[Lymec-PM] Reacting to current negotiations regarding the reform of the Stabilty and Growth Pact, the European Liberal Youth (LYMEC) calls on EU leaders to not jeopardize the Euro currency by agreeing only on mock tightening of the Stability and Growth Pact.
LYMEC President Alexander Plahr states: "The stability of the Euro currency is to a large extent based on the credibility of its regulations and safeguards. However, the sanctions envisaged in the Stability and Growth Pact for excessive overspending have not once been employed, despite massive violations of the pact by numerous member states. This non-employment is due to political meddling by the affected countries, big and small, in the ECOFIN council."
As a result of irresponsible budget policies and the subsequent sovereign debt crisis, the European Financial Stability Facility was set up as a temporary special purpose vehicle, able to provide up to 440 billion Euros of credit to those member states that private lenders would no longer serve because of the risk of their defaulting.
Plahr continues: "Citizens rightly fear the possibility of the transition of the Eurozone into a debt union, which is clearly forbidden in article 125 TFEU and ruled out in the promises given to the population when the Euro was introduced. This has to be strictly avoided, since it would diminish the credibility of not only the legal and political arrangements establishing the Euro currency, but also diminish the overall credibility of promises given in connection with the European integration process."
We as the Young Liberals of Europe therefore call for:
- Strict budget discipline in all member states of the Economic and Monetary Union (EMU). As laid down in the treaties, member states ought to aim for balanced budgets, with a three percent budget deficit being the maximum allowed under extraordinary conditions. Stronger emphasis should also be laid on staying below the maximum debt level of 60% of GDP as defined in the second criterion of the SGP.
- A stronger enforcement of the criteria of the Stability and Growth Pact by creating gradual and automatic sanctions in the preventive and corrective arms of the Stability and Growth Pact which are not only financial, but also political, and calls for a new Stability and Growth Pact that would allow for temporary suspensions of payments from the cohesion and structural funds to countries that repeatedly violate the SGP.
- The depoliticisation of the power to enforce the Stability and Growth Pact, by moving the decision from the ECOFIN council to an independently enforced mechanism executed by the European Commission;
- The orderly phase-out of the EFSF on 30 June 2013, as planned and promised at the time of its creation;
- The introduction of European standards for EMU member states' financial accounts, including clear and enforceable reporting standards that are cross- checked by EUROSTAT.
Plahr, who also is a member of the ELDR Bureau, adds: "These are also the demands of the European Democrat and Reform Party (ELDR), as agreed on at the recent Party Congress in Helsinki. We call on all European leaders to take their responsibility seriously and deliver a stricter Stability and Growth Pact along those lines!"
Reacting to current negotiations regarding the reform of the Stabilty and Growth Pact, the European Liberal Youth (LYMEC) calls on EU leaders to not jeopardize the Euro currency by agreeing only on mock tightening of the Stability and Growth Pact.
LYMEC President Alexander Plahr states: “The stability of the Euro currency is to a large extent based on the credibility of its regulations and safeguards. However, the sanctions envisaged in the Stability and Growth Pact for excessive overspending have not once been employed, despite massive violations of the pact by numerous member states. This non-employment is due to political meddling by the affected countries, big and small, in the ECOFIN council.”
As a result of irresponsible budget policies and the subsequent sovereign debt crisis, the European Financial Stability Facility was set up as a temporary special purpose vehicle, able to provide up to 440 billion Euros of credit to those member states that private lenders would no longer serve because of the risk of their defaulting.
Plahr continues: “Citizens rightly fear the possibility of the transition of the Eurozone into a debt union, which is clearly forbidden in article 125 TFEU and ruled out in the promises given to the population when the Euro was introduced. This has to be strictly avoided, since it would diminish the credibility of not only the legal and political arrangements establishing the Euro currency, but also diminish the overall credibility of promises given in connection with the European integration process.”
We as the Young Liberals of Europe therefore call for:
• Strict budget discipline in all member states of the Economic and Monetary Union (EMU). As laid down in the treaties, member states ought to aim for balanced budgets, with a three percent budget deficit being the maximum allowed under extraordinary conditions. Stronger emphasis should also be laid on staying below the maximum debt level of 60% of GDP as defined in the second criterion of the SGP.
• A stronger enforcement of the criteria of the Stability and Growth Pact by creating gradual and automatic sanctions in the preventive and corrective arms of the Stability and Growth Pact which are not only financial, but also political, and calls for a new Stability and Growth Pact that would allow for temporary suspensions of payments from the cohesion and structural funds to countries that repeatedly violate the SGP. • The depoliticisation of the power to enforce the Stability and Growth Pact, by moving the decision from the ECOFIN council to an independently enforced mechanism executed by the European Commission;
• The orderly phase-out of the EFSF on 30 June 2013, as planned and promised at the time of its creation;
• The introduction of European standards for EMU member states’ financial accounts, including clear and enforceable reporting standards that are cross- checked by EUROSTAT.
Plahr, who also is a member of the ELDR Bureau, adds: “These are also the demands of the European Democrat and Reform Party (ELDR), as agreed on at the recent Party Congress in Helsinki. We call on all European leaders to take their responsibility seriously and deliver a stricter Stability and Growth Pact along those lines!”
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