Merkel sounds warning on EU growth strategy

Europe 2020 approved at Commission meeting, but German chancellor remains doubtful on some targets.

The European Commission’s blueprint for boosting Europe’s economic growth came under fire from Angela Merkel, Germany’s chancellor, even before it was published yesterday (3 March).

At its weekly meeting the Commission approved the Europe 2020 strategy, which sets targets for measures to improve competitiveness.

But in a pre-emptive strike, Merkel warned that Germany could sign up to only those targets that were achievable in a few years and that were agreed with Germany’s parliament and its regional governments. She said that surveillance of member states’ budgets should rest with finance ministers and should not become the duty of national government leaders.

The Commission’s proposal for a Europe 2020 strategy, which is to be discussed by national leaders at a meeting of the European Council on 25-26 March, sets out targets to improve competitiveness, including spending 3% of the EU’s gross domestic product (GDP) on research and development, increasing the proportion of people aged 20-64 in work to 75%, and keeping public deficits under 3% of GDP.

It reiterates the EU’s 2020 targets for cutting greenhouse gases and boosting the use of renewables. There are also education targets, including cutting the rate of those leaving school early to less than 10% and ensuring that 40% of all young people have a university degree or diploma. The number of people living in poverty should be cut below 20 million.

But Merkel warned against such targets in a letter to José Manuel Barroso, president of the Commission, Herman Van Rompuy, president of the European Council, and José Luis Zapatero, prime minister of Spain, which holds the rotating presidency of the EU.

Merkel said that she supported a focus on a smaller number of targets, but insisted that it had to be within governments’ power to influence these targets, and that they should be achievable within a few years.

She cautioned that her government would not sign up to any targets at an EU level that had not been agreed by the German parliament and the Länder, or regional governments. Education policy is the responsibility of the Länder.

Financial discipline

Merkel also said that she had “not agreed” to a linking of the stability and growth pact, which aims to ensure financial discipline among member states, and the Europe 2020 strategy.

The chancellor said that she did not support taking responsibility for budgetary surveillance away from finance ministers and giving it to EU leaders. This would lead to it being “unnecessarily politicised”, she wrote. She also warned that pursuing growth should not be at the expense of stability in public finances.

Presenting the strategy yesterday, Barroso said: “The bottom line is that Europe has a growth deficit that is putting our future at risk.”

Asked about Merkel’s comments, Barroso said he was not trying to merge the stability and growth pact and Europe 2020. But he said it made “no sense” not to discuss the economic situation in Europe and structural reform at the same time.

“It would be absurd if the governments of Europe decided something contradictory to the structural reforms they want to implement,” he said.

? Van Rompuy told MEPs yesterday that the European Council should combine its discussions on the stability and growth pact with those on the economic and employment guidelines agreed for Europe 2020.

“Bringing all these processes together into a global approach…could do much to improve our effectiveness,” he said.