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Opinion | Reforming the eurozone

The euro zone faces serious challenges. The crisis has reminded us of the problems of competitiveness and convergence. But, in addition, it has been evident the absence of an instrument for the management of economic cycles. The Governments of France and Germany have made a proposal for the creation of a budget in the eurozone to boost competitiveness and cohesion, which has unique characteristics in a monetary union, and to allow them to manage the cycle. This proposal is bound to the regulations made by the Commission, which are in legislative process. The Commission advocates the creation of a stabilizing function of the investment. Through an intergovernmental agreement creating a fund formed by contributions of the States similar to the benefits of the ECB, each of them receives. This fund subvencionaría the interests of a few credits, provided by the Commission with the budget as an endorsement and granted automatically to countries in crisis, to maintain the investment. There would be No conditionality ex post, but the observation ex-ante of the recommendations of the Commission of the european semester.

This proposal would provide coverage to the idea of franco-German who also bet on the creation of a fund with contributions from the States and own resources to create such a budget. In any case, the fund should not only provide loans to States, as proposed by the Commission, Mottobet whose function anti-roll is very light to the extent that only mutualiza the payment of interest, but should have the ability to manage demand directly. But this is also not clearly presented in the proposed franco-German, whose governance intergovernmental, with independence of democratic control, does not allow a global management of the euro area. Thus, it enables almost exclusively an instrument to complement the investment in competitiveness and convergence, but has low stabilizing effects.

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The socialists in the Parliament, we have revised the proposal from the Commission to allow such funding to support the unemployment insurance national. It is an option more agile as an automatic stabilizer and more visible to citizens. Also the Government of Pedro Sanchez is pushing for in the Council this reorientation. In turn, taking advantage of the revision of the European Fund for Strategic Investments, the plan Juncker, from the Parliament we are trying to keep your ability to counter-cyclically modulating annually the use of the guarantee in the support projects of investment and the multiplier average of all of them.

The eurozone needs a stabilizer that is not powerful in the proposal of the Commission, nor transparent and manageable in the franco-German. Both can and should be found, and the socialists are trying to articulate them with a special accent on that unemployment insurance.
european elections next may arise as a confrontation between the democrats and the threats totalitarian, but also the socialists, we must emphasize our identity, solidified around the pursuit of growth and job creation, and the emergence of the social pillar, which can be powered with this support to the unemployed as a tool of counter-cyclical central.

Jonás Fernández is a member of the European Parliament for the PSOE.

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