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MEPs vote for FTT and Eurobonds

Monday 30 May 2011 - by Nicola York

The European Parliament's Financial Crisis Committee has voted to investigate the introduction of eurobonds and a financial transaction tax in a draft resolution on Monday.

The final report on the causes of the financial crisis drafted by MEP Pervenche Berès was approved by 32 votes in favour with nine against and called for the European Commission to look into a future system of eurobonds.

Eurobonds have been mooted by several high profile MEPs recently, including UK MEP and Economic and Monetary Affairs Committee chair Sharon Bowles who floated her own "Bowles' Bonds" as an idea back in January.

The MEPs are also asking the Commission to develop the concept of a European Treasury, transform the European Financial Stabilisation Mechanism into a European Debt Agency, and propose that revenues from an FTT could be used for financing the Millennium Development Goals.

The non-legislative report says that a shift of spending from national to EU level is needed in order to tackle the public debt crisis and increase the EU's solidarity and competitiveness. Areas such as energy and transport are cited as examples where spending at an EU levels would cut costs by generating economies of scale.



The report also proposes increasing the EU budget after 2020 to 5 to 10 per cent of EU gross domestic product. This would be derived in part from shifting a larger share of the EU member states' spending to EU level. The MEPs said these plans should not lead to an increase in taxes.

Group coordinator of the Cris Committee Othmar Karas MEP says: "Most reactions to the crisis have been mere trouble-shooting or curing of the symptoms only.

"The origin of many problems is in the architecture of the world financial and monetary systems, in the way we deal with public debts, the lack of European approaches and in the half-heartedness of EU economic governance. If we do not dare to raise fundamental questions, any reaction to the crisis is in vain."

The report will form the basis for the recommendation of the European Parliament to the European Commission and member states on measures to respond to the crisis and to prevent similar crises in the future.

The Berès report is scheduled for a plenary vote in July.

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Email: nicola.york@gfsnews.com


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