07 May, 2019
Resolution of the UEF Federal Committee "The creation of a genuine Eurozone budget"
Adopted by the UEF Federal Committee, 28 April 2019, Barcelona

The Federal Committee of the Union of European Federalists, gathering in Barcelona in April 27-28

  1. recalling that the Euro is the common currency of the European Union and all Member States agreed to introduce the Euro when they fulfil the Treaty conditions;
  2. underlining that the creation of a genuine European fiscal sovereignty is necessary to ensure the stability of the euro area as a whole and the survival of the single currency in the long run;
  3. reminding the importance that fiscal integration played in modern history in the construction of federal states;
  4. stressing that the Euro area is still exposed to major risks coming from both some lasting macroeconomic imbalances in the member states, the incompleteness of the banking union, as well as the lack of effective European mechanisms to foster convergence and absorb economic shocks;
  5. aware that lower growth rates as anticipated by the recent Eurozone economic forecasts of the IMF might bring to the surface underlying systemic risks;
  6. aware that the exports-driven growth model of some Member States is unsustainable, particularly  so in a global environment of rising international trade tensions, and can lead to generalised slowing growth through negative spillover effects;
  7. : aware that lower growth rates are particularly dangerous in the context of a sustained period of unconventional monetary policies and low inflation;
  8. noting that deep financial and economic crises, and the high social costs they result in, can create a climate of political and social unrest, leading to serious risks for democracy and the rule of law within the European Union;
  9. welcomes the decision of the Euro summit on the 14th of December 2018 to support the Franco German proposal for the creation of a Eurozone budget and commit the Euro group to develop a detailed project on the matter by June 2019 hence ending a political deadlock that has blocked all reforms for years;
  10. takes note that during the last meeting of March 2019, the Eurogroup has agreed only on a minimal development of the project, in terms of size, mandate and democratic accountability;
  11. calls on the governments of the euro area and the institutions of the EU to take into consideration instead the following priorities for the finalisation of the Eurozone budget:
  1. the new instrument should be tasked with fostering stability in the euro area by ensuring convergence of economic cycles between national economies for example through the introduction of a European Unemployment Reinsurance Scheme and exploit the full economic potential of the currency union avoiding any duplication to existing funds (InvestEU, cohesion funds etc.);
  2. more precisely, the new budget should both foster convergence of economic cycles and competiveness through conditional grants and fulfil a stabilisation function in order to absorb the economic shocks, which periodically affect the Member States;
  3. for this reason, the budget should be sizeable enough to have macro-economic effects (i.e. be multiples of the current European Union budget)
  4.  while the conferral of national contributions may be a solution for the rapid setup of the budget, the latter should be entirely financed as soon as possible by genuine European resources (i.e. Financial Transaction Tax; Digital Tax, Pollution Charge; common corporate tax);
  5. despite being consistent with the EU institutional framework and community acquis, the new instrument should focus specifically on the euro area: accordingly, the procedures regulating the new mechanism shall not demand the unanimity vote within the European Council and Council of Ministers;
  6. the Members of the European Parliament elected in Member States which have adopted the single currency should be fully involved in the functioning of the new budgetary instrument by voting on its annual adoption and defining its strategic priorities;
  1. highlights that, in the event one or more Member States disagreeing with the former conditions for the finalisation of the Eurozone budget, the latter should be first established through a temporary agreement between the governments willing to participate and then incorporated in EU law in the framework of a wider reform of the European Treaties;

consequently, regardless the implementation of the budgetary instrument either within or outside the EU Treaties, a European conference for the re-foundation of the European Union shall be called in due time in order to discuss the future institutional developments of the Eurozone governance and the creation of a genuine fiscal sovereignty.

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