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On Wednesday, 4 February, the chairpersons of the Saeima committees who moderated the discussions of a high-level conference on economic and financial governance at the European Parliament emphasised that EU member states and institutions must find sustainable solutions to problems facing the European economy. 

Kārlis Šadurskis, Chairman of the Budget and Finance (Taxation) Committee, co-chaired the session devoted to fiscal consolidation and structural reforms while Aija Barča, Chairperson of the Social and Employment Matters Committee, moderated the session on strengthening the social dimension of the European Monetary Union. 

In his address on fiscal consolidation and structural reforms, Kārlis Šadurskis emphasised that implementation of relevant measures is not a goal in itself but a prerequisite enabling EU enterprises to compete globally. Investments and growth will be facilitated if, concurrently with reforms, a smart and target-oriented support programme is implemented. 

Chairman Šadurskis compared consolidation and structural reforms to planning a household budget. In order to afford a vacation in an exotic locale or to ensure a care-free retirement, one must curb his/her spending, find a well-paying job and avoid taking overpriced loans. Insurance and savings are also advisable. The same applies to countries - in the long term, they have to assess the feasibility of public expenditures and facilitate growth in high-yield sectors. 

Recent fiscal and structural reforms in Greece indicate that although this is a difficult path, it will lead to sustainable results. However, sustainability is a fragile construct when it comes to making hard decisions, said Šadurskis. 

Although Latvia’s reform experience as a small and open economy might not seem attractive to all EU member states, there is still much that we can learn from each other, emphasised Kārlis Šadurskis.

While chairing the session on the social dimension of economic governance, Aija Barča stressed that as we focus on growth, we must also ensure that it is inclusive and sustainable. The Great Recession showed that the lack of one of these elements can affect individuals and the economy at large, undermining the very foundation of society and, in some cases, leading to social unrest.  

In order to ensure an inclusive labour market and reduce poverty, as well as stimulate greater public involvement and investments in human capital, adequate, effective and sustainable social protection systems, as well as properly functioning employment services, are required, stated the Chairperson of the Social and Employment Matters Committee. 

When sharing Latvia’s experience in overcoming the economic crisis, Aija Barča admitted that structural reforms played a significant role in improving the medium- and long-term potential of the national economy. Regardless of the negative short-term social impact of the change, an effective social safety net helps to overcome the negative consequences of reforms and protects the most vulnerable social groups. 

Chairperson Barča underlined the importance of fiscal discipline and emphasised that it is crucial to distinguish between expenditures that are priorities and those that can slow down development: “We must also take into account the impact that our budget policies will have on Europe as a whole because, as a result of our interdependence, measures taken by one state can affect the other states.”

The Chairperson emphasised that a broader discussion addressing inclusive employment will take place during the Meeting of the Chairpersons of the Committees on Employment and Social Affairs that will take place on 22–23 February at the Saeima. 

The fourth Interparliamentary Conference under Article 13 of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union was attended by members of EU national parliaments and the European Parliament, as well as the highest officials of the EU. It was jointly organised by the Saeima as a parliament of the country presiding over the Council of the European Union in collaboration with the European Parliament. It was also one of six events organised by the Saeima in the framework of the parliamentary dimension of the Latvian Presidency of the Council of the EU.

Saeima Press Service