Yves-Thibault de Silguy, former Economics Commissioner, said it was a mark of the euro’s success in holding interest rates and inflation so low for so long that some people had – incorrectly – thought the business cycle had been abolished. As for the future, he wanted to see stronger coordination of national budgetary policies and active promotion of the euro as a reference currency.
National reforms the key to growth
Committee chair Pervenche Berès (PES, FR), who is co-rapporteur for Parliament’s forthcoming report on ten years of the Economic and Monetary Union which will draw on the evidence of this hearing, asked about the eurozone’s relatively slow growth rates, Mr Waigel said: “If growth has been modest, it is not the euro’s fault. It is because there has not been the political will for economic reform.”
For Xavier Musca (President of the Council’s Economic and Financial Committee and Director General of the French Treasury and Economic Policy Department), it was hard to see economic policies relating to the labour market, research and innovation being harmonised at EU level. “What we need is dialogue, monitoring, an alert role for the Commission and for the Eurogroup to incite ministers to work together.”
ECB Executive Board member Lorenzo Bini Smaghi argued that “clarity on who does what is of the utmost importance.” If there was divergence in growth rates between Member States, you needed to ask who was responsible: “Member States are in charge of education, product and labour market regulation, taxation, research and development... you should look there for the reasons for the differences.”
More joint representation on the international stage?
Financial Times columnist Wolfgang Munchau said, “We need to talk more about the global responsibility and the role of the euro.” He pointed out that uniting eurozone representation at the IMF would give Europe a stronger voice and leave room for more representation for others. With a global currency, “we will play a political role in helping the international order – and defending our own interests cannot be done just at national level.”
Mr Bini Smaghi made a similar point: was the EU ready to accept the consequences of being a player on the world economic stage, or did it want to opt out of having a say on global governance, he asked: “Will Member States accept the pooling of EU representation in international bodies, or will they insist on keep national seats around increasingly irrelevant tables?”
No change to euro entry criteria
The other co-rapporteur, Werner Langen (EPP-ED, DE), was one of several MEPs to raise the issue of the criteria for entry to the eurozone and whether they were still the right ones ten years on. The visitors were all in agreement that all Member States had signed up to the criteria and that sticking with them was essential. “We chose nominal criteria,” said Mr Munchau. “The alternative, assessing real convergence, would have been impossible to implement. Perhaps there were some mistakes, but the alternative would have been worse.
