WIL Vice-president Pervenche Berès is Chairwoman of the Committee on Employment and Social Affairs of the European Parliament. Appointed as a rapporteur of the EP Special Committee on the Economic, Financial and Social Crisis, Pervenche led the efforts of the EP to establish the origins of the crisis and recommend solutions to avoid its repetition. Her report was adopted by the EP in July 2011. Some of its conclusions are highlighted in our interview with Pervenche.

Briefly, what does the report recommend so as to alleviate the effects of the financial, economic and social crisis?

The viability of the eurozone cannot be ensured by implementing all over Europe severe austerity programs which will never meet the objectives of a reduction of deficit and debt levels. It is important to conciliate fiscal responsibility and room of manoeuvre for long term investments in areas such as education, innovation, transport or energy. This would require a shift towards the European Union by ensuring an effective economic, social and fiscal convergence and a significant raise of the EU budget. A better surveillance and control of capital flows is also required in order to ensure an optimal allocation of capital in favor of the real economy and the fulfillment of legitimate macroeconomic objectives. On the political side, the current crisis has demonstrated the limits of intergovernmentalism and underlined the need for more democracy and legitimacy in the making process of the solutions designed to safeguard the viability of the eurozone and the Union as such: therefore, with this report, the European Parliament has paved the way for a forward looking solution with the need to be fully included at all relevant levels of the political decision-making process.

How would the public debt in Europe be dealt with, following the adoption of the report?

The report stresses the need to conciliate the need for responsibility by decreasing the current sovereign debt level which mainly results from the financial sector crisis, and the need for a sustainable development by safeguarding room of manoeuvre for long-term investments. In a short term perspective, the introduction of eurobonds would be the most appropriate measure designed to strengthen the integration of the European sovereign debt market and therefore to ensure the stability of the Eurozone as a whole. The European Stability Mechanism should also be transformed into a European Debt Agency with appropriate tools and human resources to tackle the crisis. Radical measures against the repeated

speculative attacks Greece and Portugal have suffered must be taken: it is time for the European Union to demonstrate the will to regulate malpractices of financial actors and to ban, among others, naked short selling.

Which recommendations are made in order to build a European energy community?

Special Crisis Committee's final report clearly states that a European energy community should be considered as one of the key political projects for the realization of the objectives included in the EU 2020 strategy which paves the way of a sustainable and social growth model. This European Energy Community would facilitate the transition of our economies towards renewable energies, increase the energy independence of the Union by giving it more power in the negotiations with third countries and will ensure the provision of universal services at affordable prices. The report recommends increasing investment including through public§private partnership in research and development, interconnection of grids. We also propose that special attention should be devoted to energy efficiency.

What public expenditure would the revenues from the tax in financial transaction cover?

The European Parliament supported in the interim report adopted in October 2010 the introduction of a financial transaction tax at the European level. Such a tax on all financial transactions with a small tax rate of 0,05% would represent a significant amount of 200 billion Euros per year for the Union and its Member States. These additional financial resources could in serve to finance the key priorities included in the EU 2020 strategy and promote European public goods in areas such as energy efficiency and smart grid development: financial needs to be invested next decade into smart Transeuropean networks amount already to € 450 billion...Furthermore, an FTT would also represent an appropriate tool for improving the functioning of financial markets by tackling high risky speculative transactions.

Can Member States be persuaded to apply these recommendations, given the growing number of eurosceptics?

The significant increase of eurosceptics - but also the revival of nationalist movements which consider themselves as europhobics - is linked to the severe economic and social consequences of the financial crisis, whose length has to be seen as a lack of political will demonstrated during the last years by European leaders. The sovereign debt crisis has clearly illustrated the "too late, too little" adopted during the last months by the German Chancellor Angela Merkel and the French President Nicolas Sarkozy. The current situation demonstrates the limits of intergovernmentalism, this is the reason why we plaid for a democratic Union with the full inclusion of the European Parliament in the discussions around the future of the eurozone and the economic governance. The Union should also speak with one voice through a single representative in international institutions in the World Bank or the IMF. Finally, it is essential for the future of the Eurozone and the Union as a whole to tackle macroeconomic imbalances by improving the integration of the European Union through the deepening of economic, social, fiscal and tax convergence. Regarding these challenges, the risk of eurosceptism cannot be ignored but the politics must say the truth: our choice is between more integration or drift apart.