11th October 2017 Helsinki University
MP Tytti Tuppurainen
Symposium on Future of EU, organized by FinUnions (SAK, STTK, YTN), European Commission and the Confederation of Finnish Industries (EK)
Timing is right to discuss the EU. Not long ago many thought the EU would collapse – we had years of financial crisis, followed by debt crisis and migration crisis. Many thought that the institutions of the EU would not work; that the currency union and the Schengen area are finished. – And if that was not enough of a nightmare, there was the incident of Brexit.
But look at where we are now. A rare window of opportunity is open – unlike what many had expected, the EU is deepening its cooperation.
The need to work together is obvious. For example deepening defence policy is of prior significance for Finland. There is an inevitable need for a common asylum policy, we need stronger climate action – let alone the importance of trade agreements considering the protectionist tendencies.
Member states, national governments, cannot accomplish these huge tasks alone. The need for an integrated approach is undeniable.
I would like to discuss two things in particular: Social Dimension and the completion of the EMU. These are crucial because they are the very essence of the EU: Our economy must do better in order for us to be able to invest in the social wellbeing of our citizens in the union.
I have three points on both these matters.
Allow me to start with the social dimension. Many fall under the illusion that EU cannot (should not) operate in this field. It’s true that the EU does not have a common policy on social security.
But there are many ways in which the EU can work. First point: The EU has to legislate wherever it has the mandate to do so. I welcome the commission proposal on the European Pillar of Social Rights. It includes many valuable initiatives such as the rights of posted workers, parental leave etc.
Second point: we need to ensure better policy coherence within the European funds. These funds must be reconsidered in the light of the social dimension: how can we better utilize the existing funds in order to achieve social investment.
Third point: EU has to practice its soft power in the framework of the European Semester. We should be able to streamline our financial policies for better social policies and wellbeing. Social indicators concerning employment, education etc. are a substantial part of the semester.
The question is of course why. What is the point of promoting social dimension? Our citizens must feel that they are not left behind. The economy is finally recovering and everybody must be attached to it.
Now let me go to the EMU. Before I start, I’d like to underline that the euro has survived amazingly well. ECB has done it’s independent work, and the currency union has been able to create means to survive the crisis. This is to say that we should not exaggerate the actions completing the EMU. Don’t fix something that is not broken.
But three points as promised about what is rational to do.
First the Banking Union. It needs to be completed including the single resolution mechanism and European deposit insurance scheme. Plans are made and ready to be put in practice. There are some preconditions of course: banks must be on the same field before we can move to the common deposit insurance system. But the idea is clear: banks and governments must be separated.
The second point is the further development of the European semester. As long as we don’t have a fully integrated common economic policy, but do have the common currency, there is the need to coordinate national decision making concerning financial policies. Yes, it is difficult, because we all want to have less bureaucracy. However, it is essential and indispensable to keep indicators to help consolidate economic policies. We should put much more effort into this issue.
Third point is the question of transforming the ESM (European Stability Mechanism) into a genuine European tool. The European Monetary Fund EMF is a very attractive and rational instrument to have. I represent the will to keep the independent board on that future institution.
On this issue I would also like touch upon an idea of having our own financial capacity on the euro area. There is not necessarily any need for a Eurozone budget – we do have the European budget – yet I should encourage us to consider having a Eurozone tool for tackling symmetrical or especially asymmetric shocks.
It should be rather small but nevertheless an instrument for a rainy day. Should we unfortunately not succeed having consolidated enough economic policies through the Semester and should we insist on having the rules (like we should) of the Growth and Stability Pact, the idea of the Eurozone stabilizer might be justified.
Again, there is the question why. Why do we need to deepen the monetary union? It is because our citizens won’t tolerate yet another financial crisis. We have seen the rise of the extreme nationalist populists. It has a connection to the financial crisis. Financial stability brings political stability.
Finally a word of encouragement. Finland and the other member states should be active and ambitious. EU is not something that is happening to us. It is something we can make work. So let’s make it work – and work today.