- Sustainable development must be better integrated in the semester
- Policies must boost high quality public and private investment
- Implementation of Country Specific Recommendations (CSRs) is key
The European Economic and Social Committee (EESC) held a public hearing on 12 September to discuss priorities for the 2020 European Semester and possible drivers for implementing it. Policy makers, academics and civil society representatives came up with a wide range of policy recommendations, but agreement centred on the urgent need to focus on sustainable development, boost investment and increase the effectiveness of CSRs.
According to Gonçalo Lobo Xavier, president of the EESC's European Semester Group (ESG), this kind of hearings are essential to add value to the semester process, as the Committee strives to contribute to making the European Semester an even more effective governance tool than it already is, and it is an opportunity to boost civil society participation.
Following the recent presentation of the next European Commission's guidelines, the nomination of Commissioners for the new College and the mission letters issued by European Commission President-elect Ursula von der Leyen, speakers were generally optimistic about the European Semester's potential future course.
Anne Demelenne, rapporteur and member of the ESG, underlined the need to look at the semester against the backdrop of the current economic outlook and global uncertainties, such as trade tensions, climate change and migration. She said:
There is an ever greater need to have a proactive policy in terms of investment, regarding current account imbalances on budgetary policy, fiscal issues and regarding social and environmental aspects.
At the heart of the debate at the hearing was the scope of the 2020 semester. Speakers discussed whether the European Semester – which had been envisaged as an economic policy coordination framework for the European Union and established during the financial and economic crisis – should continue to keep a strong focus on economic indicators and possible spill-over effects for the EU as a whole, or instead deal in equal measure with economic, fiscal, social and environmental aspects.
While everyone agreed on the importance of sustainable development, there was some divergence of view on the future scope of the semester and hence its priorities. Most welcomed the incorporation of the United Nations' Sustainable Development Goals (SDGs) into the European Semester, as had been proposed by the Commission President-elect.
Patrizia Heidegger, of the European Environmental Bureau, said:
Current policy objectives, like growth in terms of GDP and limiting debt, do not necessarily deliver on all of the wider environmental and social needs." The European Semester should be transformed into a "Sustainable Development Cycle in line with the SDGs and an overarching Europe 2030 strategy – and be based on wellbeing indicators, instead of economic growth objectives. It should serve to ensure policy coherence.
In this spirit, speakers said the 2020 semester needed to address demographic change, digitalisation and technological and climate change. This would also mean that it had to contribute to the implementation of the European Pillar of Social Rights (EPSR). Closing the current investment gap would be essential.
James Watson, of Business Europe, called for a strong focus on sustainable economic growth, employment and competitiveness.
It is the best means by which we can meet our goal to reduce inequality and poverty and improve environmental standards, was his argument. A focus on the economic environment was key to ensuring the semester's effectiveness.
On the other hand, the point was also stressed that social and fiscal issues should also be addressed because of their impact on internal demand and the link that existed between internal demand and growth.
Participants identified education and training, R & D, better regulation, investment and a more growth friendly public expenditure as the first areas structural reforms needed to address. Investment in research, technology and innovation was needed to keep pace with global competitors.
Representatives from NGOs called for more coherence and consistency in the 2020 European Semester, a more progressive and fairer taxation and for reducing inequality and poverty.
Grégory Claeys, from Bruegel, said: "Fiscal policy needs to play a more important role and therefore we need to coordinate more fiscal policy in the euro area.
, as the EU was lacking the necessary tools to do so, the Commission needed to continue working on deepening Economic and Monetary Union and building a stabilisation instrument for the euro area. Fiscal rules also had to be reformed. "They should function around an expenditure rule, he said.
Echoing this, others agreed that sound fiscal policies were a key element of sustainability.
Roland Zwers, from the Dutch national Economic and Social Council said that effective rules for fiscal policy and structural reforms were needed. The current EU policy framework had to be overhauled to achieve the SDGs.
The poor implementation of the CSRs adopted under the European Semester should be another priority tackled in the 2020 cycle. There were various reasons for shortcomings here, such as lack of ownership and political will, funding problems and the top-down approach of the instrument, which prompted a lack of involvement by local and regional authorities, social partners and civil society organisations.
Jean-Luc Vanraes, member of the Committee of the Regions, said:
To increase ownership of the country specific recommendations, we need to increase ownership of the whole semester process at country level. Replacing the current top-down approach with an approached based on partnership and multilevel governance was crucial and could contribute to a more effective semester.
Dialogue and communication were considered essential elements in improving implementation and should therefore merit specific attention. More incentives needed to be created. A European Semester that addressed participatory rights would also help to increase citizens' interest in the process and its legitimacy.
The EESC is currently drafting an additional opinion on the 2019 Annual Growth Survey, aimed at providing timely input into the European Commission's work on the 2020 survey and hence into the 2020 European Semester cycle. The conclusions of the public hearing will feed into the opinion, which will be put to the vote at the Committee's plenary session in October.