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Euro area economic policy 2018


Key points:


  • welcomes the emphasis on sustainable and inclusive growth, resilience and convergence as policy objectives for the euro area;
  • notes that although economic recovery in the euro area has gathered pace since last year, it remains incomplete and atypical, with significant labour market slack, investment below 2008 levels and a persistent current account surplus of the euro area with the rest of the world;
  • acknowledges that high public and private debt levels in the euro area make its economy vulnerable and accepts the need to reduce them;
  • disagrees with the European Commission's proposal for an overall broadly neutral fiscal stance and instead proposes a positive fiscal stance of around 0.5% of GDP;
  • recommends that in applying the fiscal rules, the European Commission should exclude public expenditure on investment from the calculations on budget balances;
  • welcomes structural reforms that will not only increase productivity and growth potential, improve the business environment and support investment, but also support the creation of quality jobs and reduce inequality;
  • considers it a priority that the Member States implement effective measures against tax avoidance, tax fraud, money laundering and the illicit activities of tax havens;
  • supports the necessary steps for deepening the EMU, most notably completing the Banking Union, including the establishment of a European Deposit Insurance Scheme, the backstop for the Single Resolution Fund and the strengthening of the European supervisory framework;
  • reiterates its view that the euro is the currency of the whole EU and emphasises the need to:
  • create a fiscal union;
  • strengthen Member States' responsibility for and ownership of obligations vis-à-vis EMU;
  • introduce structural reforms within the European Semester platform;
  • strengthen economic coordination and governance, and create a European Monetary Fund;
  • improve the system of financial intermediation, leading to the reinforcement of real long-term investment by optimising the role of the EIB, EIF and EFSI 2.0;
  • make the EMU more resilient so that it can exert greater influence in the world.