ECR group calls for re-establishing the no-bail-out-clause
Following a proposal by the AfD-Chairman Bernd Lucke and in light of the upcoming Four-Presidents-Report, the ECR Group adopted a common position paper on the future of the European Monetary Union. Considering the fact that all fiscal rules (set in the Treaty of Maastricht and the Stability and Growth Pact) have never been enforced, the group calls for re-establishing the no-bail-out-clause. This is the only incentive compatible mechanism to guarantee national responsibility for economic and fiscal policy.
ECR position on Economic Governance
• Since 1999 Economic Governance in the Eurozone has failed on a large scale.
• Rules moved from simple to very complicated without much effect.
• The current system is overly complex and as far as we can see the latest reforms, namely the 6+2 pact, will also be unsuccessful (e.g. France).
• The only self-enforcing rule with respect to fiscal discipline is the no bail-out principle.
• With safeguards for financial stability now in place or in the process of being implemented, we should simplify the current system of Economic Governance and gradually reinforce the no bail-out principle and re-establish national sovereignty in fiscal and economic policy and national responsibility for sovereign debt.
• The ECR opposes any blurring of competences of different institutions such as the Eurogroup and the Commission (chair of the Eurogroup should not be attributed to a Commissioner) or the Council and the European Parliament (e.g. the ESM is accountable to the respective contributors not to the European Parliament). Only a clear division of competences and interests allows for proper checks and balances.
• Furthermore, also in line with preserving national sovereignty and the principle of subsidiarity, the ESM and the Fiscal Compact should not be implemented into the community framework, since this would be essentially irrevocable.
• Also, the Union has to guarantee for a proper link of risk-taking and liability in the financial sector to prevent the socialisation of losses due to “too big to fail” institutions. Regulation should ensure financial safeguards against financial crises which entail systemic risks e.g. via appropriate minimum capital requirements.