financial Framework (MFF).
• CEEP believes that a macroeconomic stabilisation function at euro area level could potentially complement automatic stabilisers at national level under certain conditions. It should take the form of automatic stabilisation and not aim at fiscal fine-tuning of the economic cycle. The stabilisation function would therefore not be a tool to actively steer the euro area fiscal stance, but rather reduce the need for euro area countries to address large country-specific shocks by using discretionary policies.
• CEEP members could see added value in further elaborating a European treasury, particularly to ensure minimum levels of public investments across Europe. However, CEEP expresses strong doubts on whether the EU would be politically ready to move so strongly toward federalization by 2025. This roadmap seems unrealistic in the present state of the Union.
• CEEP would be in favour of nominating a special Commissioner for EMU governance or a European finance Minister which would be entrusted with drawing up the macroeconomic policy of the EU while mediating with the EU institutions.