Since the financial and euro crises, the EU has worked continuously to improve the stability of the Economic and Monetary Union. The fiscal capacity and automatic stabilisers in the EMU are about addressing and adapting to asymmetric shocks in the Monetary Union and Single Market.The opinion emphasises that despite the improvements in EMU governance and the financial sector, the mere coordination of national fiscal policies has not enhanced the national capacity to absorb economic shocks – nor prevented the emergence of an investment gap. Moreover, the existing policies have proved insufficient to trigger growth-enhancing, sustainable and socially balanced structural reforms. Local and regional authorities should be more involved in the EMU governance as they are often responsible for the implementation policies to asymmetric economic shocks.

The CoR opinion rightly emphasises on conditionality and compliance with the Stability and Growth Pact. Regional and local authorities have a crucial role in contributing to sustainable structural reforms and fiscal consolidation in order to foster competitiveness, stability and growth in Europe. To point to the national and regional ownership is therefore the right thing to do. The EPP priority is to strengthen the credibility in applying the existing economic governance and to avoid further politicizing of the system. This includes maintaining the institutional and political independence of the ESM and its firepower. Any fiscal capacity would have to aim at supporting reforms in the Member States and be linked to the Structural Reform Support Programme.

Burkhard Balz
Member of the European Parliamrnt and EPP Group's ECON Committee Coordinator

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