Let’s talk about the future
We need to talk about the future. If we do not, others will do it for us.
A few days ago, a European summit took place in Brussels where our future was being discussed by EU leaders, including Prime Minister Lawrence Gonzi.
True, many of us may have been distracted by the Euro 2012. As EU leaders met in Brussels, Italy was kicking the hapless Germany out of the football tournament. Spain had already thrown Portugal out the night before and then went on to prove that it does not take a great economy to make a great football team. The irony of the success of the Mediterranean football prowess could not be sweeter.
In Malta, we had other distractions too. But we would do well to focus on what is truly essential. And Europe’s future is our future and, therefore, what happened in Brussels on the night of Germany’s football demise is of interest for us too.
We ignore it at our own peril. For unless we have a clear vision for our future, we can hardly feel reassured of our future and that of our children.
In essence, there were two important points to note from the summit.
The first is an agreement on stronger action for growth and jobs. A so-called Compact For Growth And Jobs was agreed, in part to give the new French President, François Hollande, something to take home after his recent election.
It did not include a revision of the new fiscal treaty, as he wanted. Instead, a list of measures were decided to bolster growth through action taken both at national and at European level. They range from the reaffirmation of the single market as the key instrument for growth to more and better financing through the European Investment Bank, through EU funds and through new European “project bonds” meant to finance major transport, energy and broadband infrastructure.
The second and the more important item in terms of where we are heading was the report entitled Towards A Genuine Economic And Monetary Union that was up for discussion.
This document, which is short and very readable, proposes the construction of what is essentially a political union in Europe, through four building blocks, over the next decade.
The proposal is overtly intended to include eurozone countries because they are already the most deeply integrated. And that includes us. So let’s have a quick look at these four building blocks that can take us to a political union.
The first is the integration of the financial framework. This means that there would be a banking union, which would ensure a single European banking supervision and stronger common rules on the protection of depositors.
The second is a more integrated budgetary framework. This means the establishment of a fiscal union, including a European Treasury, which will ensure that countries keep their financial house in order and stick to their commitment on their annual budgets, on their public deficits and on their public debts.
They will no longer be able to adopt unsustainable budgets that do not add up and this will put paid, once and for all, to politicians who think they can promise heaven on earth without having any idea of where they will get the money. In other words, promises by the likes of Joseph Muscat will be unmasked for what they really are: hot air.
On the basis of these fiscal guarantees, the issuance of common debt is also envisaged because there will no longer be any scope for moral hazard.
The third is a more integrated economic policy framework, which means that economic policies, whether on employment or taxation, will become ever more closely coordinated.
Note, by the way, that tax coordination does not mean tax harmonisation. We often confuse this in Malta but tax is not even harmonised in the US, let alone in Europe.
The fourth – and most politically sensitive – building block is the political aspect, that is how to ensure that the decisions taken in the first three blocks are legitimate and democratic decisions that are subject to the scrutiny of elected representatives.
But it also means that the entire process must require public support. In other words, no country and no nation will be forced into this union. That is for each country to decide, including us.
Although couched in diplomatic and cautious language, the document is nothing short of a road map to a political union. Indeed, that same week, the vice president of the European Commission, Viviane Reding, wrote in all national newspapers, including The Times, calling for a strong European political federation.
Asked for my reaction to her call by this newspaper, I stated that this is the next big vision that politicians in Malta too should have. For it is the road to the lasting stability and prosperity that I would like my own country too to share.
We shall see which ones will rise to the occasion.
Dr Busuttil is a Nationalist member of the European Parliament.