Completing the Economic and Monetary Union: what it means for Belgium

The conference provided the opportunity for a full day of reflections and debates on the EMU reform agenda laid out in the Five Presidents' Report.

In his opening address, EC Vice-President Dombrovskis underlined that much has been done since the outbreak of the crisis to strengthen European economic governance, referring among others to the reinforced European Semester of economic policy coordination and the creation of the Banking Union. Despite the progress that has been made, however, the Economic and Monetary Union (EMU) remains incomplete according to the Vice-President. In line with the Five Presidents' Report, he argued for further progress on four fronts: towards a genuine Economic Union that ensures each national economy has the structural features to prosper within the Monetary Union; a Financial Union that guarantees the integrity of the euro and increases risk-sharing with the private sector; a Fiscal Union that delivers fiscal sustainability and stabilisation in times of crisis; and a Political Union that ensures genuine democratic accountability and institutional strengthening.

In his keynote speech, Belgian Minister for Foreign and European affairs Didier Reynders underlined the need to be ambitious when taking forward the Five Presidents' reform agenda and pleaded for a shift from the current rules-based approach to economic policy coordination towards more joint decision making and stronger institutions at the EU-level, "including one day - maybe - a European Finance Minister". He also stressed that it should be possible to go beyond the current level of policy coordination with a subset of countries "without being held back by non-euro area members." According to the Belgian Minister, completing the EMU will inevitably require further transfers of policy competences to the EU, "including in the areas of fiscal policy as well as tax and social policies."

During the plenary debate, professors Vandenbroucke (University of Amsterdam), Sapir (Bruegel), Begg (LSE) and dr. Alcidi (CEPS) all agreed that the Five Presidents valued realism over ambition when drafting their report. According to dr. Alcidi, "that is not necessarily a bad thing given the context of increased economic divergence within the euro area and a low appetite for further economic and/or political integration in a number of key Member States."

Professor Vandenbroucke argued that a basic consensus on the overall objectives and standards of a shared European social model will be required in the near future if the Members States of the euro area are to accept increased public risk sharing and solidarity. With regard to the recent Commission proposal to set-up National Competitiveness Boards, both he and professor Sapir agreed that more convergence between Member States in terms of their external competitiveness is crucial and that it makes sense therefore to inform the wage setting process in euro area Member States with competitiveness considerations. Vandenbroucke therefore pleaded with the social partners to keep an open mind about the Commission's proposal. Conversely, he pleaded with the Commission to let go of its unfounded bias towards decentralised wage bargaining and underlined that coordinated wage bargaining systems have delivered positive results.