Members of the European Parliament are set to endorse a raft of measures which they hope would enable the European Union to recover more quickly and strongly from the negative impacts of the global financial crisis, while ensuring greater financial and economic stability in the future.
The proposals to be debated by the Parliament next week (20 October) include the idea of appointing a 'Mr. or Ms. Euro', who would be in charge of coordinating the bloc's economic policies. This person would take over the responsibilities that are currently shared by three people.
A triple-hatted position
First, he or she would be a vice-president of the European Commission, in charge of economic and monetary affairs. Currently this job is being done by the Finnish commissioner, Olli Rehn, who is not a vice-president of the Commission.
Second, 'Mr. or Ms. Euro' would preside over meetings of the EU Council of Ministers for economic and financial affairs – known as ECOFIN – which until now has always been chaired by the finance minister of the country holding the rotating presidency of the EU Council.
Third, he or she would also chair the regular meetings of finance ministers from countries using the euro – commonly called the Eurogroup – which has been chaired since 2005 by Jean-Claude Juncker, the prime minister of Luxembourg.
Another EU face on the international scene
Furthermore, the appointed person would take part in the regular gatherings of EU leaders – known as EU summits or European Council meetings. She or he would also represent the EU in various international bodies dealing with financial and economic issues.
The proposal for a 'Mr or Ms. Euro' is inspired by the institutional innovation that was included in the Lisbon Treaty: having a High Representative for Foreign Affairs and Security Policy who wears two hats at the same time.
Appointed to this job at the end of 2009, Catherine Ashton is a vice-president of the European Commission and she is also president of the Foreign Affairs Council – chairing the regular meetings of foreign ministers from the 27 member states.
The idea of applying the same approach to the area of financial policy emerged during discussions among members of the European Parliament's special committee on the financial, economic and social crisis.
This special committee was created in October 2009, and has worked during the past 12 months to prepare a series of recommendations for measures and initiatives that should be taken to support sustainable economic recovery and long-term financial stability in the European Union.
The special committee's recommendations are set out in a report that was drafted by French Socialist MEP Pervenche Berès.
The report was broadly supported by members of the special committee from the different political groups, with 33 out of 38 members voting to endorse it at their last meeting on 29 September. The report is expected to be formally endorsed by the Parliament following a debate in Strasbourg on 20 October.
However, even if a majority of MEPs are ready to support the idea of appointing a 'Mr. or Ms. Euro', such a major step could not be taken quickly. It would require changes to the EU Treaty, which means that all 27 member states would have to agree on the text and complete the necessary ratification procedures.
Berès recognises the practical and political difficulties, but still she believes that the Parliament has a responsibility to propose innovative solutions, even if the member states are not yet ready to adopt them.
She believes that the idea of a 'Mr. or Ms. Euro' would bring significant benefits in terms of better coordination of economic policies across the Union. In particular she says it would oblige the finance ministers on the ECOFIN Council to pay more attention to the general European interest – and not just to their respective national interests.
A tax on financial transactions?
One of the other proposals in the report is the introduction of a tax on financial transactions (FTT).
The special committee believes that such a tax would improve the functioning of the market by reducing speculation, and the money raised could be used "to finance global public goods and reduce public deficits".
The text presented to the Parliament states that a FTT "ought to be as broadly based as possible," but that if an international agreement cannot be found then the tax should be introduced among the EU member states "as a first step".
The Commission is asked to produce a feasibility study "taking into account the global level playing field" and then "to come forward with concrete legislative proposals".
The proposal for a European FTT is especially controversial, and it is expected that some MEPs from the liberal and centre-right groups will try to water-down this proposal when the text is adopted in Strasbourg.
However, Berès strongly defends the idea, pointing out that a tax of 0.05% on all financial transactions could raise as much as €200 billion per year.
Such an amount would easily cover the whole of the EU budget, and so the Union would no longer have to rely on payments from the national budgets of the member states.