For outgoing ALDE leader - and Parliament president hopeful - Graham Watson, the European Parliament needs to take the lead on coordinating member states’ responses to the recession. He has separately called for the establishment of a temporary committee on the financial crisis, which would take much the same form as the erstwhile climate change body chaired by Italian Socialist Guido Sacconi, as well as a convention on the future of European financial architecture, possibly chaired by former Internal Market Commissioner Mario Monti, he told Europolitics.Of course, these are simply ideas, and will depend largely on whether Watson makes it to Parliament’s top post.

Any economic decisions made by the next Parliament will also be coloured by which political groups receive the relevant committee chairs and reports. With the Socialists losing 6% of their vote in the June elections, according to sources within the party it is unlikely they will retain leadership of the Committee on Economic and Monetary Affairs, which French MEP Pervenche Berès has steered through the worst of the economic crisis. It means a centre or centre-right MEP will probably be in charge after the July Strasbourg session, when the group and committee formations should be settled.

A recent European Commission document for approval by the June European Council commended member states for putting in place a coordinated fiscal stimulus amounting to around €600 billion or 5% of the bloc’s GDP (a figure that includes automatic stabilisers, such as increased unemployment benefit). However, the general consensus continues to be that national measures have been essentially fragmented. Among the 27 member states are the big spenders - the UK, Germany and France - and those not able to afford discretionary stimulus packages - Latvia, Romania and Hungary - which have had to be bailed out by the EU and the International Monetary Fund.

The Commission estimates that of the 1.8% of EU GDP that adds up to extra crisis spending, a quarter is going on job creation, retraining and temporary short-time working arrangements to avoid redundancies, half on supporting the unemployed and poorer households, and a quarter on long-term measures, such as ‘greening’ the economy, overhauling infrastructure and R&D spending (which, with the EU’s €5 billion contribution to energy projects, should amount to €100 billion).

But more needs to be done on jobs, infrastructure, companies and climate change. On jobs, the recovery plan advocates shorter working hours as an alternative to redundancy, and puts the focus on training for the unemployed. On the companies’ front, making sure the business environment is simple and inexpensive for SMEs, and also getting on with major infrastructural projects, such as smart grids and road building, are at the top of the agenda. For a ‘greener’, more innovative economy, car scrappage schemes, increasing high-speed internet access and sustaining R&D budgets are the way out of recession.

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