GOVERNANCE

The current model of governance, or the economic guideline on which the whole EU rest upon, is based on a rigid and anti-democratic economic coordination and budgetary control mechanism designed to impose a precise political agenda. This model aims to make the interest of the strongest countries and markets with no regards to the devastating effects that brings on the economy and society.

QUESTIONS

The well-known parameters of Maastricht and the whole complex system of economic governance (constituted by the Stability and Growth Pact - reinforced with the introduction of the budget balance and tighter public oversight rules - as well as the "Fiscal Compact" and the adjustment of the MES) imposed to the Member States tight constraints on public finances and fiscal policies. The treaties, as a counterpart to the membership of the Eurozone, are imposing cuts in public spending on welfare and investment and bringing over wild privatisations and devastating structural reforms. It is worth to remember that the Italian governments supported all these policies over the years.
Austerity has been imposed on the basis of public spending limits following the complex European legal framework. This legal framework incorporates the restrictions laid down in the Treaties relating to the deficit constraints. Member states have the duty of not exceeding the deficit within a limit of the 3% of the GDP and to keep the public debt below 60% of the GDP. Moreover, the "Stability and Growth Pact" and the so-called "Six Pack" and "Two Pack" regulatory packages will go further in imposing more constraints.
The "Six" and "Two" packs introduce to the Member States the obligation of the "structural budget balance" and allow the European Commission more control over the Member States public balances and economic policies. During the cycle of the European Semester, the Commission issues Country-specific recommendations based on structural reforms and austerity. In this context, the Commission decides whether to open a procedure against a country who does not respect the dogma of the "structural budget balance". In addition, the "Six Pack" contains a specific procedure for monitoring and correcting excessive macroeconomic imbalances (MIPs), with a particular attention to current account surpluses that should not exceed the 6% of the GDP. However, this procedure has never been applied to those countries that did not respect the limit set during the European Semester.
Today, a country should not be allowed to obtain a current account surplus of over 6% of the GDP for more than three consecutive years. The infringement of this limit should result in the opening of a corrective procedure leading to a penalty of the 0.1% of the GDP. Germany, like the Netherlands, has been breaching this limit for ten years in a row, accumulating over a 200 billion euro surplus per year. Germany is exploiting the current value of the euro, which is weak compared to the German's economic output, to push ahead economic policies based on deflation. By compressing its domestic demand, Germany is hurting other countries' economies and creating instability throughout the Eurozone. On the one hand, the single currency creates asymmetric effects in such a heterogeneous economic area as the Eurozone. On the other hand, Germany, thanks to its political and economic power, clearly enjoys a favourable treatment from the EU Commission compared to the weakest countries in Southern Europe, on which the rules are applied with much more rigour.
The "Fiscal Compact" is an intergovernmental agreement that, for the time being, does not explicitly fall within the European legal framework. However, in its contents, it reflects and consolidates the austerity regime imposed by EU law by strengthening the limits on deficit and public debt. The Fiscal Compact institutionalises the obligation of pursuing the structural balance (ie. not exceeding the structural deficit threshold of 0.5% of the GDP) and the obligation of reducing the public debt. The alarming problem is that this reduction should be made through an unsustainable and unrealistic pace, equal to To 1/20 per year if the debt / GDP ratio exceeds the 60%.
The MES is the so-called "state rescue fund": an intergovernmental financial organisation. It comes into operation if a member state needs to be saved (Greece, Cyprus, Spain and Portugal as examples). International investors represented in the MES will be able to lend money to a country that is in difficulty but only in exchange for the compliance with all the rules contained in the Stability and Growth Pact and the acceptance a memorandum of understanding based on a rigorous macroeconomic conditionality. In this "contract" the Troika (Commission, ECB, IMF) will be able to decide the conduct of economic and budgetary policies and lay down the foundations for the privatisation of the strategic assets of the signatory country, which will be deprived of any national sovereignty. All members of the fund will enjoy full immunity for the decisions they have taken. Moreover, an immunity on any court proceeding will be extended on the assets and funds involved in this 'contract'. Italy has already paid something like 58 billion euro to the MES since 2010, out of a total of 125 billion euro.

OUR PROPOSAL

It is necessary to define a sustainable and effective governance's framework that can facilitate the economic and social development throughout the EU that will provide a real support to the EU citizens. The Member States should have wide autonomy of manoeuvre for what concerns the most important choices about economic policies. Especially, for those policies aimed to answer different national needs based on citizens' interests. In working towards this goal, we do not deny the importance of coordination at European level; rather we aim for a model of sound and respectful cooperation between sovereign states that present deep national diversities. Of course, the cooperation will fully respect the subsidiarity principle on which the concept of European integration is based on. Coordination should focus on the real problems that cannot be tackled efficiently and adequately at a national level because of their transnational dimensions, such as the fight against the tax evasion and avoidance practised by multinationals, the fight against international financial crime and harmful financial speculations. Decisions touching people pensions, welfare system, the organisation of public services and the labour market must be brought under the control of national politics and protected from the neo-liberal logic of the Brussels technocrats.

• It is imperative to implement a rigorous spending review on public accounts through thoughtful cuts that affect waste in public spending. The aim is to free up resources for public investment, without producing any depressive effects on the economy. Besides, it is essential to achieve all the useful structural reforms aimed at improving the efficiency of the public administration, the quality of public services, the transparency and fairness of the tax system. In the face of the efforts made to reduce public money squandering and to improve public institutions' efficiency, we ask for a renegotiation of the current budgetary rules and of the European economic governance system. We need an open and honest debate, at a European level, on the future of the monetary union and its real implications for the various Eurozone economies.

• We want a clear separation of the productive public investments from the deficit's calculation. Public investments are an essential tool for the support of the economic recovery, internal demand, job creation and social equity of a country. Further, public investments are acting on the denominator of debt/GDP ratio and deficit/GDP ratio, therefore haveing the effect of improving the quality of Public finances in the long term.

• We must abandon austerity and neoliberal economic policies based on private market interests. These policies are harmful and unsustainable from an economic and social point of view. Governments should have full control over their economic policies. A decision-making process based on national and regional knowledge of specific issues will have more possibilities to revive national economies.

• We want to tackle down both tax avoidance and tax evasion, which are practices usually carried on by large multinational corporations. We will support all measures of transparency and regulation made to overlook on harmful practices. Our aim is to create a fairer tax system for the benefit of all, against the interests of few.