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BackOn Tuesday, 22 October, the European Commission presented its Work Programme for 2014. Even though the legislative period of the Commission comes to an end next year, the Commission nevertheless has set itself a number of targets. The Work Programme clearly shows that the Commission would like a number of bills passed before the beginning of the new period. Hence, it requests that Council and European Parliament quickly conclude their negotiations concerning some specifically mentioned dossiers.
Commission demonstrates self-awareness
The Commission uses its Work Programme to give itself a pad on the back. Great progress had been made during the last 5 years, the eurozone had been stabilized successfully, a new Financial Market Supervision had at last come into effect and the Banking Union was just a matter of time. In spite of this, the Commission considers many issues still unsolved - not only in respect of climate protection, but also concerning the demographic challenge presented by an ageing population and competitiveness.
Of course, one could tell the story of these great successes in a different way. The eurozone has been in crisis for 5 years. What arrived in form of a banking crisis across the Atlantic was not least aggravated by a European Commission, which still advocates the austerity dogma prescribed by the Council. It is true that some progress has been made with regard to financial markets, but their power is as strong as ever. Whether the banking union will be successful remains to be seen. The upcoming ECB stress tests could still turn the Single Supervisory Mechanism into an expensive endeavour for the budgets of the Member States if the former reveals new failed banks.
The projects of the European Commission
Right at the top of the Commission’s list of priorities is the finalisation of the banking union with the “Single Resolution Mechanism” (SRM) and a European Deposit Guarantee Scheme. In particular the SRM has set itself the target to ensure that the costs of future bank liquidations will no longer be borne by the general public. Instead of the public sector, shareholders and creditors will in future be requested to put the hand in their pockets. And if this is not sufficient, then – as envisaged by the current proposals - a fund shall be set up, paid for by the banks themselves, which will be used to pay for the banks’ restructuring or their liquidation. However, many questions remain still open, for example, how long will it take for the fund to reach its full capacity? What will happen until then? And finally, even though the currently advised amount of about 55 billion Euros (1 % of the bank balance sheets of all banks involved) is adequate to liquidate individual institutes; in case of a systematic crisis like the last one it will once again be the public sector footing the bill. Time will tell whether Commission, Council and European Parliament will be able to achieve a result in time, which will be satisfactory from a public interest perspective.
A favourite project of the European Commission concerns the further liberalisation of rail transport. Hence, the Commission puts pressure on and demands that Council and European Parliament conclude the negotiations on the Fourth Railway Package by the end of European Parliament’s legislative period. The liberalisation package shall force Member States to put rail passenger transport for certain lines out to tender and to award the contract to the best bidder. However, significant disadvantages are to be feared for both consumers and employees – also see European Parliament: debate on Fourth Railway Liberalisation Package goes into the next round. The outcome of the negotiations might result in the fact that the public sector will remain in charge of the least profitable lines, that passengers will be confronted with a patchwork of qualitatively uncertain offers and that employees will become merely a cost factor for private rail operators.
Finally, rather ominous is also the Commission’s reference in its Communication to the further deepening of economic governance. Even though it does not mention it explicitly, there is a danger that even before the elections first decisions on the so-called competitiveness pacts shall be taken to force Member States to adopt neoliberal structural reforms.
But, and this is positive, the negotiations on the Financial Transaction Tax shall be concluded - this is at least what the Commission hopes the Council will achieve. Even if, after 5 years, the achievements of this Commission from an employees’ and consumers’ point of view are disappointing, this at least would be an important step in the right direction.
The Commission uses its Work Programme to give itself a pad on the back. Great progress had been made during the last 5 years, the eurozone had been stabilized successfully, a new Financial Market Supervision had at last come into effect and the Banking Union was just a matter of time. In spite of this, the Commission considers many issues still unsolved - not only in respect of climate protection, but also concerning the demographic challenge presented by an ageing population and competitiveness.
Of course, one could tell the story of these great successes in a different way. The eurozone has been in crisis for 5 years. What arrived in form of a banking crisis across the Atlantic was not least aggravated by a European Commission, which still advocates the austerity dogma prescribed by the Council. It is true that some progress has been made with regard to financial markets, but their power is as strong as ever. Whether the banking union will be successful remains to be seen. The upcoming ECB stress tests could still turn the Single Supervisory Mechanism into an expensive endeavour for the budgets of the Member States if the former reveals new failed banks.
The projects of the European Commission
Right at the top of the Commission’s list of priorities is the finalisation of the banking union with the “Single Resolution Mechanism” (SRM) and a European Deposit Guarantee Scheme. In particular the SRM has set itself the target to ensure that the costs of future bank liquidations will no longer be borne by the general public. Instead of the public sector, shareholders and creditors will in future be requested to put the hand in their pockets. And if this is not sufficient, then – as envisaged by the current proposals - a fund shall be set up, paid for by the banks themselves, which will be used to pay for the banks’ restructuring or their liquidation. However, many questions remain still open, for example, how long will it take for the fund to reach its full capacity? What will happen until then? And finally, even though the currently advised amount of about 55 billion Euros (1 % of the bank balance sheets of all banks involved) is adequate to liquidate individual institutes; in case of a systematic crisis like the last one it will once again be the public sector footing the bill. Time will tell whether Commission, Council and European Parliament will be able to achieve a result in time, which will be satisfactory from a public interest perspective.
A favourite project of the European Commission concerns the further liberalisation of rail transport. Hence, the Commission puts pressure on and demands that Council and European Parliament conclude the negotiations on the Fourth Railway Package by the end of European Parliament’s legislative period. The liberalisation package shall force Member States to put rail passenger transport for certain lines out to tender and to award the contract to the best bidder. However, significant disadvantages are to be feared for both consumers and employees – also see European Parliament: debate on Fourth Railway Liberalisation Package goes into the next round. The outcome of the negotiations might result in the fact that the public sector will remain in charge of the least profitable lines, that passengers will be confronted with a patchwork of qualitatively uncertain offers and that employees will become merely a cost factor for private rail operators.
Finally, rather ominous is also the Commission’s reference in its Communication to the further deepening of economic governance. Even though it does not mention it explicitly, there is a danger that even before the elections first decisions on the so-called competitiveness pacts shall be taken to force Member States to adopt neoliberal structural reforms.
But, and this is positive, the negotiations on the Financial Transaction Tax shall be concluded - this is at least what the Commission hopes the Council will achieve. Even if, after 5 years, the achievements of this Commission from an employees’ and consumers’ point of view are disappointing, this at least would be an important step in the right direction.