Greece moving forward
Economic measures are helping stability
New Europe spoke with the Greek Deputy Foreign Minister Kourkoulas on topical economic and budgetary questions as well as the Eurozone, see discussions below.
What is the significance of the Multiannual Financial Framework (MFF) 2014-20 for Europe
Greece considers the next MFF as a crucial crash-test for the EU. What is at stake here is nothing less than the credibility of the Union andthe future direction of the EU integration project as a whole.
To tackle this challenge the EU needs to foster the right conditions for the transition to a new growth model by utilizing the MFF as a tool for strengthening social cohesion while simultaneously promoting investment in high return sectors and supporting appropriate structural changes in member states.
There are disagreements about the overall size of the EU budget. What is the Greek point of view?
In a time of crisis our response should involve more not less Europe. It is necessary to retain the size of the EU budget as proposed by the Commission, so as to halt the EU moving from a crisis to a full blown recession. One should keep in mind that this is not a national budget. This is not just about operational expenditures but rather a flexible multi-level investment instrument which could have multiplying positive effects spread through 2020 and beyond. To reduce it, in a time of crisis, would be counter-productive.
Furthermore, one should not forget that in accordance with the Lisbon Treaty new policies (e.g. migration) have been added to the EU mandate. To implement them adequately one needs to have access to the necessary instruments. Having said that, Greece strongly supports measures towards “better spending” goals. We consider this to be a necessary condition for the achievement of credible EU spending and, hence, credible EU policies.
What could be the role of MFF in overcoming the Greek crisis
The Greek economy has undergone through an unprecedented fiscal adjustment in the course of the last two years. This is a testament to the efforts of the Greek people and the spirit of solidarity demonstrated by the governments and people of Europe. To cut this effort short, by sharply reducing the size of the MFF will ultimately prove detrimental to our collective sacrifices.
We are confronted by a crisis which cannot be contained in specific countries. Therefore, there is an urgent need to do everything we can and use every available instrument in our disposal to address it. For this purpose we need to remember that not all Euros are the same. A single Euro spend through the MFF in cohesion or innovation policies could have a much greater impact compared with the equivalent amount spend through a national budget.
Within the MFF what are the priority areas for Greece?
Obviously Cohesion Policy is of crucial importance. We are confronted by a contradictory condition in the sense that the cohesion allocation calculations take into account data from 2008-10 which paint a misleading picture.
For instance, Greek GDP has shrank 14,3% since 2009. We need to become aware that the macroeconomic picture has changed compared to the past when annual changes were marginal. Therefore, it is vital that the allocation of regional funding reflects the actual economic situation in regions and member states. This will allow Greece to combine its development effort with the requirements of the adjustment program.
In addition to that, we need to address the issue of sufficient funding for Migration Policy. Greece is at the forefront of migration flows into the EU and we must ensure that our response is adequately funded in order to be proportionate to the challenge we face.
Last but not least, we consider of crucial importance the reform of the current Own Resources arrangement. Europe needs to be able to stand on its own feet in accordance with the expenditures matched by revenues principle. To this end, we support the introduction o f a Financial Transactions Tax and a pan-European VAT. This will lead progressively to the elimination of rebates and other correction mechanisms.
How do you see the prospects for the Eurozone ?
It was clear from the start that the bare-bones EMU described by Maastricht would need to be bolstered up at some point. Asymmetries among members, the potentially destabilizing character of a one-size-fits all monetary policy were explicitly mentioned and understood back in the late 1990s.
However, what we are facing currently is a growing convertibility risk in debtor countries translated into high interest rate premiums in conjunction with a significant risk of a feedback loop between banks and sovereigns. The appropriate response should combine short term measures to contain the crisis, as well as a long term reforms to correct system deficiencies. These could start with a Banking union coupled with robust institutional provisions ensuring the credibility of the new arrangement, followed by a financial and an economic union. Moreover, the new institutions need to have the necessary inbuilt flexibility to adapt to situations we cannot currently envision. new europe on line
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