Eight social democrat leaders including Sigmar Gabriel from Germany, Denmark’s Helle Thorning-Schmidt and Italy’s Matteo Renzi said today (30 August) in Paris that they want to add economic policy to the agenda of the EU summit.
Socialist leaders met this morning in Paris, at the invitation of French President François Hollande. It is the second time that the centre-left has met in Paris instead of Brussels, where they used to be hosted by President of the Party of European Socialists Sergei Stanishev, ahead of a meeting of EU leaders.
The place was also chosen to “avoid the media brouhaha in Brussels”, said a source at the Elysée. The last time the “club”, including European Parliament President Martin Schulz, met was on 21 June.
Europe has to do ‘something’ about Ukraine
Ukraine was the first topic to be discussed.
Hollande advocated a strong position, arguing that harder sanctions should be taken against Russia. He spoke with Vladimir Putin on 29 August.
“There is a clear escalation of the situation in Ukraine. Some equipment is coming from Russia, some Russian soldiers probably are in Ukraine, and it is certain that separatists receive weapons from Russia. Now the civil population is in danger. So Europe has to do something,” the French president said.
Tougher sanctions against Russia
He said he was available to promote dialogue between Ukraine and Russia but that Russia should first show its willing to put an end to the conflict.
“Vladimir Putin is now going abroad for two weeks. Are we going to let the situation deteriorate in Ukraine? There is no time to lose,” Hollande said, before calling for tougher sanctions against Russia to be adopted at the EU summit.
The meeting also addressed the burning issue of EU top jobs. Social democrats agreed to back the candidacy of Italy’s Federica Mogherini for the job of High Representative for foreign affairs. “She is young but competent, she has handled all the major crisis Europe is facing as Italian foreign affairs minister,” said the French president.
The choice of the Council president appeared to be a more difficult issue.
Leaders want economic commissioner
“We need a consensus approach and not a partisan approach for the post of Council president, the future of Europe is not a trade on the basis of parties, we need a consensus but some personalities are eligible for this position from the social democrat ranks,” Hollande said.
Danish Prime Minister Helle Thorning-Schmidt who was for some time seen as a realistic option is now an outsider, because Germany is leaning towards giving the post to Poland’s Prime Minister Donald Tusk.
Hollande added that the leaders would remind Commission President-elect Jean-Claude Juncker of his promise to nominate a social democrat or socialist as economic and monetary affairs commissioner.
France is trying hard to get the job for its candidate Pierre Moscovici, even though his performance in the French government has been widely criticised in Europe.
Europe’s economic woes appeared to be the biggest concern at the Paris meeting. According to the leaders, there are three things to do, and fast. The first is for the EU to change its monetary policy. “The speech of [European Central Bank chief] Mario Draghi is clear […] there is a real risk of deflation and that requires a global response,” a source from the Elysée told EURACTIV France.
Boosting demand is crucial for social democrats, who disagree on the issue with right-wing politicians. They favour increasing competitiveness, but for Paris and its allies, domestic demand has to be increased first.
Investment plan should be ‘quick’
To support this, social democrats said an ambitious investment policy was needed, and it has to be implemented “very fast”.
“We agree with Jean-Claude Juncker about the investment plan, but we ask him to start to move very fast on this,” Hollande told journalists after the meeting.
The ECB should soon consider implementing measures to facilitate access to credit for businesses, in the form of ABS, a form of securitization of credit that spreads investment risks.
The group also believes that investment in the EU today is lower than before the 2008 financial crisis. Juncker has proposed €300 billion to boost investment, which the social democrats want implemented urgently.
Finally, the issue of adapting the EU’s fiscal framework has raised concerns. “You have to adapt to a unique location with a fiscal policy that fits the rhythms of other indicators” said the Elysée.
Meeting in Rome on 6 October
Renzi, whose country currently holds the rotating EU presidency, proposed holding an EU summit dedicated to growth and employment in Rome next October. All the other leaders agreed, and Hollande added that “a meeting of eurozone should take place afterwards to decide what to do concretely”.