EESC calls for more public investment to promote economic growth in the EU

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The Committee backs the priorities set out in the Commission's 2018 Annual Growth Survey, but suggests that the survey should cover environmental policy and other relevant policy areas and issues, such as the quality of employment

In its recent opinion on the Commission's Annual Growth Survey (AGS) for 2018, the European Economic and Social Committee (EESC) pointed to the strategic importance of the European Semester but said that it advocated its expansion to ensure that the European Union's macroeconomic policies are sustainable not only in economic and social terms, but also environmentally.

"The Commission's focus is on increasing investment, structural reforms and strengthening macroeconomic balance. The EESC thinks the Semester cycle should be extended to other areas "beyond GDP" indicators, that is to social, environmental and sustainability targets," said the rapporteur of the opinion, Dimitris Dimitriadis.

The introduction of social indicators, or the Social Scoreboard, is a first step towards a comprehensive system of indicators which take into account social and environmental aspects, Mr Dimitriadis maintained. The European Semester should be further developed to ensure coordinated implementation of the Sustainable Development Goals.

The Committee proposes supplementing these indicators with additional ones for wages, collective bargaining or resource- and energy-efficiency and progress on national climate and energy targets.

"The EESC is in favour of making the Semester support the European Pillar of Social Rights so that it becomes a tool to improve ordinary people's living and working conditions. We would like to see the Pillar's objectives mainstreamed in policies and decisions," Mr Dimitriadis stressed, adding that introduction of the Social Scoreboard has already boosted the social dimension of the European Semester.

Recognising the European Semester's importance, the Committee vowed to continue supporting the Semester while also flagging up the need to increase civil society involvement and encourage public investment.

"There is a need to increase public investment in the long term if we really want results. Growth is the result of investment, which should be a cornerstone," Mr Dimitriadis said, adding that as well as investment, the quality of employment, innovation and knowledge were key to productivity growth.

Public investment should therefore include boosting social investment in measures which promote education, training and better public services, care infrastructure and social cohesion across the EU, with a view to enhancing human capital development and ensuring a skilled labour force but also a strong social dimension.

Private investment rates will only be high enough if the right incentives are created, sound domestic demand ensured and a favourable investment climate maintained, the EESC commented in the opinion.

The Committee also warned that reforms envisaged under the Structural Reform Support Programme, promoted by the Commission to support national authorities in carrying out the necessary reforms, may not deliver the expected results. Moreover, such reforms should not end in mere labour market deregulation and product market liberalisation.

The EESC also called for a non-systemic approach to structural reforms, which should be carried out only when needed. It agrees with the Commission that "economically and socially reasonable and well-balanced structural reforms" are essential to achieve a positive outcome in the long term.

The European Commission's Annual Growth Survey is published every year to establish economic priorities for the EU, offering guidelines to EU Member States when implementing certain policies. It has three main strands: investment, structural reforms, and fiscal consolidation.

The Annual Growth Survey is part of the European Semester, which provides a framework for macro-economic, budgetary and structural policy coordination across the European Union, allowing EU governments to discuss their economic and budgetary forecasts.