The European Commission today released its proposal for a line in the EU’s long-term budget dedicated to the monetary union.

The proposal suggests creating a ‘reform delivery programme’ to incentivise structural reforms, and an instrument to tackle asymmetric shocks.

PES president Sergei Stanishev said:

“Today’s proposal is an acknowledgement by the Commission of the need for the eurozone to be ultimately given a budget to safeguard itself from future crises. The PES has discussed this issue in length.

“While I welcome this positive step, I also want to make two points. First, this can only be seen as a step in a much broader process to reinforce the eurozone. No one should pretend that, with these instruments, the job is done.

“Second, we insist that the budget must be used as a tool to promote social, economic and territorial convergence — a progressive reform agenda. Under no circumstances should it promote conservative austerity or neoliberal structural reforms.

“We believe that the budget could be instrumental in strengthening public investment. In certain cases, the budget should also used to complement national unemployment schemes in case of severe economic downturns.”

Mr Stanishev added:

“We all witnessed the damaging effects of the last financial crisis. Unfortunately, the eurozone is not yet ready to face another such crisis. That’s why it’s so important to create a eurozone budget, and to deepen the economic and monetary union.

“There is no reasonable argument for continuing with the austerity agenda — it has already done enough damage to citizens’ lives. Now it’s time to rebuild trust, enabling our economies to grow in a sustainable and socially just way.”