2006 annual report on the Euro Area (debate)
President
The next item is the report by José Manuel García-Margallo y Marfil, on behalf of the Committee on Economic and Monetary Affairs, on the 2006 annual report on the euro area (2006/2239 (INI)).
José Manuel García-Margallo y Marfil
rapporteur. - (ES) Mr President, this is the first time that Parliament has debated a report on the economic situation in the euro zone and I therefore regard this report as being of unique importance, particularly as this debate - this analysis that we are conducting jointly for the first time - is taking place at a time when the situation is both politically complex and economically uncertain.
I say it is politically complex because, as we are dealing with institutional issues here, I cannot ignore the fact that the debate on what to do with the Constitutional Treaty is still ongoing. Another point that I cannot ignore, either, is that this report is being debated within a 'new era' in terms of monetary policy - with interest rates that have been rising for some time and threaten to keep on rising - and at a stage when we are embarking on the new Stability and Growth Pact as revised by the Commission, and when the Member States are for the first time coming before the European institutions to account for what they have done regarding the Lisbon Strategy in their national reform plans.
I say that the situation is economically confused because, while I agree with the Commission's view that the economic situation is good, or at least much better than it was previously, I must emphasise that our potential 2% growth is not enough to absorb Europe's unemployed, to keep pace with our competitors or to maintain our standard of living.
As is customary in this House, this report is divided into several sections: macroeconomic policy; reforms, with special emphasis on the internal market; and institutional issues, focusing on economic policy coordination and external representation.
In the area of macroeconomic policy, there is nothing really new other than what we said in the debate on the broad economic guidelines. What the doctor prescribes for our macroeconomic policy is more stability, more stability and more stability.
On monetary policy, the point that we highlight - and I repeat that we are highlighting institutional issues - is that we would like to see greater transparency and openness in the European Central Bank. We would like to know why it does what it does, and how it manages and takes into account the two pillars on which it bases its decisions. That is why we are asking for short minutes to be published showing the arguments for and against a particular decision.
On the subject of budgetary policy, this report's first finding is that monetary policy may be losing the momentum that it has shown so far, and budgetary policy must take up the torch. That, as I have highlighted before, leads us to call on the Commission to adhere to a strict interpretation of the Stability and Growth Pact, and on the Member States to work harder at cutting their deficits, especially in good times. Something new that we are calling for is greater coordination of Member States' fiscal calendars and of the economic forecasts that they use in making their budgetary projections.
It does not make sense for countries taking part in the European Economic Union to use different forecasts of oil prices or of interest or exchange rate trends; in our dialogue with the national parliaments, we should like everyone to know what we are talking about.
On the matter of public debt, we also call on the Member States, as usual, to make a greater effort to cut public debt in order to free up resources and to address the Lisbon Strategy and the budgetary challenges that will result from the ageing of our population. The last point - which has been repeated already - is to review our fiscal systems in order to enhance the competitiveness of Europe's economy.
With regard to reforms, we prescribe Lisbon and more Lisbon. We want the public to see how well each Member State is performing. We therefore call for a code of conduct that will enable us to put greater pressure on the slowest countries and, through the dissemination of good practice, enable them to see how countries at the top of the class operate.
Regarding the internal market, we need freedom and more freedom, in contrast to the protectionist temptations that we have seen in recent years, as well as development of the services market. In short, we want consolidation of fundamental freedoms.
As regards institutional issues - I want to focus on improving the way the Union operates - we call for a trialogue between the Council, the Commission and Parliament to take place quarterly, in parallel with the dialogue that we have with the European Central Bank, although I am aware that the Commissioner is not enamoured with the idea.
To facilitate this trialogue, we ask that the Eurogroup draw up a roadmap showing which way the euro zone will be heading in the next two years. We call on the Commission to provide us, in subsequent reports, with a more specific toolbox in order to promote such talks, and we invite the Commissioner and the Council to meet with us every three months.
On the matter of external representation, we find that it is not consistent with the international weight of the euro. We are pleased that the Member States spoke with one voice at the meetings of the international institutions in Singapore, and we call for greater coordination and imagination to ensure that the Member States are represented as a single entity in the International Monetary Fund, the World Bank and other international bodies.
I am grateful to all the shadow rapporteurs and all my fellow Members for the efforts that they have made.
Joaquín Almunia
Member of the Commission. (ES) Mr President, ladies and gentlemen, I would first like to thank Mr García-Margallo and the European Parliament Committee on Economic and Monetary Affairs for the interest that it has shown in analysing this first Commission Annual Report on the Euro Area, whose main objective is to promote dialogue and debate between our two institutions with a view to identifying the priority measures that will improve the way that the whole area operates.
Since I had the opportunity to present this report to the Committee on Economic and Monetary Affairs in July, the predictions for growth in the euro zone for this year and the following two years have significantly improved. Last week I presented our autumn predictions, which can be summarised by saying that all of the economic indicators are pointing in the right direction: rising economic growth, which is the highest in the euro zone since the start of the decade, falling unemployment, stable inflation and clear reduction in public deficits.
The factors that have contributed to this positive picture include external factors, such as the sustained strength of the global economy, but also internal factors, which contradict the image of stagnation and paralysis that has been used to portray European economies, and in particular the economy of the euro zone. Among these internal factors are the reforms in several countries in the euro zone in recent years, the budgetary consolidation efforts and the response of European economies to the significant increase in oil prices, which is more efficient than many expected.
The existence of the euro zone has also significantly contributed to this favourable climate, thanks to the good finance conditions for families and businesses provided by the current level of interest rates and also thanks to the protection the euro has provided against the turbulence of the financial markets, as occurred in the spring.
However, all of these positive factors do not invalidate the main conclusions of the Commission report on measures that should enable us to improve the operation of the area, which the majority of you agree with, according to Mr García-Margallo's report.
I am talking about the need to go further with structural reforms, to consolidate the single market and to ensure more effective and integrated external representation of the euro zone than there has been so far.
These three priorities, which are set out in the report, will also be included in the Annual Economic Report that I will present to the Commission on 22 November, which this year focuses on the operation of Economic and Monetary Union and, in particular, of the euro zone, in the light of the eight years of experience that have been accumulated.
Having examined these three priorities and in relation to economic reforms I agree with the statement made in the report regarding the importance of carrying out the reforms promised by the Member States in the national reform plans as part of the Lisbon Strategy.
Once monetary policy has been unified and budgetary policy has been made part of the Stability and Growth Pact, the economic policies of each of the national governments should make the necessary adjustments in terms of productivity, competitiveness and the operation of markets in order to ensure a high degree of convergence within the area.
In December, based on the reports submitted by the Member States, the Commission will adopt the report on the first year of application of the national reform plans. Our report will include an explicit evaluation of the degree to which each of the Member States has put these reforms into practice and, if we consider it to be necessary, we will give recommendations for each of the countries.
We will also include an evaluation in the report of what we the European institutions have done in application of the reforms required for the Lisbon Community programme.
We agree, as I said before, on the need to go further with the internal market, which, along with the single currency, is one of the two essential instruments for promoting more efficient allocation of resources and offering greater opportunities to businesses and more choice to consumers.
The integration of the financial system is also a top priority for the proper functioning of Economic and Monetary Union. In this sector, the roadmap is set out in the Commission White Paper on financial services covering the 2005-2010 period.
With regard to external representation of the euro zone, I can confirm that the European Parliament agrees on the need for coherent external representation. As I had the opportunity to explain in one of my recent speeches to the Committee on Economic and Monetary Affairs, the European Union spoke with once voice in Singapore, as Mr García-Margallo has just reiterated. In October, after this meeting, both in the Eurogroup and in Ecofin, we debated this matter again and arrived at some additional agreements that are moving in the right direction.
Mr García-Margallo's report also contains comments on monetary policy and on the application of the Treaty criteria for expanding the euro zone. The European Central Bank is one of the most transparent central banks in the world and this perception is highly valued by the markets, which appreciate the Bank's communication policy.
With regard to the application of the inflation criteria for the enlargement of the euro zone, which we have debated many times in this House recently, I refer to what has been said so far.
Finally, I do not know what doubts Mr García-Margallo has perceived. I am entirely in favour of dialogue with this House on the operation of the euro zone. The Chair of the Committee on Economic and Monetary Affairs is well aware of this, as just a few days ago I had the opportunity to discuss with her how we can put it into practice.
Othmar Karas
on behalf of the PPE-DE Group. - (DE) Mr President, Commissioner, ladies and gentlemen, the Group of the European People's Party (Christian Democrats) and European Democrats welcomes this report; not only is there no dispute about that, but we also say 'yes' to its demands, its analysis and its substance.
By way of elaboration, I would like to say something about six fundamentals. The first is that the euro is the EU's most potent response to globalisation.
The second is that it may be the most important instrument for a successful internal market, but it is not the only one; it must go hand-in-hand with the accelerated implementation of the four freedoms in the internal market by means of pro-active innovation, the removal of structural weaknesses and the stabilisation of the social security, pensions and health systems.
Thirdly, all EU Member States need to join the euro zone. Any EU Member State that resists the euro and sets itself in opposition to the euro zone, that fails to make every effort to become part of the European currency area, weakens the internal market and lessens the European Union's resistance to the effects of globalisation.
Fourthly, the Maastricht criteria are the entry ticket, and I am glad that the Commission, in its decisions over recent months, has held fast to them.
Fifthly, the Stability and Growth Pact is the necessary framework for budget policy. We demand that cyclical increases in revenue be used to reduce deficits and states' debts.
Sixthly, according to today's newspapers, the French interior minister, Mr Sarkozy, is calling for the euro zone to be under European economic government. Those who want to strengthen the European economy need to ratify the constitution and endow the Commission with the necessary powers; that is why we favour a strong euro on world markets and a single voice in the IMF, along with a European foreign minister to enable the European Union to carry some global clout.
Pervenche Berès
Mr President, Commissioner, I welcome the opportunity presented to us by this debate in plenary to review together the operation of the euro zone at a time when, as you have said, the outlook in certain areas is improving, yet when all agree that the potential for growth is not fully realised and when our economies are handicapped by an exchange rate that makes euro zone exports difficult and leads some of our businesses to contemplate relocation in order to produce their goods in the dollar zone.
This report presents an opportunity for review at a time when the Stability Pact has been revised and all agree that the commitments made by the Member States of the euro zone perhaps need to be better differentiated from the commitments made outside of the zone. From this point of view, the report is valuable, and I believe that we must also congratulate our fellow Member Mr García-Margallo on the spirit in which he approached it.
We need to go further than reforming the Stability Pact in order to better coordinate timeframes and data and to ensure that, essentially, the Commission and the Central Bank do not evaluate the performances of the Member States of the euro zone solely from the point of view of their deficits, but also in the light of their strengths and weaknesses in a wider context. You mentioned this in your speech, Commissioner, and I am grateful for your having done so. I invite you, moreover, to continue along these lines.
There is also a need to link macro-economic analysis more closely with developments on the financial markets. Furthermore, the way in which rating agencies have been able to be involved in the Italian question and to assess that country's debt must prompt us to be more vigilant, since, if rating agencies had to take a high-level role in the assessment of the debts of the Member States, there would be a very serious risk with regard to the leadership of the euro zone.
One final word, Commissioner, to reinforce what has been said by several others on the subject of exchange rates: we need more economic policies and economic leadership in this area.
DanutBudreikaitė
on behalf of the ALDE Group. - (LT) Mr President, ladies and gentlemen, the Economic and Monetary Union, with a common currency, is the highest level of economic integration the European Union has thus far reached. The euro zone has already been operating for six years, and its first enlargement revealed that the Maastricht criteria established more than a decade ago no longer correspond to the reality of the enlarging EU and the developing global economy. The euro zone countries are unable to implement the indicators that are important for the operation of the euro zone, especially the requirement for price stability.
The European Commission (according to the EC Treaty) and the European Central Bank are both applying different criteria of price stability to the euro zone. According to the European Central Bank, price stability ensures lower inflation, which is still close to 2%. Based on the methods of the European Commission, the stability of prices in the euro zone is established by considering more than just the rate of inflation of the euro zone countries and, therefore, it is impossible to eliminate uncharacteristic inflation factors.
I call on the Commission and the European Central Bank to work together on improvement of the concept of euro zone price stability and methods for its establishment in order to avoid misapprehensions in the process of euro zone enlargement and implementation of indicators in the euro zone itself. I invite euro zone Member States to properly implement the euro zone membership criteria that were adopted by the Member States themselves for better economic integration. Furthermore, I would like to emphasise that structural reforms are necessary for the successful competition of both the European Union and the euro zone in the global economy, and especially in further implementation of a domestic market with free movement of services, which has contributed to the competitiveness of the European Union.
Jens Holm
on behalf of the GUE/NGL Group. - (SV) Mr President, Commission, fellow Members, ladies and gentlemen, I wish to begin by thanking Mr García-Margallo y Marfil for this report on the situation in the euro zone. The rapporteur observes that the prognoses for the euro zone look better than they have done for a long time. That depends, of course, on what economic policy it is intended to conduct. The policy pursued so far has not exactly been a success. Large parts of Europe are in social and economic crisis. According to the latest statistics, seven million people are living in poverty in Europe's largest economy, Germany. One of the causes of this is, specifically, economic and monetary union. EMU is presided over by the world's most conservative central bank when it comes to inflation, and its Stability Pact stymies economic policy. As the European Trade Union Confederation (ETUC) recently observed in a report, it is not more of this inflexible policy that we need. Instead, the peoples of Europe need an active financial policy and a reorganisation of EMU.
As you know, my own country, Sweden, is not a member of EMU. In 2003, a clear majority voted against participating in it. That is why I am rather disturbed to read the report, which notes that, as from 2007, the euro zone will comprise 13 Member States but that - and I quote - 'macro-economic policy coordination and the internal market will involve all 27 Member States'. What does that mean? Does it mean that Sweden, which has voted against EMU, will have to participate in it sooner or later? I should be grateful for an answer from the Commission and also from the rapporteur, if he is given the floor at the end of the debate.
Zbigniew Krzysztof Kuźmiuk
on behalf of the UEN Group. - (PL) Mr President, in our discussion of the 2006 annual report on the situation in the euro zone there are two points I would like to make. The first is the much lower economic growth rate and higher unemployment in the countries of the European Union, and in the euro zone in particular, than in the USA and in the emerging markets such as China and India. Economic growth in the euro zone will in 2005-2007 be almost half of that of the USA, while unemployment will be almost twice as high.
The second point is the higher economic growth rate and the lower unemployment rates in three of the fifteen countries which did not join the euro zone compared with countries inside the zone. No wonder that those countries are not rushing to join the single currency. The new Member States now have even greater reservations about joining the euro zone, even though they are continuing to work hard to meet the Maastricht convergence criteria.
Dariusz Maciej Grabowski
on behalf of the IND/DEM Group. - (PL) Mr President, growth in the euro zone has been the lowest in the world for many years, as it was in 2006 as well. But instead of looking for the causes at home, in the monetary policy of the European Central Bank, attempts are being made to impose the so-called harmonisation of budgetary and tax policies in the Member States.
This is an attempt to hobble the initiative of Member States, a kind of diktat imposed by the stronger on the weaker. If the point of creating a common currency was firstly, to simplify the system and thereby to reduce costs, secondly to attract foreign investment, and thirdly, to make use of the privilege of issuing currency and creating a new world currency, then in the latter two cases the desired effect has not been achieved.
Foreign investment continues to focus on the United States and Asia. Demand for the euro as a world currency is comparatively weak. The opposite effect has been achieved: keeping interest rates high and artificially bolstering the euro has undermined the competitiveness of European manufacturers and reduced export earnings. The common currency and the policy of the ECB appear to be serving the interests of finance capital at the cost of businessmen, consumers and the Member States' national budgets.
The single currency has had an indirect impact on the exports of the new Member States by slowing their development and holding them back. We therefore take the view that there needs to be a radical review of EU monetary doctrine towards restoring authority over currency issue and interest rates to the monetary authorities of the Member States.
Hans-Peter Martin
(DE) Mr President, we can all, in fact, take pride in the euro. Much of what was predicted before its introduction has not come to pass, but there are three things that need constant emphasis. One is that the tax revenues that are now coming in must actually be used to reduce deficits, and we demand this in paragraph 5 of the report. Another is the urgent demand that the Maastricht criteria be rigorously applied. Relaxing them again, in the way they have been in the past, will surely get us nowhere. Thirdly, there is transparency. The ECB lags a long way behind global standards. The ongoing failure to produce anything like adequate minutes of decisions - or indeed any at all - defies comprehension, and this state of affairs is in urgent need of improvement.
Gunnar Hökmark
Mr President, firstly I should like to thank the rapporteur for his report. It underlines the need for cooperation in strengthening the European economy. It is fair to say that the euro has provided Europe with stability that we have never seen before.
When I listened earlier to my Swedish colleague, it sounded as though it was a problem for the European economy to have low interest rates. However, the truth is that we have lower interest rates than ever before. Does anyone think that the European economy would have been better if we had the interest rates of the 1970s or 1980s, or if we had the budget deficits of those years when Europe was losing out in the European economy? Let us stop dreaming and look at the reality. Today we have a common currency that places the emphasis on and encourages competition, trade and investment and focuses on the need for structural reforms, as well as the need for fiscal discipline. That is good. That provides us with opportunities, because the problem of the European economy is not the interest rates, it is the lack of deregulation, it is the lack of more trade and of more of the internal market. We can see that we are more efficient and more successful since we opened up the markets.
I believe that the euro will never be stronger than the European economy and the discipline of the countries participating in the euro. That also underlines the need for the European Central Bank to be independent, as underlined in the report. That is very important, because otherwise we will lose credibility.
From a Swedish perspective, we will soon have the euro in a number of new countries around the Baltic Sea. I hope we will have a debate in my country that will make it possible for us to join them and other euro countries in the years to come.
Udo Bullmann
(DE) Mr President, I am glad that the Commission has produced this report and that it is committed to observing what happens to the euro zone, but equally glad to be able to say that Mr Juncker's presence here today means that there will be a contribution to our debate from the person who has the responsibility of speaking on behalf of the euro zone's members.
So, then, where do we stand? For the first time, we have got closer to the growth target that we set ourselves in Lisbon; growth in the euro zone now stands at 2.8%, which is almost the 3% that we took as a base figure at Lisbon.
In this situation, what is the challenge for the euro zone? What is the essential thing that is at stake? Will we be content with this being nothing more than a little gust of air, no more than an upturn in the cycle that will be gone by tomorrow, or do we want to put something structural in place to ensure that we can draw a deep breath and get the chance to generate a long-term upturn that will last and will - since it is not merely data that make the economy, but people - foster popular confidence?
That is why I believe that we have to make the effort to do what is now needed, namely to make smart investments in the euro zone. Yes, consolidating budgets is a good thing to do, but we cannot simply chant that as a mantra when what we need to be doing is making use of the upturn we are experiencing now in order to embark on a policy of intelligent modernisation that gives us a chance of seriously reducing unemployment, and that, too, is in the report.
Finally, I would like to thank our co-rapporteur and shadow rapporteur Mr Rosati, who contributed to our discussions on behalf of the Socialist Group in the European Parliament, and I do not want to omit Mr García-Margallo y Marfil, to whom thanks are due for having - and not for the first time - made an essential and seminal contribution to macro-economic debate in this House.
Jeffrey Titford
Mr President, events seem to have overtaken this report. In spite of Commissioner Almunia's comments, its upbeat projections for growth in the euro zone contrast sharply with the economic data released at the end of last week, which put growth in the French economy at zero. There are also signs of faltering growth across the euro zone, which will not be helped by the austere taxation regimes being introduced in Germany and Italy next year to meet the euro zone's stability requirements.
What this report does not tell us is that the Government of Italy is on the brink of collapse because of Mr Prodi's determination to introduce tax increases and budget cuts demanded by the European Commissioner for Economic Affairs to bring Italy into line with the Maastricht Treaty. It also does not mention the riots in Hungary following the Hungarian Prime Minister's revelations that he had lied morning, noon and night about the tax increases and public spending that he had secretly promised that same Commissioner.
Forcing many of our new members of the EU to abide by deflationary policies designed for the more developed economies of the euro zone is generating weak demand, weak growth and mass unemployment. This report also fails to mention that the Maastricht Treaty has turned the Eastern Europeans into second-class citizens: they have no chance of joining the euro zone in the foreseeable future, while having to manage their economies in line with its requirements. Sooner or later the people of Europe are going to get restless with a system that keeps them permanently in the economic slow lane, while denying them any democratic say in how it should be run.
Sergej Kozlík
(SK) I would like to welcome and support the proposal by the opposition in the European Parliament concerning the 2006 declaration on the anniversary of the euro zone. In particular, I would like to highlight the passage calling for a thorough examination of the mechanism of the three Member States that are the best performers in terms of price stability, and the methods for calculating the reference inflation rates.
The point is that the varying rates of inflation among the euro zone Member States do not reflect different approaches to macroeconomic policy, but are rather the result of structural factors. This premise, I believe, applies especially to the new Member States of the European Union. The relative share of energy-intensive and raw material-intensive output in many of these countries is greater than in the euro zone. A major portion of this output is then transported to the euro zone either directly or as part of finished products, for instance in respect of the sheet metal used to manufacture car bodies.
Because of these structural reasons, the new Member States are more susceptible to fluctuations in the price of energy and raw materials; by the same token, they serve as a buffer that absorbs the impact of price changes on the euro zone. This problem particularly affects the Slovak Republic.
The current approach to assessing inflation criteria is, therefore, inappropriate and may in the long run diminish the chances of new Member States gaining entry to the euro zone, even if they comply with all other requirements.
Zsolt László Becsey
(HU) Mr President, first of all, I congratulate the Commission and the rapporteur for their consideration of this difficult subject. I am particularly pleased with the remarks concerning the flexibility of the labour market and the goal-oriented approach to education. I believe that our conclusions point in a single direction. As someone from one of the eastern European countries waiting to join the euro zone, I would like to make only four brief remarks:
First: with respect to the enlargement of the euro zone, no other standard for admission should be applied than the political standard that applies to those who are already inside.
Second: it is important that the new Member States join as soon as possible, and therefore there can be no interpretation, above all in the matter of inflation, sustainability and the reference level, which would in practice postpone for a long time the accession of the new Member States, which are still lagging behind the EU economic average, and are thus still in the process of catching up in terms of wage and price levels. This is a point on which Mr Kozlík has given a very good explanation.
Third: I agree that the statistics of the Member States have to be closely monitored, and that the Commission must respond with political tools, if nothing else, such as informing a European Summit, if a Member State is particularly undisciplined and heading in the wrong direction. In the long run, turning a blind eye is unacceptable. The Commission has a political responsibility as well in this regard.
Fourth: deepening the internal market is essential, and it is important that everyone observes the criteria. The new Member States are doing this. However, there is a contradiction: on the one hand, the labour market, the Schengen zone, remains closed to the new Member States, and the Labour-Intensive Services and the Posting of Workers directives are very restrictive. On the other hand, however, we are obliged to open up the market in financial services to everyone. This imbalance does not make the integration of Member States any easier from the perspective of deepening the internal market.
Benoît Hamon
(FR) Mr President, Commissioner, ladies and gentlemen, this report contains several interesting and welcome recommendations for which I would like to thank the rapporteur.
Thus, instead of simply calling for public spending cuts, the report recommends freeing up resources to make what are presumably necessary public investments in education, training, infrastructure and research.
Furthermore, instead of recommending wage cuts, the European Parliament admits - that is in fact the term that is used - that, in the long term, real wages and productivity should grow simultaneously. I would thank the rapporteur for his efforts at moderation and conciliation.
However, the subject of this debate is the economic performance of the euro zone. In fact, I believe that, despite the recent and even unexpected improvement of growth indicators, the economic situation remains fragile and unsatisfactory. After all, the Commission's macroeconomic policy affects the daily lives of millions of Europeans whose purchasing power, I would point out, is threatened by stagnating salaries and by an increase in the cost of living and whose working conditions continue to decline, while social protection is also dwindling.
The practical response offered by the Commission and the European Central Bank is always the same: to fight inflation through budgetary austerity and wage cuts, while increasing competition in the services, capital, products and labour markets.
Perhaps the time has come to evaluate the results of this policy and to consider whether dismantling public services, deregulating the labour market and cutting public expenditure really is a sustainable way of driving growth in the euro zone and in the European Union. Unfortunately, no period of reflection is on the agenda. In two days, we shall have to give our opinion on a 'services' directive that is admittedly improved, but that remains true to Fritz Bolkestein's deregulatory model.
In a few months' time, we will have on our agenda a directive proposing the end of the public postal service. As for energy, despite the chronic instability of the oil-producing zones, despite the gas blackmail exercised by a neighbouring country, despite global warming and despite power cuts extending across half of Europe, it is all to no avail and the response remains the same: to complete the liberalised and deregulated internal energy market in Europe. The euro zone's economic report is perhaps a little better this year, but its social and political performance remains, in my eyes, as bad as ever.
Georgios Karatzaferis
(EL) Mr President, I have been listening to the speakers all this time, especially the competent Commissioner, Mr Almunia, arguing in favour of the canonisation of the euro. But is that really the case? Perhaps, what we are tying to canonise, here in this Chamber, is the bad demon of the citizens of Europe which we represent?
The value of the euro rises and we are all delighted. However, at the same time, the number of citizens living below the poverty line also rises. Of the 500 million people in Europe of 27, 100 million people are living below the poverty line. In other words, people who can only afford meat once a fortnight, who cannot buy clothes for their children, who cannot change their car until they have had it for 15 years. What does the euro mean to these people?
I would remind you that it started with an imperium. We do not want one and two euro notes and yet 75% of daily transactions are below the 5 euro line. We are delighted that the euro is rising. It has risen from 0.87 cents to the dollar to 1.30. What does that mean? No country which does not have proprietary products can sell to the United States of America or other countries. Of course Germany can sell Mercedes because it is a Mercedes, but how can my country, which has no proprietary products, sell to America - the big market - when it can find the same product in a neighbouring country outside EMU for a third of the price? How will tourists come to Greece or, Mr Almunia, how will American tourists go to Spain when it is impossible to monitor the value of the euro.
Can we not look at all this? Can we not address all this? It is a huge problem and you have a huge responsibility in the Commission, especially you personally, Mr Almunia.
Andreas Mölzer
(DE) Mr President, ladies and gentlemen, while we who live in the euro zone must, of course, make it our concern to leave our children in as little debt as possible, not under any circumstances must we, in our striving for a more vigorous economy, dispense with social standards. Whenever we are invited to compare our growth rate with that of the USA, the lack of virtually any kind of social system in the United States must not be left out of the equation.
I do not think that we are going to catch them up by forcing masses of public sector workers into retirement and privatising their jobs, or by means of jobs paying EUR 1 an hour combined with the forcing of more and more staff into what appears to be self-employment. We have, in the past, seen more and more of the family silver being sold off in order to gain membership of the euro club, and that must come to an end; we must instead make the effort to get on top of the explosive growth of black-market work, to cut down the bureaucratic hurdles that face small and medium-sized businesses, some of which are becoming harder to surmount, and make it easier for such businesses to get access to grants. Only then will the euro zone have a future characterised by growth.
Dariusz Rosati
(PL) Mr President, Commissioner, it gives me great satisfaction to announce my support for the European Commission's presentation of the first annual report on the situation in the euro zone.
The report provides a good basis for discussing the main challenges facing the euro zone now and in the coming years. There is plenty to discuss. The average growth rate in the euro zone in 2001-2005 was a mere 1.9%. Unemployment rose to 13 million, and the situation with public finances got worse, rather than improving.
Last year did bring a slight improvement in the situation, as you were kind enough to confirm, but this does not change the fact that Europe is falling further behind not just the United States and Japan, but also the Asian boom countries. Unresolved structural problems lie at the root of European stagnation. The high cost of setting up and running a business, high overheads on labour costs, reluctance to innovate, and the maintenance of harmful barriers to the labour market and the services market all reduce the competitiveness of European firms, holding back growth and increasing pressure on public finances. It prevents us from making full use of the opportunities offered by a common currency and a uniform monetary policy.
I therefore call upon the European Commission to put pressure on the Member States to speed up implementation of the necessary reforms. The need for this has been demonstrated in numerous reports and studies, including the Shapiro report and the high-level report made under the chairmanship of Wim Kok.
Macroeconomic policy in the euro zone needs to be improved. What is missing above all is proper coordination of fiscal policy among the Member States. At the same time, the common currency requires fiscal discipline which needs to be observed jointly by all Member States. This will make it possible to balance macroeconomic policy and to restore a proper policy mix.
Monetary policy needs to be based on clear, transparent rules, and must be more forward-looking in character. Excessive secrecy in decision-making, lack of clear regulations on the role played by the 'two pillars' of monetary policy, particularly the M3 monetary supply, which create serious doubts regarding the rules for appointing members of the board of the European Central Bank, all restrict the effectiveness and transparency of the common monetary policy, and may undermine the position of the common currency.
A substantial element in strengthening the euro zone is expanding it and taking on new members. In this process we must observe the rule that candidates are bound by the treaty, the whole treaty and nothing but the treaty. This means that they must meet the criteria set out in the treaty, but also that additional requirements cannot be imposed upon them. I am convinced that the accession of new euro zone members, whose deficit and public debt levels are often much lower than those of the other Member States, will help to strengthen the euro zone.
In conclusion, I would like to thank Mr Juncker, the president of the Euro Group, for taking part in our debate, and hope that it will inspire him and help him to manage the Euro Group even better. I would also like to thank Mr García-Margallo y Marfil for preparing this excellent report, and give my full agreement to the majority of the proposals made in it.
Joaquín Almunia
Member of the Commission. (ES) Mr President, thank you very much to all of the Members for their contributions. I think that the debate shows that it is useful to have a report like this every year on the operation of the euro zone and its results, this being the first time that it has been adopted by the Commission and is being debated in Parliament.
As a conclusion to today's debate, I can make an optimistic observation: the euro zone is growing again, despite the fact that some said that it was a zone of very low growth. The euro zone is growing by 2.6% this year, perhaps even more at the end of the financial year. The euro zone is creating jobs and reducing unemployment. According to our predictions, between now and 2008, five million jobs are going to be created in the euro zone. It is not said very often, but it is true that since the beginning of this decade, despite low growth, in the euro zone and of course also in the whole of the European Union, significantly more jobs have been created than in the United States, which always establish themselves as the reference point to be imitated in policies and strategies for job creation.
I therefore think that, if we analyse the operation of the area and the results that we are achieving through monetary integration, there are elements that could justify a moderately optimistic assessment. However, it is also true that there are elements that should continue to attract our attention, as there is still a great deal to do.
There is still a great deal to do, as many of you have said, in order to increase potential growth and continue to reduce unemployment, so that greater growth and a higher level of employment can improve the lives of our citizens, reduce inequalities and offer more solid bases for our social protection systems and for our social services system. This firstly requires, as many of you have said, that we continue to comply and comply better with the stability and budgetary discipline criteria laid down in the Treaty and implemented through the application of the Stability and Growth Pact, which is being applied in a reasonably positive way on which there is a consensus. We also need to continue with the reforms and go further with the Lisbon Strategy, because this plan of eliminating barriers and facilitating the four freedoms has proven to be a solid basis for creating better conditions in which to face the future.
It also requires, according to the analysis and many of its conclusions, better governance in the euro zone. I think that the efficiency of the operation of the Eurogroup, since it has had a stable presidency, led by Mr Juncker, who is with us today, has improved. It is enabling us to make better progress in analysis, mutual understanding and coordinating decisions that affect the Member States, but which cannot be imposed on them from above, and need to be adopted by consensus, with their full conviction, and in accordance with their competences. We also need to strengthen dialogue.
If any of you still have any doubts, ladies and gentlemen, in the opinion of the Commission, and in my opinion, as the Commissioner for Economic and Monetary Affairs, we need to enhance bilateral dialogue between the Commission and Parliament on these matters. I think that we need to move forward in a tripartite dialogue between the Presidency of the Eurogroup, the Commission and Parliament, on the following matters: the operation of the Eurogroup, on any subjects that draw our attention and, if you agree, I also think that we need to move forward with a dialogue including, while fully respecting its independence, the European Central Bank and why not? which has a monetary dialogue with you but also has a monthly dialogue with us. I think that Parliament can and should, every now and again, be part of this exchange of views between all of the institutions, whose common goal is for the euro zone to operate correctly and for the euro, our common currency, to produce the best possible results for all the citizens of Europe.
Juncker
President of Eurogroup. (FR) Mr President, I should like first of all to apologise for being late. The Luxembourg-Strasbourg route is terribly congested at the entrance to Strasbourg, and traffic jams prevented me from arriving on time. Being conscious not to disturb the peace and quiet of the people of Strasbourg, I did not want to 'go all out'; I scrupulously adhered to the highway code, and I was the first to suffer, since I have arrived late for this debate. Nevertheless, I should like to tell you that I attach importance to this debate because Parliament's thoughts are not only important in themselves, but they also sustain the debates within Eurogroup, which I chair, assisted, inspired, driven and spurred on by the Commissioner for Monetary Affairs, my friend, Mr Almunia.
I should like to begin by saying, Mr President, that I believe that we have strong growth: it is expanding and it is not under threat, despite the attempts to dampen it down, particularly on the part of France. The employment rate is rising and unemployment is going down, although it has not attained acceptable levels. As regards growth, if we look at it in perspective, it is probably stronger than we think at present and is, at any rate, stronger than we thought six months ago.
In 2007, we shall have to see to what extent the cyclical slowdown in the United States affects the economic performance of the euro zone. At Eurogroup, we believe that the impact of the US slowdown on the euro zone economies will be less marked than in 2000-2001. We see that the US cyclical slowdown is primarily hitting the building sector and that it is not going to spread to other sectors of the US economy. Thus the impact on growth in the euro zone will be less marked than before, even though the country-by-country results will reveal some big differences.
Why have we attained a level of growth that seems more acceptable to us today than it did a few years ago? Firstly, because the euro has protected us to a huge extent over the past few years. It is never said enough, when the introduction of the euro is reviewed: the euro has protected us, is protecting us and will continue to protect us! Imagine the state of the European economy and the state of the European monetary systems if the euro had not existed during times of crisis! During this period, when preliminary work was being done on the euro, we witnessed the Latin American, Russian and South East Asian financial crises. Imagine how out of control our system would have let things get before the European system was implemented, at the time of the war in Iraq and of 11 September 2001! Imagine what the performance of the European currencies would be if they still existed, while the geostrategic dramas being played out are a constant cause for concern! Imagine how certain national currencies would have performed after the French and Dutch 'No' votes! The euro has protected us, and it has even protected countries that expressed some misgivings about Europe when it came to their approving the Constitutional Treaty.
The budgetary situation improved when, in all wisdom and with the agreement and often even the active support of Parliament, we amended and reformed the Stability and Growth Pact. Some people felt they were entitled to express their grave concerns following the adoption of the reformed pact. We see today that the mechanisms of the reformed pact are holding up well and that all the governments are making every effort to implement the main rules and guiding principles contained therein. The budget deficits are decreasing, and a general consensus is emerging, which is aimed at all of the Member States taking the prevention aspect of the Stability and Growth Pact seriously: they have all decided to allocate as a priority the fiscal surpluses resulting from the cyclical upturn to the reduction in the deficit and to the reduction in the level of public debt. I welcome that decision.
We, at Eurogroup, are giving more thought to stepping up budgetary controls and we are doing so together with the Commission, whose cordial manner of assisting Eurogroup's presidency is proving to be very effective. We will see during our next meeting - which will be held towards the end of November, and thus after my visit to the Committee on Economic and Monetary Affairs, which you, Mrs Berès, expertly chair - how we can step up these budgetary controls. We will do so, from now on, on the basis of a Commission horizontal report, which will not fail to emphasise the real political problems that exist, including the political-economic ones, or to draft specific recommendations - the form of which we have yet to decide on - to the various Member States, and even to the entire euro zone.
With regard to the currency area as a whole, I should like us to take what is, by now, a long-standing invitation from the Commission seriously this year, and that is to devote a specific chapter of the European Council's conclusions - when it examines the progress made by the Lisbon Strategy - to the euro zone, a chapter that includes the structural reforms that we will have to implement within the various member states of the euro zone.
As regards the structural reform problem, I would quite simply say, Mr President, that we underestimate the value that these structural reforms have already added to the coherence of the euro zone. I do not agree with all - or in general, some - of the structural reforms that have been implemented within all the Member States, but the fact is that, contrary to the idea, to the image that we very often present of the euro zone, an important raft of structural reforms is underway, and we are now already reaping the rewards of this far-reaching structural reform that we have implemented with regard to the euro zone.
When you look closely at the national reform programmes that the various Member States have introduced, you will see that there are many structural solutions, that they are generally in line with each other and that we must proceed further with this raft of reforms, without for all that lapsing into unsavoury neoliberalism and into a boundless, shameless form of frenetic deregulation, to which I am opposed because I still believe that the euro and the euro zone and the consistency of the policies that we will be implementing would gain in credibility if we supplemented our work on structural reforms with the implementation of a set of minimum social rights. This would guarantee all workers, throughout the euro zone, a number of minimum rights, which the Member States, in trying to enhance their national fighting spirits, could not undermine.
Workers in Europe have a right to know where they stand. We must stop giving the impression that the monetary Union is a business that is run by the ministers of finance, the bankers and the big investors and big businesses and that it actually works against the most basic rights of workers, who do, after all, make up the majority of the population in Europe.
I should like to say a word about the enlargement of the euro zone. I disagree with all those who imply that we, in the euro zone, have become stricter than before towards the new Member States which want to join the zone. The criteria that we are applying are those laid down in the Treaty of Maastricht. There has been no demand to change the criteria that we adopted when the Treaty was signed in Maastricht, on 7 February 1992. There is no question of abandoning the nominal convergence policy so as to replace it with a criterion that would omit the application of certain criteria, which the first members of the euro zone had to meet. As for those who call into question the nominal convergence criteria, in non-theoretical terms, I would guard them against the genuine risks of seeing the nominal convergence criteria replaced by real convergence criteria. The application of real convergence criteria would make the new Member States' accession to the euro zone a very distant prospect. I therefore think that we would be wise to confine ourselves to the criteria that are currently ours, and this policy will enhance the credibility of the euro zone.
The way in which the euro zone is represented outside Europe does, in fact, warrant a lengthy explanation, but a brief explanation may suffice. The euro zone must be represented by a man, by a voice and by a seat within every international institution, and particularly within the international financial organisations. I am convinced that we will not have reached that stage when my term in office comes to an end on 1 January 2009. Nevertheless, I firmly believe that the day will come when even the most reticent of Europeans will realise that we are constantly making fools of ourselves in aspiring to co-manage the world's monetary affairs if we continue to appear in international forums without a common plan of action. There you have a few comments that I felt it my right to make, while I apologise for not having been able to reply to all of the speakers, as I usually do; I had to reply briefly because I was not present when the speakers, with the commitment that characterises this Parliament, took the floor.
President
The debate is closed.
The vote will take place on Tuesday at 11.30.
Written statement (Rule 142 of the Rules of Procedure)
Jean-Pierre Audy
(FR) Even though the report by my excellent colleague, Mr Garcia-Margallo y Marfil, puts forward some very interesting analyses and proposals on the euro zone, I regret the fact that it does not raise the issue straightaway of the development of the euro from a technical currency to a political tool benefiting growth and employment. The monetary policy conducted by the European Central Bank (ECB) seems to be at odds with reality: the exchange rate should normally be strong when there is strong economic growth and should depreciate when there is weak growth. The fact is that, in Europe, the opposite has been true since the start of the 1990s. While the Member States are undergoing reforms, the quest for zero inflation through an inappropriate monetary policy is leading Europe to record mediocre results in terms of economic growth.
If this state of affairs continues, at a time when the price of raw materials and of energy is rocketing worldwide, we will have zero inflation and zero growth, and manufacturers will end up setting up their businesses in the dollar zone. With everything that is happening, it is as though the ECB is disregarding economic policy, while its US counterpart is thinking of nothing else.


2. Madagascar
President
The next item is the debate on six motions for resolutions on Madagascar.
Raül Romeva i Rueda
author. - Mr President, this is indeed a topic for decision. It is a topic we have to discuss. There is a political crisis in Madagascar and this brings us to the necessity of responding accordingly to the necessities also of the country.
The power-sharing deal has been negotiated under the auspices of the African Union between the current President Rajoelina and the former President Ravalomanana.
There is the Maputo Agreement and Addis Ababa Additional Act, which remain the only political and democratic solution to the current crisis. We must not forget this. The Maputo Agreement foresees the establishment of a national unity government with a transition period of 15 months.
Let me signal as well that, after this fact, there are some specific and local situations that are worrying in terms of the government issuing a decree legalising the export of unprocessed and endangered wood threatening the biodiversity of the country. This might cause a lot of problems in the future because they can be lost forever.
In this context, we have to remind the Commission and the Member States that to send an election observation operation to Madagascar could be a mistake. We ask not to send a delegation to this country under the current circumstances, to the elections the current government is organising in March, as these elections circumvent the Maputo Agreement. I insist: in this framework, under this consensus and on the basis of the agreement in Maputo, we should not follow this observation election mission.
This has to be accompanied as well by full respect of human rights in the country and full respect of democratic principles and the rule of law. If these conditions are fulfilled then we can talk about this, but in the current situation, in the current context, I think it would be a mistake.
Renate Weber
Mr President, problems of instability persist in Madagascar despite the initiatives of the African Union and the UN. Mr Rajoelina refuses to share power and is removing everyone who opposes him. He recently affirmed his intention to organise general elections without taking account of the timetable provided for in the Maputo and Addis Ababa agreements.
It is no exaggeration to say that the anti-constitutional regime of Andry Rajeolina has taken over the three estates and is doing its best to take over the media as well.
Unfortunately for Madagascar, the human rights violations by the previous president's regime have continued after Andry Rajeolina declared himself president of the High Transitional Authority. The security forces which he directs have frequently intervened in a violent manner to disperse opposition demonstrations and there have been deaths and injuries.
In its report dated 4 February 2010, Amnesty International shows that parliamentarians, senators, lawyers, leaders of the opposition and journalists have been subject to arrest and arbitrary and illegal detention and that some were mistreated during their arrest, while the authorities have not conducted any enquiries.
Unfortunately, once again, the facts prove that those who take power by force reign with force.
Véronique De Keyser
Mr President, there is consensus on this motion for a resolution. The illegal transitional regime headed by Andry Rajoelina is in the process of plunging Madagascar into chaos. It is preparing to make free and easy with the forthcoming elections, which he has announced for March 2010, at the end of a process which has nothing democratic about it and which is taking place outside the Maputo and Addis Ababa agreements.
The illegal nominations of questionable political personalities, the widespread human rights violations and the harassment and arbitrary arrest of parliamentarians, religious leaders and civilians have upset the international community and led it to impose sanctions. Madagascar's membership of the Southern Africa Development Community and the African Union has been frozen. The United States are refusing it the advantages of the African Growth and Opportunity Act. The donors of the International Monetary Fund have reduced their budget by 50%, the UN will examine the situation of this country on 15 February and the European Union has, I believe, suspended its development aid, while maintaining its humanitarian aid.
The situation is therefore tragic, catastrophic, for a population living on less than a dollar a day. We are terribly concerned about this situation and this joint emergency motion for a resolution is proof of our concern. We support the mediation efforts being made by Joaquim Chissano, the former president of the Republic of Mozambique, and urge the four political groups to return to the negotiating table. There can be no other solution. We are also calling on the African Union and the Southern African Development Community to resume contact in order to bring the transitional process to a proper conclusion and we call on the Commission to report to us on the consultation process under way with Madagascar under Article 96 of the Cotonou Agreement.
Bernd Posselt
author. - (DE) Mr President, there is concern in some of the world's capital cities that our motion for a resolution could lead to an escalation in the situation in Madagascar. However, our aim is to bring peace to the region. I refer, in particular, to Article 14 and 15, which are quite clearly focused on dialogue.
The African Union, the European Union, the UN, neighbouring countries, the Contact Group and, last but not least, France, have all been called upon to play their part in ensuring that the four (at a minimum) different political movements that there are in Madagascar can find common ground, that Madagascar does not become a failing state, that it does not drift further towards catastrophe and that, instead, it finds a peaceful and negotiated solution. However, this will only be possible as long as nobody tries to establish a dictatorship there, nobody withdraws from the peace process and all the parties return to the negotiating table, or otherwise this wonderful, but ravaged, country will have no future.
Marie-Christine Vergiat
Mr President, ladies and gentlemen, the same is happening in Madagascar as in numerous other countries around the world, towards which the European Union has demonstrated a lack of political power. This is particularly true in Africa.
One year after Andry Rajoelina illegally seized power, the large island of Madagascar seems to be slipping deeper and deeper into a social, economic and financial crisis which its people did not need.
In fact, this country has become one of the poorest countries in the world, with the large majority of the population there living on less than a dollar a day. Human rights violations are increasing. Religious leaders, parliamentarians, journalists and leaders of civil society are subject to intimidation and harassment and are being arrested and thrown into prison.
The international community, however, has been sparing in its efforts, refusing to recognise that this is in fact a coup d'état and that the government put in place by Andry Rajoelina in Madagascar is in fact a military government.
Madagascar has been suspended from the African Union and the Southern Africa Development Community. Since 2 February 2009, numerous attempts have been made, including by the UN and the EU, resulting in the Maputo and Addis Ababa agreements. However, since November 2009, these agreements seem to have become mired down as a result of the divisions between the various protagonists and the refusal by some of them to participate in the implementation of these agreements.
We in the Confederal Group of the European United Left - Nordic Green Left consider that it is time to let the Malagasy people speak and that it is high time that democratic rules were respected.
Andry Rajoelina, the strongman of the regime, prefers to organise his elections unilaterally, without consulting the Malagasy people, in defiance of the aforementioned agreements. He unilaterally set an initial date for so-called democratic elections in March 2010, but now appears to be talking about a date somewhere between the end of March and the end of 2010.
That is why we want humanitarian aid to be strengthened, for judicial proceedings to be instituted and for the European Union to throw all its weight behind ensuring that civil society is involved in the steps taken.
Charles Tannock
author. - Mr President, if the African Union aspires to have anything like the authority and respect accorded to the EU in international affairs, then Madagascar is surely a case in which the AU should act decisively. Instead we have seen the usual vacillation and tepid diplomacy following the fall of President Marc Ravalomanana, which is sadly reminiscent of the situation in Zimbabwe. It is time for the African Union to accept its responsibilities with regard to Madagascar, where political tension and chaos have been endemic for some time. If the AU cannot bring itself to sort out this mess, then it is reasonably fair to ask why the EU should do so.
However, we should continue to remain engaged with Madagascar in order to facilitate a smooth return to democratic government and to promote reconciliation. It is vital that those politicians and military officers who have been cited and carried out human rights abuses should be brought to justice. Targeted sanctions against the illegitimate regime of Andry Rajoelina also offer an effective way to punish those who perpetrate the ongoing instability without harming the overwhelming majority of the Malagasy people, who must be heartedly sick of the tensions and sporadic violence in their beautiful country.
Cristian Dan Preda
As has already been emphasised, the state of uncertainty and political instability reigning in Madagascar has been going on for well over a year. While there have been some glimmers of hope at times during the negotiation process, the actions being taken by Andry Rajoelina only serve to hamper the process, complicating the restoration of constitutional order.
I am referring here to the removal of the prime minister appointed after the Maputo Accords, the withdrawal from the negotiation process with the political groupings and the recent decision to hastily organise elections without taking into account previous agreements.
I believe that this is an attempt to create a veneer of legality and legitimise a regime which has come to power following a coup d'état, which Rajoelina cannot deny. It is obvious that the only way of ensuring that constitutional order is restored is to fully enforce the Maputo and Addis Ababa Accords.
Martin Kastler
(DE) Mr President, I would just like to draw your attention to the fact that all the groups have endorsed this motion for a resolution. That is as it should be, because this topic is very important. In contrast to the previous speakers, I would like to say that we must ensure that we do not merely promote freedom of expression and freedom of the press in this country, but that we also actively demand them, now that we are examining ways that we could help things proceed towards a, hopefully, peaceful election. We have to ensure that we, as Europeans, establish freedom of the press in all areas, with all the financial assistance that is needed to make that possible. We also have to provide full support and endeavour to act together to provide financial assistance, within the scope of the agreements which we have with this country.
Eija-Riitta Korhola
(FI) Mr President, it is intolerable to follow the situation in Madagascar, where power is in the hands of a person who took over the country using violent means and who rules it in the same brutal manner, and whose position the international community has not recognised. That is why I am using the word 'person' and not 'president'.
The majority of the population in Madagascar live below the poverty line: 7 000 children are suffering from serious malnutrition, and the situation is only worsening with the political crisis. For that reason, it is important that we, along with the rest of the international community, increase the amount of humanitarian aid to Madagascar.
It is, furthermore, vitally important to investigate and solve the political murders that have taken place, and that must be left to an independent, impartial agency. Unless that happens, it will be difficult to build trust and take steps towards democracy.
It must be a priority that Madagascar's four political factions can sit down at the negotiating table to agree on what to do to enable democratic elections to take place this year. It is also crucial that Madagascar does not conclude agreements on natural resources before it has a government with a mandate from the people.
Michael Gahler
(DE) Mr President, on the subject of Madagascar, it is good that we can report that it is not just the European Union that is concerned about this country's compliance with Article 96 of The Cotonou Agreement, but that the African Union and SADC, as regional organisations, have also taken the position that another coup d'état in Africa is unacceptable. For the African Union and for the regional organisations, it is a relatively new thing, not only to make these kinds of decisions, but also to implement them and to take action.
I hope that when the International Contact Group meets again in Addis Ababa, a week today, on 18 February, all the participating parties will fulfil their tasks and powers, and ensure that any agreement reached in Maputo is also implemented. That is my appeal to all the participants.
Viviane Reding
Mr President, may I start by highlighting our very great concern about the obstacles which are preventing the Maputo agreements from being implemented.
Since the crisis started and since consultations with Madagascar were opened under Article 96 of the Cotonou Agreement, the Commission has actively supported mediation efforts by the international community, which have translated into considerable progress but which, unfortunately, have still not resulted in an effective transition process. We are very worried because, rather than making progress, we are slipping backwards and there is a clear risk of returning to where we started in March 2009.
You will agree that this may of course result in a deterioration in the political and human rights situation and in clashes between Malagasies. We have clearly indicated, on numerous occasions, that we reject any unilateral process which results in hastily organised elections that will not bring about a lasting solution to the crisis.
Therefore, to reply to the question raised by the honourable Member, I would note that we are not prepared to support such a process either politically or financially.
The initiative currently being taken by the President of the African Union Commission is our last hope. We are prepared to evaluate, together with the international community within an international contact group, the response of Malagasy movements and, depending on the situation, to present proposals for decisions to the Council under Article 96 of the Cotonou Agreement.
In the event of a negative decision, this should not affect projects which directly benefit the population and we shall continue and, if necessary, increase humanitarian aid for the vulnerable populations.
Finally, may I assure you, Mr President, of the Commission's active, patient and persevering commitment to finding an amicable way out of the crisis.
President
The debate is closed. The vote will take place at the end of the debate.