Verhofstadt tables alternative ‘competitiveness pact’

Verhofstadt.jpg

Guy Verhofstadt, leader of the liberal group in the European Parliament, has tabled a proposal for economic convergence in the EU. He said his was more wide-ranging than the recent Merkel-Sarkozy plan and would put the European Commission, not EU member states, in the driving seat.

The paper, presented by Verhofstadt to the Brussels press in the European Parliament yesterday (3 March), is entitled 'Community Act for economic convergence and governance'.

Unlike the Merkel-Sarkozy proposal, which was limited to six specific measures (see 'Background'), Verhofstadt's plans are more wide-ranging, the former Belgian prime minister explained.

The philosophy of the Merkel-Sarkozy plan is to top up existing EU economic strategies – like 'Europe 2020', or the recently agreed 'European Semester' – with the six-points proposed, Verhofstadt explained.

But instead, all these economic governance policies should be integrated into one, he argued.

More importantly, Verhofstadt said the Merkel-Sarkozy plan was based on the intergovernmental method, while his proposal was based on the Community method, putting the European Commission, not member states, in the driving seat.

Putting EU countries themselves in the driving seat will lead only to failure, Verhofstadt argued, citing the example of 2000's Lisbon Agenda for growth and jobs, which was not supervised by the Commission and did not compel member countries to actually implement it.

The EU executive should monitor European economic convergence and governance, Verhofstadt said, imposing corrective action or even sanctions on countries that fail to comply with it.

Among possible sanctions, he said countries could lose financing under various programmes.

Verhofstadt also called for the structure of the European Commission to be revamped, with a "clustering of competences" and a commissioner for economic affairs (currently Olli Rehn) in charge of all the other commissioners with economic competences (currently Michel Barnier [Internal Market], Joaquín Almunia [ Competition], Antonio Tajani [Industry], Karel de Gucht [Trade], Janusz Lewandowski [Budget] and Algirdas Šemeta [Taxation]).

Asked by EURACTIV if he had "compared notes" with Commission President José Manuel Barroso and European Council President Herman Van Rompuy, who have put together their own response to the Merkel-Sarkozy pact, Verhofstadt said he had only just sent them his paper, which was adopted by the ALDE group the previous day.

Parliament sources told EURACTIV that the Verhofstadt paper would have a great chance of playing a role in defining future EU economic policy, provided that the centre-right European People's Party group and the centre-left Socialists & Democrats group also align with it.

 

At the last EU summit, German Chancellor Angela Merkel and France’s President Nicolas Sarkozy tabled a six-point Competitiveness Pact aimed at harmonising tax and labour policies in the euro zone, saying the crisis had exposed the necessity to complete monetary union with an economic union.

Weeks later, European Commission President José Manuel Barroso and his counterpart at the European Council, Herman Van Rompuy, distributed a paper outlining new competitiveness targets.

The Van Rompuy-Barroso pact is being kept under lock and key but sources indicate that it is substantially more flexible than the the Merkel-Sarkozy plan.

On 11 March eurozone leaders will discuss the competitiveness targets ahead of a 24-25 March EU summit aimed at agreeing on the package and on a permanent eurozone bailout fund.

  • 11 March: Eurozone leaders to discuss competitiveness targets.
  • 24-25 March: EU summit aimed at agreeing on competitiveness package and on a permanent eurozone bailout fund.

Subscribe to our newsletters

Subscribe

Want to know what's going on in the EU Capitals daily? Subscribe now to our new 9am newsletter.