Spain dreams of 'economic government' in Europe

Spain plans to use its EU presidency to push for a form of European economic government, with the promise of rewards for members who meet binding targets - and the threat of sanctions for those that don't.

The Spanish government intends to introduce the initiative at an EU summit in Brussels on February 11 which will focus on ways to revive sluggish growth, Prime Minister José Luis Rodriguez Zapatero told reporters on Thursday.

In doing so, Madrid is clearly posting its desire to play a leading role in European affairs despite the new leadership dynamic created by the Lisbon reform treaty, under which Belgium's Herman van Rompuy has become the European Union's first permanent president.
Spain hopes the EU can agree on a replacement for the bloc's long-term growth strategy known as the Lisbon Agenda, which was supposed to make it the world's most competitive economy by 2010 but which did not achieved its aims because governments were under no obligation to conform.

Spain, which began its six-month EU presidency stint on January 1, now plans to learn from that failure and introduce a new 10-year growth strategy.

"It is vital to have a new kind of strategy for 2020, to make it more efficient," said Zapatero.

The new 2020 plan "must include incentive measures, and corrective measures" for states that fail to fall into line, he said.

He mentioned information technology and energy as sectors where this could be applied.

Spain's secretary of state for European affairs, Diego Lopez Garrido, said the idea would be to reward countries with EU aid when they meet the binding targets, and to sanction those that do not.



That would imply that the EU would have the right to oversee national budgetary priorities, in addition to the existing stability pact, which imposes limits on public deficits for eurozone members.

But Spain risks crossing Britain and other countries with more liberal economies, which fear a loss of sovereignty on economic issues.

"But I know that a certain number of countries back greater economic unity, France for example," Zapatero said.

Paris for some years has pushed for an "economic government", at least within those nations that share the euro single currency, despite resistance from Germany which sees it as a threat to the independence of the European Central Bank on interest rates.

France floated such a plan in late 2008, at the height of the financial crisis. Now Zapatero wants to pick up the baton. "The idea is still on the table," he said.
Spain assumed the EU presidency from Sweden at the start of the year and will oversee the first six-month stint whereby the system of a rotating presidency sits alongside Van Rompuy in his new post as president of the European Council.

Source:telegraph.co.uk/