The European budget needs to be reformed, and in the light of the continuing economic and financial crisis this need becomes ever more pressing.
The MFF must ensure that the Union has a sufficient budget to enable real policies to ensure a return to economic growth, jobs and prosperity for its citizens.
The MFF needs to be funded, at least in part, by Union own resources, thus reducing the pressure on reduced national budgets and allowing economies of scale at the European level to bring benefits to its citizens. This system of own resources need to start as of 2014.
The return of unspent commitments by Member States is an absolute waste of resources, thus the budget needs to be flexible, both between different pillars and different years, in order to guarantee a maximum impact for European policies.
It is a question of democratic accountability that the next European Parliament has a say on the budget during its term, therefore a mid-term review in 2016 is essential.
The Greek crisis has prompted the EU to take actions such as the setting-up the Troïka, but it lacks democratic accountability. The key question which needs to be resolved as soon as possible is who decides and with which tools for all issues relating to European government.
- The Troïka should be changed into a system where the Commission is accountable in front of the EP, and ultimately European tools are sufficient to manage all lending; the creation of a European Monetary Fund should be envisaged to accompany the ESM and future Resolution Fund.
- The Cypriot crisis has highlighted the need for transparency: irresponsible decisions (such as breaching the 100.000 Euros insured deposit guarantee) were taken and no one was held responsible for them. The Eurogroup must be accountable in front of the EP and its chairmanship must be a full time responsibility.
- The Commission needs to immediately establish the Expert Group to continue reflecting further on the mutualisation of debt, in order to lower the interest rates, to take advantage of a liquid market and relieve the ECB.
- Smart implementation of the new economic governance framework (6-pack, 2-pack): it is important to ensure growth friendly consolidation (with the postponement of the fiscal target, if required) provided that reforms are on track.
- The Fiscal Compact must be integrated into the Community framework;
- New tools must be designed such as a convergence code and an incentive-based enforcement mechanism, which could provide financial help for reforms that do bear social short term costs.
- The evolutions of the Euro area (the opt - ins and -outs which are no longer transitory) must be formalized and appropriate accountability by MEPs from the Euro area and from MS aiming to join must be ensured.
- It is important to change the current communication coming from the Union: the European project is a positive one and has many advantages for citizens; these elements need to be focused on and communicated rather than taken for granted. The Members of the European Council publish their conclusions after each summit: they are bound by these conclusions and are committed to implement them; therefore it must done. It is a question of credibility in the eyes of our global partners.
- The banking union with the creation of a single resolution authority must be completed as soon as possible. This banking union must be European and funded by Europe’s banks relative to the risk which they present. Progressively, a single deposit guarantee scheme for the Euro area is also required and to provide for the direct recapitalisation of banks through a resolution fund (in the meantime provided for by the ESM).
- A supranational Deposit Guarantee Scheme is needed above any national programmes.
- A fragmentation of the internal market, where banks of a particular MS would only buy obligations of that MS, must be avoided.
- The new rules regarding capital and liquidity requirements must be implemented, which will make the lending smarter (with the differentiation of capital requirement according to the risk taken and the contribution to the real economy). It is essential to guarantee that the real economy is financed and that interest rates are affordable for SMEs.
- It is fundamental to increase the funding of the real economy coming from markets. Indeed, bank loans will be less available given the new rules.
- Some form of separation, between the essential banking activities, such as the financing of the real economy, and the riskier banking activities, such as pure investment, must be designed to ensure sufficient stability;
- Tools to gain access to "sleeping" savings must be ensured by providing products for citizens which are long-term oriented and with an insured, moderate but attractive interest rate. These savings could be used for the direct funding of specific and targeted projects of common interest.
- SMEs are not equal concerning interest rates; these are subject to their location. Similar SMEs with similar risks must benefit from similar interest rates irrespective of their location. It is the duty of the ECB and the Commission to tackle the unjustified differences of interest rates.