Wednesday

20th Feb 2019

Moscovici to answer in writing on commitment to fiscal rules

  • MEPs still doubt Moscovici's commitment to the EU will trump his allegiance to France (Photo: consilium.europa.eu)

France's Pierre Moscovici is to answer in writing about how he will make sure countries, including his own, will implement the EU's deficit-and-debt rules.

MEPs in the economics committee were working on nine supplementary questions on Friday (3 October), after a stormy hearing with Moscovici the previous day.

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The draft questions, seen by EUobserver, revolve around his commitment to the Stability and Growth Pact which sets a three-percent threshold for the public deficit and a 60 percent of GDP limit on public debt. Most EU countries are well beyond both thresholds.

But France is of particular concern, as it has asked for extension after extension to meet the deficit target, the latest being just on the eve of Moscovici's hearing.

As they did in the hearing, MEPs press Moscovici again on his perceived failure to comply with these rules during his time as a finance minister in France in the past two years.

With France constantly pushing for "flexibility" in applying the Stability and Growth Pact when a country is in distress, MEPs ask him to "clarify the concept of flexibility in the Stability and Growth Pact and its different forms of possible application."

They also want to know his interpretation of what "exceptional circumstances" and "severe economic downturn" mean when applying this flexibility.

They refer to France, indirectly, and its poor track record in sticking to deadlines.

"What action should apply to member states whose budget deficit is constantly above 3% of GDP and which have already been granted an extension of the deadline to bringing down the deficit to Maastricht levels? Under which circumstances would you argue for granting more time or for applying sanctions?"

Italy, at a whopping 132 percent of GDP in public debt, is also alluded to.

"What action will you apply to a member state whose public debt is constantly above 60% of GDP and increasing? Under what circumstances would you not recommend to apply sanctions?"

Meanwhile, MEPs want to know how Moscovici will make governments implement the commission's economic policy recommendations, given that most of them are ignored even though they are legally binding.

"How do you think your concrete professional experience can help in changing this trend? What concrete measures will you undertake to increase the implementation rate of country specific recommendations by member states?"

After having stated that some of the rules for economic policy co-ordination, known as "six-pack need" simplification, Moscovici is asked to say exactly which rules he meant and how he plans to change them.

"Could you put such a legislative initiative to the college [of commissioners] or would you need approval or a positive recommendation by the vice-president in charge of the Euro and Social Dialogue [Valdis Dombrovskis]?"

MEPs also want to know about plans for the eurozone to have a "single external representation" in international bodies, as mentioned in the EU treaty, and what contingencies there are in case the eurzone slips into deflation.

Lastly, they ask Moscovici what his "concrete actions" will be in support of the all-but-dead financial transaction tax and what he plans to do in order to implement a common corporate tax base throughout the EU.

The common tax base is designed to limit tax dumping of the sort Apple is doing in Ireland.

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