IEP Lunch Debate with Dr. Nikolaus Meyer-Landrut: “On the path to a stronger Europe in regards to growth and stability- Positions and Perspectives from the View of the Federal Government”
Dr. Nikolaus Meyer-Landrut, Head of Department 5 (European Policy) of the Federal Chancellery, gave an address “On the path to a stronger Europe in regards to growth and stability- Positions and Perspectives from the View of the Federal Government” in the Representation of The European Commission in Berlin on 2 July 2013. Prof. Dr. Mathias Jopp, director of the Institut für Europäische Politik, moderated the event.
The lecture from Dr. Nikolaus Meyer-Landrut took place a few days after the European Council meeting in June 2013 and was held partly in light of the upcoming meeting of the EU labor and social ministers as well as the heads of state and government, which dealt with the fight against youth unemployment in Europe.
Dr. Meyer-Landrut referred to the bank restructuring directive agreed by the ECOFIN Council in June, which established clear rules for a bank settlement procedure. This procedure is also tightly linked to the decisions on bank recapitalization. A further important step to cope with the economic and financial crisis is the agreement on the Multiannual Financial Framework 2014–2020, which establishes the framework for the future structural funds from 2014. However, further reforms in the eurozone member states are inevitable. This is a lesson that can be drawn from the Asian financial crisis of the 1990’s, in which all of the affected states had to – sooner or later – go through the same adjustment process. Those states that faced the challenge of adjustment early on achieved the best results.
Regarding the question of sanctions for member states that are contractually obligated to implement economic reforms, Dr. Meyer-Landrut noted that it is difficult for the European Commission to supervise the adherence of these agreements, since the Commission is a party to the contract itself and thus potentially faces a conflict of interests. Particularly at an early stage, reforms should be stronger accompanied by already existing procedures and mechanisms. In order to prevent the deviation of individual member states from its reform programs, a wide spectrum of measures is conceivable, in which incentives rather than sanctions should play an important role.
Dr. Meyer-Landrut also briefly turned to the topic of youth unemployment in Europe, which was already strongly pronounced in currently particularly affected countries such as Greece, Italy, Spain and France before the current economic and financial crisis. He emphasized that the EU member states are the central actors in the fight against youth unemployment, since labor market policy falls into their area of competence. European institutions and money can only have a supporting effect.
The European contribution to the fight against youth unemployment is the implementation of a 6 billion Euro program through the European Social Fund. However, this is not an additional program; the funds are part of the Multiannual Financial Framework (MFR) and are consequently at the expense of other areas. Furthermore, funds from the Social Fund of the previous MFR that were fed back into the national budgets will be used to support small and medium-sized enterprises.
An indirect measure to make the European economy more dynamic is the deepening of the single market. The modernization of the EU Directive on the Recognition of Professional Qualifications is an important step towards more mobility in the European labor market. Finally, a future Transatlantic Trade and Investment Partnership between the EU and the USA promises to become a strong growth engine.
Dr. Meyer-Landrut did not entirely rule out the idea of a treaty revision in order to develop economic policy at European level. However, before a decision in this regard, it is necessary to discuss which measures can be taken to stabilize the Economic and Monetary Union (EMU). A revision of the entire contract, as demanded by some states, is not necessary; selective contract amendments are sufficient.
Finally, Dr. Meyer-Landrut noted that some decisions of the European Council on the development of the EMU are overly optimistic and create excessive expectations. The establishment of a European bank supervisory authority is a good example. While the European Council announced the implementation of the supervision for January 2014, the European Central Bank stated that it will take until approximately one year after the agreement on banking supervision for oversight responsibilities to begin. First, the European Parliament must agree to the banking supervision, and second, practical steps such as the employment of further personnel (approx. 1,000 new employees) must be taken.
According to Dr. Meyer-Landrut, the future of the EMU lies in reinforced economic policy coordination among the member states. In this respect, the German-French paper from May 2013 on the occasion of the 25th anniversary of the German-French Economic Council has made a series of recommendations that both countries want to bring into future deliberations of the heads of state and government.
By Jéronimo Barbin