Additional considerations on euro area economic policy 2024

Key points

The EESC:

• considers that strengthening fiscal coordination among euro area Member States is crucial for ensuring real upward convergence, stability and resilience. This could involve closer coordination of national budgetary policies, as well as discussions around the possibility of common fiscal instruments. In this sense, the EESC believes that NextGenerationEU has proven just how important it is and recommends that similar instruments be part of the future MFF. In addition, the EESC strongly urges both the national and EU levels to place fiscal matters on a path towards sustainability and create fiscal space for future shocks;
• considers the completion of the Capital Markets Union to be a priority. The small dimensions and fragmentation of the capital markets in the EU are causing investors to migrate to other global markets, especially the market in the United States. However, financial market stability and comprehensive consumer protection will be crucial;
• considers that the completion of banking union must be a priority in the European Commission’s new term as the existing banking regulatory and practice differences across the Member States cause financial fragmentation and prevent financial resources from being mobilised effectively, especially when it comes to financing important infrastructure projects at European level;
• believes that a plan of measures should be developed to speed up real convergence, and cohesion policy should continue to take centre stage of the MFF;
• believes that the EU must maximise the competitive advantage offered by the single market. The EESC supports the European Commission’s initiative to reduce reporting requirements by 25%, as these requirements are one of the main obstacles to sustainable economic growth. Cutting red tape and simplifying administrative procedures would stimulate the European business sector and make it more efficient and effective. However, this must not be at the expense of social and environmental standards, and workers' and consumers' rights;
• considers that a new approach in the field of decision making is urgently needed as one of the greatest shortcomings of the euro area is the lack of a credible decision-making process;
• considers that as the decarbonisation process continues, the EU must complete the single electricity market. Creating a fully interconnected network at European level is essential. This will also help to reduce energy prices, combat inflation and help EU companies to increase their competitiveness;
• considers that a comprehensive policy agenda for the euro area in 2024 would need to balance short-term imperatives, such as economic recovery, with long-term priorities, such as investment, sustainability, innovation and social inclusion.