“In the name of joint credibility, we must be consistent between what we do and what we say”, where the rules of the Stability Pact would go against what the EU Commission advises on the fiscal position. For this reason "it is important that the member states respect what has been agreed on the achievement of structural equilibrium". This was underlined by the president of the Eurogroup Jeroen Dijsselbloem in a hearing before the economic affairs commission of the European Parliament, receiving in response a harsh attack by the Italian minister for economic development Carlo Calenda: "He takes a gigantic blunder".
Dijsselbloem expressed his reservations about the EU Commission's proposal aimed at giving greater room for maneuver to budgetary policies with a view to supporting growth: "We are not yet stable enough to let ourselves go into this type of fiscal trajectory". And he highlighted the risk of a possible "conflict" between the rules for staying in the Stability Pact and budgetary policy in the event that the latter is "expansionist".
"The real question" on the problem of the expansive fiscal position proposed by the EU Commission, and which for this reason makes it "a challenge", is how to reconcile the difference in situation between those countries that have fiscal space and the closed output gap, and those who, on the other hand, continue to lack income and have high unemployment. "The Commission has not provided us with an answer to this key question", which is why "the tax position is a very complex issue", he added.
"The Commission has mandated to make recommendations but they are not legally binding", he added, reiterating that "there is not just one finance minister in the eurozone, but there are 19", in response to the statement by the commissioner economic affairs Pierre Moscovici who, in presenting the recommendations on the budgets, instead presented himself as such.
“The Commission can make recommendations”, but then these are discussed in a “Eurogroup debate”. And this "is what will happen" at the next meeting on 5 December, where the proposal for an expansionary fiscal position will also be discussed.
The president of the Eurogroup then underlined that the eurozone is benefiting from the "fourth consecutive year of widespread growth, but we cannot be complacent" as "unemployment is still very high in some parts" and, above all, economic forecasts are of "high uncertainty". For this reason "we must be sure that the recovery supports itself", focusing on the "continuation of the reform agenda" but also on "investments" and "making sure that growth becomes more inclusive".
And on Brexit he recalled that "we must take a firm position, there is no alternative on this", warning that there will be an "economic impact" and that it will be "a difficult path, especially for Great Britain". For this "we must be fully prepared to avoid damaging our economy and the British one", he stressed, explaining that if at the moment the impact seems limited, we will have to see in a couple of years, as the effects of investor uncertainty, and therefore the lack of investments will begin to make itself felt in some time.
The reply of the Italian minister for economic development Carlo Calenda was very harsh, attacking him on the no to the easing of budgetary policies: “Dijsselbloem he's taking a giant blunder, which it does quite regularly. It does not understand that the issue is not budgetary constraints, but the fact that Europe is in the midst of extremely difficult challenges, the first of which is a very clear disaffection of the citizens and needs to make a major investment plan to transform it and it is a new deal at European level”.
