Spain calls for a binding EU economic strategy

Spain delivered a divisive call today for more common economic policy-making across Europe, demanding a "qualitative leap" in the common economic governance of the EU, "binding" targets and penalties for laggards, and more powers for the European Commission in policing the proposed new regime. Launching Madrid's six-month rotating presidency of the EU which began on New Year's Day, Elena Salgado, the economics and finance minister, said the financial crisis and ensuing recession had wrought a seachange in European governments' attitudes to pooling economic policy-making. "The French position is very similar [to Spain's] and [is shared] also in many other countries," she said. "The EU has to reinforce the coordination of its economic policies." Herman Van Rompuy, the EU's new permanent council president, has called a special economic summit for next month in Brussels after warning in his first speech this week that much of western Europe faces the prospect of "de-industrialisation" coming out of the recession. In Madrid today he appeared to give tacit support to the Spanish pan-European drive, arguing that a series of recent events would be seen as gamechangers, spurring the EU to converge in order to compete. The "European way of life", he said, was imperilled by the prospect of protracted low structural growth, while the financial crisis and recession as well as the failure of Copenhagen climate talks had shown how the balance of global power was tilting away from Europe which had been put on the defensive. José Luis Rodriguez Zapatero, Spain's socialist prime minister, made clear that he would seek to exploit the instruments of the EU's new Lisbon Treaty to join President Nicolas Sarkozy of France in pushing for contentious Europe-wide spending, investment, and tax policies. Zapatero said he wanted next month's summit to draw up a 10-year plan for compulsory EU economic policies and that there could be sanctions or "corrective action" against member states who do not comply. While Spanish officials declined to specify exactly how and in what areas economic policy-making should converge, Salgado emphasised energy policy, saying that the EU should speak with "one voice" when negotiating energy deals with third countries such as Russia. This could mean vesting authority in the European Commission to negotiate on energy similar to the powers it enjoys in negotiating trade issues with the rest of the world on behalf of the 27 EU states. "We are convinced it is a good thing to have a European economic policy. The Lisbon Treaty allows more coordination. We should make sure to give the Commission new powers," Zapatero said. Salgado indicated that the eurogroup of the 16 EU members using the single currency could act as pioneer in forging ahead with common policies and she and the prime minister also voiced support for regular summits of the eurozone countries, an initiative first launched by Sarkozy 18 months ago and vehemently opposed by Gordon Brown. The Spanish moves would also be strongly opposed by a UK conservative government under David Cameron and similar French-led campaigning over the years has been swatted aside by Germany which fears political interference in the operations of the European Central Bank. Van Rompuy, however, indicated that events could be conspiring in the integrationists' favour and Zapatero said that a new "dialogue" should be inaugurated between the ECB and the "European Council" of national government chiefs. Earlier campaigns, such as the "Lisbon Strategy" aimed at making the EU the most competitive economy in the world by this year, had failed because commitments were merely rhetorical rather than mandatory, Zapatero said. "It is absolutely necessary for the 2020 economic strategy... to take on a new nature, a binding nature." Asked whether laggards could forfeit EU budget payments, he said: "This is something we are going to put on the table...Our main aim is to introduce a qualitative leap in our economic union by means of new common policies."