The Prime Ministers of the Party of European Socialists (PES) will use today’s European Council meeting to call for a more balanced system of Economic Governance. We call on the European Council to deliver a more balanced economic message than simply ‘austerity, cuts and sanctions’. We need greater budgetary discipline but also measures and instruments to promote jobs and growth. Our reaction comes as the Economic Governance Task Force, chaired by the European Council President, Herman Van Rompuy, tabled its final report to the European Council meeting.

The suspension of voting rights for member states breaching the rules is not acceptable. To disenfranchise countries that are already suffering from a lack of EU coordination would be a wrong direction for Europe.

Important elements are missing from the economic governance plans:

· A monitoring system for employment and social levels (as key indicators of economic strength).

· A commitment to push for an EU financial transaction tax, bank levies and to seriously explore the idea of Eurobonds.

·  An alternative to the proposal to withhold EU structural funds from Member States who infringe budget guidelines.

· Greater coordination on EU Economic proposals with EU and Employment Ministers.

· A clear commitment to a permanent crisis and debt-management mechanism.

We the PES Prime Ministers will draw the European Council’s attention to the urgent political context in which these economic governance plans are being decided.

· European unemployment levels are reaching crisis level across the continent. Youth unemployment patterns are becoming a structural issue.

· The damage of welfare state reduction is beginning to be experienced.

· This will damage the image of Europe. For its citizens, the European Union will be perceived as a machine destroying jobs and undermining our welfare systems.

· Social clauses of the EU Treaty, such as the charter of fundamental rights, remain under-utilised, dormant or ignored.

· Europe remains the only major trading bloc that is tied to an ‘austerity only’ approach.

· Extreme Right Parties are exploiting the sense of economic insecurity.

· Mainstream Conservative parties are sending ambiguous messages regarding these parties.

· The European Union fails to lead at International fora such as G20 or the Cancun Climate Change Conference.

Speaking on behalf of the Prime Ministers, PES President Poul Nyrup Rasmussen stated that; “there are too many essential policy ideas missing in the Conservative approach to economic governance. This biased reform, with focus only on fiscal consolidation, promotes division between member states rather than cooperation. It is merely a blueprint for austerity. We need measures and instruments to support growth and jobs. We need means of governance that develop positive cooperation, and not just limit negative effects.”

-ends-

For further information please contact Brian Synnott on +32 474 98 96 75 (brian.synnott@pes.org)