EU leaders lack Draghi and Letta’s ‘fire of urgency’, says Greens chief

7 months ago 31

European leaders lack the “fire of urgency” of Mario Draghi and Enrico Letta – authors of two strategic reports on the EU’s future – and are being driven by “political expediency”, the co-president of the Greens/EFA European Parliamentary group, Philippe Lamberts, warned on Thursday (18 April).

Talking to the press on the sidelines of a European summit on competitiveness, Lamberts said EU leaders seem to be focusing on policies that threaten to lead the bloc towards “political suicide.”

“When I read Letta and when I listen to Draghi, what I feel is the fire of urgency,” he said, contrasting it with the recent messaging from EU leaders.

The Union’s recently agreed fiscal rules, for example, will mandate a wave of “Brussels-driven austerity” and also represent a “distraction” from more pressing political concerns – the need to green the continent’s economy and boost its lagging competitiveness, Lamberts argued.

“We cannot afford these kinds of distractions,” he said, adding “[These rules] are economic suicide, environmental suicide, geopolitical suicide, and democratic suicide.”

Lamberts, a Belgian national, also compared EU policymakers to the “sleepwalkers” who led Europe prior to the outbreak of World War One.

“To me, it’s the most obvious case of sleepwalking… where basically elected decision makers think they are doing the right thing and are actually hastening chaos. That is what is happening.”

The EU’s new fiscal rules maintain the bloc’s original thresholds for member states’ deficit and debt at 3% and 60% of the GDP respectively, but alter somewhat the previous requirement to cut excess national debt-to-GDP ratios by 1/20th each year.

Instead, member states with public debt-to-annual GDP ratios above 90% must reduce their debt burden by one percentage point each year on average, while those with debt levels between 60% and 90% of annual GDP are required to cut their debt ratios by 0.5 percentage points on average per year.

Lamberts’ comments came on the day that Letta – who, like Draghi, also served as Italian prime minister in the past – presented his proposals to EU leaders on how to “complete” the bloc’s single market, notably by integrating the telecommunications, energy, and financial services sectors.

It also followed a speech by Draghi on Tuesday, where the former European Central Bank president called for the bloc to undergo “radical change” to enhance its competitiveness, including by better securing critical supply chains and “enabling scale”, particularly in the telecommunications and medical sectors.

Lamberts suggested that Draghi’s report, due out at the end of June, will prove especially important because of the key role the Italian played as head of the ECB during the eurozone crisis in the 2010s.

“To me, Draghi is important because he was the one at the helm of monetary policy when he had to deal with the fact that fiscal policy was not aligned,” he said. “And so basically all the heavy lifting had to be done by the ECB. So he knows what was missing back then.”

On the need of public investment, Draghi will ‘come around as well’

However, Lamberts, who is stepping down as an MEP in June after 15 years in the European Parliament, disagreed with Draghi’s call for the private sector to provide “most” of the required investments to boost the bloc’s competitiveness.

“You have heads of states and government who are facing a wall of investments, and then they seek refuge in, not the fact but the fiction, that most of the investment will come from the private sector,” he said.

“This will not happen. You will have private investment only if this investment is financially profitable. Anything that is not profitable will not come from the private sector, period. It’s as simple as that.”

But Lamberts also suggested that Draghi — whom Lamberts said is “heads and shoulders above” other European leaders — would likely change his mind about the critical role of public investment.

“I think it’s a wrong analysis because that’s the bias that Draghi has,” he said.

“Ten years ago he underestimated the green transition. Now he’s coming around. And now he underestimates the public part of the green transition. I bet that some years from now he’ll come around as well.”

[Edited by Zoran Radosavljevic/ Anna Brunetti]