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European Voice: Wishful thinking will not prevent a future crisis

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Gunnar Hökmark today comments together with his EPP colleagues Bendt Bendtsen, Krišjānis Kariņš, and Monika Hohlmeier on the final report of the European Parliament’s CRIS committee, which was adopted on May 30.

The article can be read below.

Wishful thinking will not prevent a future crisis
By Bendt Bendtsen, Krišjānis Kariņš, Gunnar Hökmark, and Monika Hohlmeier (Members of the European Parliament)

Two years after its establishment, the special European Parliament committee on the financial, economic and social crisis (CRIS) finally adopted the second draft of a controversial report last week. The report was adopted with 32 votes for, 9 votes against and 2 abstentions, demonstrating a commitment by the rapporteur and coordinators to get the job done. However, we wish to voice our serious concerns about the final result.

Our main concern is that the European Parliament risks cementing the common view amongst voters that we are remote and out of touch with real developments. The European Parliament should not have to resort to populism or the lowest common denominator, but we should be aware of unwarranted ambitions that tend to resemble those of a think tank or NGO rather than those of the citizens we represent.

A good example of this is the suggestion of a post-2020 EU budget of between 5-10 percent of the Member States’ total GDP, at the expense of the national budgets. In the case of Germany, this would mean an increase in its total national contribution from €21 bn to approximately €200 bn. That’s almost twice as much as the entire EU budget for 2011. In Denmark, the contribution to EU would surpass the current national budget for health. Furthermore, it is unclear how a budget ten times the size of the current budget, in and of itself, would help prevent future economic or financial crises. While the EU should and does play a role in alleviating some of the regional economic and social differences within the Union, the average European in our member states has no interest in the establishment of an enormous transfer union, as implicitly suggested by the CRIS report.

The report also tinkers with the principle of subsidiarity in several ways, suggesting the establishment of a European Treasury, qualified majority voting on corporate tax bases, and more own resources. While such ideas may have individual merit, it is wrong-headed to attempt to impose elements of a Federal State by circumventing the will of the

The current economic crisis in Europe is basically a result of unsustainable public spending, and unsustainable private investments. This is true regardless of the colour of past or present governments, and regardless of the Member State. The basic solution therefore is to bring down public debt, and to encourage sustainable private growth. This should have been the main message in a report that now risks compromising the sincerity of the European Parliament at a time where Europe’s institutions should concentrate on delivering tangible results, not wishful thinking.