Euro area economic policy 2020 (additional opinion)

Key points:

The EESC

• notes that the exogenous symmetric shock caused by COVID-19 is deeply affecting the euro area economy;
• believes that completing the single market and ensuring it is fully functional should remain one of the top priorities, which includes the 20 principles of the European Pillar of Social Rights;
• calls for solidarity between euro area Member States and between citizens to reduce income and wealth inequalities, taking into consideration the impact of the crisis on disadvantaged groups;
• believes that the EU must use the momentum created by the pandemic to strengthen its competitive advantages and take a leading role in vitally important areas: the digital sector, AI, technology, decarbonisation and sustainable circular growth;
• welcomes the EU Recovery Plan and believes that the next Multiannual Financial Framework should provide the necessary means to ensure sustainable and inclusive growth;
• is, therefore, especially concerned about the cuts to investments in innovation and research, digitalisation and the Just Transition Fund, as well as the abandonment of the criteria of respecting the rule of law;
• urges a shift towards prosperity-focused and solidarity-based economic governance by implementing, for example, a golden rule for public investment;
• welcomes the swift inclusion of flexibility in the use of EU funds, but warns that Member States need to significantly improve their programming capacity so that funds are fully absorbed and efficiently used for investments;
• believes that the role of the European Parliament, national parliaments, the social partners and civil society organisations should be further enhanced in the European Semester;
• insists that completing the Banking Union and the Capital Markets Union, and ensuring efficient financial market regulation, should be equally high on the agenda;
• believes that, while an EU unemployment reinsurance scheme that makes its grants conditional on national schemes being financed in a robust way should be implemented, the euro area Member States need increased cooperation and specially designed instruments to improve their resilience and shock absorption capacity;
• calls for a decisive and accelerated timeframe of reforms of tax policies that would close loopholes and combat evasion across the Union.