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The reform of the Economic and Monetary Union should enable local and regional authorities to invest in Europe's future  
The European Committee of the Regions (CoR), the EU's assembly of local and regional authorities, adopted its position on the deepening of the European Monetary union (EMU) on 30 November, following a debate with the European Commissioner for Economic and Financial Affairs, Pierre Moscovici. Stabilisation, convergence, resilience in managing shocks and flexibility in fiscal rules were priorities set by EU local and regional representatives as a way to relaunch investment and support the delivery of quality public services.

The future of the EMU will have a direct impact on local and regional authorities' investment capacity and subsequent ability to deliver public services. This is why the CoR, in an opinion led by Christophe Rouillon (FR/PES), Vice-President of the Association of French Mayors and Mayor of Coulaines, calls for shoring up the Eurozone's resilience by ensuring it is sufficiently financed.

Speaking during the debate in Brussels, the Committee's President, Karl-Heinz Lambertz, remarked, "The story of the Economic and Monetary Union cannot be a story of austerity. It must boost convergence upwards, reduce economic and social disparities in the Eurozone, strengthen social rights and help our local economies grow. This is why EU regions and cities support Commissioner Moscovici's work to give Euro countries new stabilisation and investment tools, supported by a sufficient budget. If local and regional governments are to provide quality public services and citizens are to feel the added value of the EU, we need to boost their capacity to deliver ".

Discussing with EU local leaders the building blocks of the reform proposals on the future EMU, to be presented on 6 December, Commissioner Moscovici said, " The euro area is now enjoying strong growth, but it still suffers from persistent economic and social divergences. These are unsustainable and risk fuelling political divisions. Our goal is not to build a transfer union, but a convergence union – one which more effectively marries responsibility and solidarity, risk sharing and risk reduction. I am convinced that these are two sides of the same coin ".

The Committee backs the transformation of the current European Stabilisation Mechanism (ESM) into a proper fund with sufficient resources to support member states hit by shocks and crisis. But regions and cities insist the new fund must accelerate convergence and complement EU cohesion policy to boost local and regional investment. In this perspective, the Stability and Growth Pact should be more flexible to allow the relaunching of investment at all levels. Local and regional authorities' investment should not be counted in the structural deficit for medium term objective (MTO) whilst national and regional co-financing of EU structural and investment funds should be excluded when calculating structural expenditure.

The future EMU, then, should not trigger the centralisation of EU investment: " We have to make sure convergence is not confined to national macro-economic interpretations and is compatible with the vision of cohesion promoted by regional policy funds. In other words: a euro area budget should not be funded by cutting resources for cohesion policy ", argued the rapporteur, adding that: " Local and regional authorities share citizens' call for reforms aimed at increasing democracy and transparency of EU's economic and monetary policy. For this reason the EMU needs a genuine system of democratic governance, with the European Parliament playing a more prominent role ".

The opinion adopted today represents EU regions' and cities' contribution to the strategic elaboration started by the European Commission's reflection paper on the deepening of the EMU, presented last May.


Pierluigi Boda

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