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COMPLETING AND REBALANCING THE ECONOMIC AND MONETARY UNION
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destabilising deficits and surpluses among
Member States with equal force. Good macro-
economic policy should also include a proper
understanding and use of the area’s aggregate
fiscal stance, in order to ensure proper demand
management over economic cycles.
Economic cohesion, convergence and com-
petitiveness cannot be achieved without a
strong social dimension. The achievement of
social progress within and among Euro member
states through a well-organised process of
structural convergence must become a guiding
policy principle of the future EMU, including a
decisive reduction of inequalities. This will make
it more robust economically and politically.
Common social standards and a common con-
solidated corporate tax base to prevent a social
and a fiscal race-to-the-bottom between
Eurozone and EU countries are fundamental in
this respect. This must go hand-in-hand with
deeper social dialogue on Eurozone issues.
Such stronger and re-balanced economic
governance will need to be gradually built on a
comprehensive fiscal capacity, financed by own
resources and able to borrow, and on solid dem-
ocratic legitimacy and control at European and
at national levels. A new approach to debt man-
agement aiming at long-term sustainability
should become part of this new configuration.
Beyond this internal set of challenges, the
Eurozone also needs to address the overall glob-
al challenges, in order to manage its transition
to a new growth model and to build a sound
and stable international currency. As a currency
zone within European Union, EMU must play its
part in influencing global and geo-strategic bal-
ances, which requires a unified external repre-
sentation in the key international institutions
and fora.
While EMU reforms are necessary now, the
political context does not allow for a complete
and speedy implementation within the short
run across the whole range of necessary chang-
es. In certain areas, it is essential to formulate
and uphold a high level of ambition, while ac-
cepting to move ahead gradually. In this respect,
the possibilities provided by the existing Treaties
to act within a clear Community framework
should be exploited to the full, including a num-
ber of options to address needs of differentiated
integration at EMU level, while remaining open
to non-euro countries. Simplified and ordinary
treaty change procedures shall be put at the end
of the cycle of EMU reform.
The European Council must draw the full les-
sons from a crisis which is not yet resolved and
which even endangered the very survival of the
Eurozone, leaving a heavy economic, social and
political legacy behind it. The future of EMU
now requires a new sense of political vision and
commitment, which the forthcoming joint
Presidents’ report should inspire.