The key condition of recovery and competitiveness is economic coordination at EU level

2021. 03. 11.

The European Parliament has voted in favor of the report on the European Semester concerning the economic policy coordination within the EU. Fidesz MEP Enikő Győri, who had been in charge of the dossier in the Economic and Monetary Affairs Committee, stated : ”The COVID-19 pandemic plunged the world into deep recession. We now need a strong, coordinated and innovative European response to this situation, and a key element of this response is the Recovery and Resilience Facility which provides the Member States with investment funds up to 672,5 billion EUR. The European Semester mechanism represents from now on an important contribution to the control of the implementation of the RRF. Nevertheless, we have to keep the original focus of the European Semester, and its key role as a European framework for economic policy coordination. It is a great success for us that the report does not prescribe or define any conditions of ideological nature that would go beyond what is strictly required by law, and it fully recognizes the role of national actors, including national parliaments. Also, the EP finally acknowledges the importance of the principles of proportionality and subsidiarity”.

In her plenary speech, MEP Enikő Győri pointed out: ”For more than two years, the European Parliament has been unable to reach an agreement on the European Semester, the EU’s main economic policy coordination tool, which is a serious proof of inaptitude in the current severe crisis. As the MEP in charge of the dossier on behalf of the  Economic and Monetary Affairs Committee, I have done my best to include all sound and reasonable proposals in the report, whether they came from the left or from the right”.

Since the pandemic has a devastating effect on the EU economy, and particularly on small and medium-sized enterprises, on the seamless functioning of the single market, and thus on competitiveness, the Hungarian MEP underlined: ”It is of utmost importance that the European Parliament declares that even in these extraordinary times, we shall not abandon the principle of sound public finances, but will rather only use the flexible rules as long as it is really necessary and indispensable. In order to create new jobs and boost economic growth, we not only need public and private investment, but also structural reforms, since sustainability is not only an environmental issue but also an economic challenge. We need to strengthen our competitiveness and our single market because these are the indispensable guarantees that ensure the survival of our European social model”.

During the negotiations, MEP Győri took a successful stance on the requirement to acknowledge the fundamental role of national actors – including national parliaments – in the European Semester process because they have a clear responsibility both in the field of economic legislation and in the control of the responsible use of available funds.

With regards to the role of the European Commission, MEP Győri pointed out: ”Since the crisis hits Member states in 27 different ways, it is not possible for national governments to draft the Recovery and Resilience Plans using the same strategy. For this reason, the European Semester report also insists on the importance of a continuous dialogue with the Member States and the possibility to use tailor-made solutions”.

”Hungary will benefit from nearly 6000 billion EUR of RRF financing, which is a huge amount. Following difficult negotiations, we succeeded in preventing the new rule of law weapon being forced into the Semester process. Instead of this, the report refers to the general regime of rules that protects the EU budget, which is fully justified, since every eurocent financed by taxpayers’ contribution shall only be used in full conformity with the rules that are in force, and in an efficient way”, concluded MEP Győri.

Background:  The European Semester is the main economic policy coordination tool available at European level, which entered into force after the activities of the Hungarian Council Presidency of 2011. The main aim of the Semester consists in ensuring that Member States comply with the rules concerning sovereign debt and budget deficit that have been defined at EU level. According to the current economic consensus, it can be ensured that the level of public debt will not increase, and can even adopt a downward path if the level of budget deficit does not exceed 3% of GDP: enforcing this conditionality has so far been the basis of sound public finances, with the aim is to ensure financial stability. Given the exceptional circumstances of the COVID-19 crisis, EU decision-makers granted Member States a temporary exemption from respecting the Maastricht criteria until the end of the recession, but nevertheless, maintaining sound public finances in the medium-term still remains an important and necessary objective, as the report also states it, in order avoid that the next generations of European citizens were to be buried under the burden of ever growing debt. But the European left now denies that these restrictions would have to be maintained; they see no danger in increasing indebtedness, as the negotiations led during the elaboration of the report have revealed it.