To ensure peace and prosperity, the EU needs a so-called “common fiscal capacity”, Fabio Panetta, the president of the Bank of Italy and a former member of the European Central Bank’s executive board, told Italy’s highest-level annual Catholic summit in the city of Rimini on Wednesday.
Every year, the northern Italian city hosts the Meeting for Friendship Among People, promoted by the Communion and Liberation Movement. This year’s meeting, which runs from Tuesday to Saturday, has the theme: “If we do not seek the essential, what are we seeking?”
Panetta, who spoke at the Rimini meeting on Tuesday, chose to focus his speech on the EU.
According to him, the EU is essential because it ensures peace and prosperity, but to ensure this, it needs reforms, starting with “a common fiscal capacity”.
In his speech, Panetta also warned against “nationalistic urges that slow down the integration process”. There should be no complacency, he said, as “the collective response to the pandemic has only slowed this trend”.
Panetta also listed challenges and weaknesses requiring the EU to “undertake far-reaching reforms and invest heavily in the coming years”.
“Among the reforms, I have already emphasised the importance of creating a common fiscal capacity, without which the current European governance – characterised by a single monetary policy and fragmented budgetary policies at the national level – remains unbalanced,” he said.
“The idea that EMU can function effectively without a centralised fiscal capacity is simply an illusion and must be overcome. A common fiscal policy would correct this imbalance and strengthen cohesion between member countries, facilitating the realisation of large-scale strategic investments,” the central bank chief added.
Panetta also recalled “the key areas to focus efforts: the dual transition – environmental and digital – and strategic sectors such as food, energy, health and defence”. These are “supranational public goods that require a coordinated approach at the European level”.
He, therefore, called for “the enlargement of the single market to sectors currently excluded, such as telecommunications and energy” and “the completion of the banking union and the realisation of a single capital market”.
He also called on Italy to implement, at best, the Next Generation EU and to reduce its public debt while implementing structural reforms to increase productivity.
(Roberto Castaldi | Euractiv.it)