"Status quo is not an
option: beware that the danger of pro-cyclical policies is still very
real", rapporteur Elio Di Rupo says ahead of meeting of ministers for economic
and financial affairs.
Cities and regions representatives have called for European fiscal rules to be more effective and have greater democratic legitimacy. Members of the commission for economic policy on 7 June voiced support for the more country-specific approach of the recent European Commission proposal but insisted that the involvement of local and regional authorities in the definition of the new national mid-term fiscal plans must be mandatory. The adoption by the CoR commission comes just one week before national ministers assess the proposed reform of the economic governance framework at the Economic and Financial Affairs Council.
The European Commission estimates that €650 billion are needed in public and private investments per year over the next decade to achieve the EU's commitments on digital and green transitions. However, since the eurozone crisis, the European Union has suffered a sharp decline in public investment for which – according to local and regional leaders – the European economic governance framework is partly responsible. "We must avoid repeating this scenario in the wake of the COVID-19 crisis and Russia's invasion of Ukraine", states the draft opinion adopted on 7 June by the economic policy (ECON) commission of the European Committee of the Regions (CoR).
The draft opinion supports the more country-specific approach proposed by the European Commission but requests that the new national medium-term fiscal-structural plans come with a legal obligation to set up, before the plans are developed, a structured cooperation mechanism with the local and regional authorities and stakeholders concerned. The opinion will be voted upon at the Plenary session of the CoR in October.
The rapporteur, Elio Di Rupo (BE/PES), Minister-President of the Wallonia Region, said: "The status quo is not an option. Reform of the EU's economic governance is inevitable given the impact of the COVID-19 pandemic and the war in Ukraine. There is a need for investments into the green and digital transitions of €650 billion per year over the next decade and almost €200 billion per year for social infrastructure. To strengthen public investment, the very least would be to exempt all expenditure incurred by Member States and local and regional authorities as part of Cohesion funds co-financing and Union programmes from fiscal surveillance."
A recording of the debate and the vote on the opinion in the ECON meeting will be available here at the end of the meeting.
In the past three years, the CoR has adopted two opinions on the European governance review, both drafted by Elio Di Rupo, a former prime minister of Belgium. Press releases on the two adoptions can be found here (2020) and here (2022).
Tel. +32 (0) 470 89 53 82