European Semester: The 2020 cycle must focus on sustainable and inclusive growth

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The EESC draws forward-looking conclusions from the 2019 Semester and the Committee's civil society consultations in the Member States

In 2020, the coordination of economic policies across the Member States must lead to averting the risk of recession and steering the EU's economy towards a path of sustainable and inclusive growth. This should include increased reform efforts, public and private investment, compliance with the Macroeconomic Imbalance Procedure (MIP), as well as a more structured civil society involvement in the semester process at European and national level, urges the European Economic and Social Committee (EESC).

The advisory body provided its policy input to the next cycle of the European Semester in two follow-up opinions, respectively on the Annual Growth Survey and on the recommendation for the economic policy of the euro area, and one information report on a series of country visits on the involvement of organised civil society in the Semester process.

The three documents were adopted at the EESC plenary session in October. They are addressed not only to the European Commission and the Council, but also to the individual Member States. They welcome further development of the European Semester in 2019, such as the new focus on investment and a larger role for social and environmental objectives. The documents also demand, however, a series of further adjustments, which could improve the European Semester, mitigate the current risks, and increase the resilience and the growth potential of the EU and the euro area economies.

One of the proposed adjustments concerns fiscal policies within the euro area. In this regard, EESC rapporteur Petr Zahradník said: The accommodative monetary policy of the European Central Bank must be accompanied by a positive aggregate fiscal stance of the euro area, while respecting the principles of fiscal discipline.

This should be accompanied by other important measures within the next European Semester cycle that:

  • Encourage effective structural reforms through well targeted investment strategies;
  • Focus equally on social, environmental, macroeconomic and fiscal goals (the scoreboards must be developed accordingly);
  • Foster further public and private investment;
  • Address the low MIP compliance of Member States.

With regard to reform and investment strategies, the EESC welcomes the proposal for a Budgetary Instrument for Convergence and Competitiveness and its close link to the Reform Support Programme. The Committee demands, however, that sufficient resources for an adequate financing of these instruments be ensured under the next Multiannual Financial Framework for the EU. At the same time, the Committee underlines the unique importance of private investment and believes that a swift completion of the Banking Union and the Capital Markets Union could help accelerate private investment and channel it to where it is most needed.

More investment will improve the competitiveness of European businesses and reduce differences between regions and countries, says the EESC. Productive investment and investment in social infrastructure would be crucial in order to support sustainable growth. Investment would also be needed to enable the implementation of the Social Pillar to prevent an increase in inequalities. Taxation should favour this type of investment.

On MIP compliance, EESC rapporteur Anne Demelenne said: For the sake of economic and political stability in the European Union and the euro area, it is essential that countries with current‑account surpluses fulfil their commitments.

Finally, the EESC repeats its call for enhanced civil society involvement in the Semester. The Committee is convinced that this could lead to stronger commitment to and ownership of reforms at national level; thus to a more effective and sustainable exercise.

Rapporteur Anne Demelenne calls in her opinion for the introduction of minimum standards for the consultation of the national social partners by national governments at various stages during the European Semester.

The EESC information report on a series of civil society consultations in the Member States goes even further. It demands that Country Specific Recommendations (CSRs) encourage Member States to consult with civil society as a whole and to set out the consultation procedure to improve the current level of information on EU economic governance in some of them.

Rapporteur Reine-Claude Mader said: National governments have to ensure that civil society organisations have the means and competences to engage in meaningful high-level dialogue. They should establish structures, like a national Economic and Social Council, to facilitate dialogue at national level.

The EESC recommends that an annual consultation on civil society be organised under its aegis in each Member State and at EU level. This would allow the Committee to fulfil its role as civil society representative and to contribute to a better civil society involvement in the Semester.

Background

The EESC follow-up opinions on the Annual Growth Survey and on the recommendation for the economic policy of the euro area provide the European civil society contribution to the upcoming Autumn Semester Package of the European Commission and the ensuing inter-institutional discussions. The opinions are based on the experience from the 2019 European Semester and previous EESC work on the subject, the current economic situation and the outlook for the euro area and the European Union. The EESC information report draws from civil society consultations in 12 Member States conducted by the Committee between 2018 and 2019.