As the debt-embattled EU prepares to deliver long-term structural reforms to restore the confidence of global investors in its growth outlook, the economic bloc will also actively seek a greater market access in the East Asia region, EU Representative to Taiwan Frederic Laplanche said recently.
On Wednesday, Laplanche sat down with reporters to talk about issues related to the European sovereign debt crisis that began near the end of 2009, days after eurozone leaders came up with measures that seek tighter integration and federal solutions to address the crisis at an EU summit held on June 28 and June 29 in Brussels.
The latest in a series of meetings of the European Council to discuss the debt crisis over the years was “particularly successful,” Laplanche said. “In my view, we are getting to a very strong response to the crisis. It’s a historical moment.”
European leaders decided not only to try and see whether the union can manage the banking system at an EU level, but also have plans for forging a fiscal and economic union, as well as plans for a political union, Laplanche said.
“So it’s four elements, four avenues of reinforcement for the European integration ... From this point of view, I think it’s the most integrated decisionmaking moment we had in the past two years,” he said.
Laplanche said that the EU is now “at the level of what is expected” to resolve the debt crisis, adding that it has managed to “bring all 27 member states together on this very clear framework.”
At the summit, the eurozone leaders agreed to set up a supervisory system for EU banks, with four decisionmakers led by European Council President Herman Van Rompuy, working out details before October for the EU to make a final binding decision on it by the end of this year.
The decision on banking is trying to transfer the management and supervision of EU banks to the EU, instead of being done by member states, he said.
“Apart from that, we will be able, once the system of supervision is in place, to provide financial support and funding to banks which are in trouble directly from the European Stability Mechanism,” Laplanche said.
The EU has acknowledged that there was “a flaw in the original architecture of the European monetary union” and “a problem with a lot of integration of the monetary side, but not enough on the economic and fiscal side,” he added.
“What we are trying to do now is to bridge that gap and to correct the original flaw in the design back in 1999,” Laplanche said. “This is a really high-level answer to the deep crisis we are facing at the moment.”
By moving toward a fiscal union — based on the adoption of the European Fiscal Compact in March, which is pending ratification by some member states — the EU will be mandated to supervise national budgets to make sure they achieve fiscal balance, he said.
Regarding economic union, the EU has been able to try to put all member states’ economic policy on the same track with the “European semester,” the mechanism that reviews each member state’s economic policy on more than 20 elements and makes recommendations, Laplanche said.
What was added to the economic front was the approval of a growth package worth 120 billion euros (US$147.44 billion), he said.
The fund, about 1 percent of the EU’s GDP, is expected to boost 180 billion euros in investment in technology, infrastructure and in transport, he said.