Only a strong economy can allow Europe to weather the storm

EESC proposes fostering economic growth and "beyond-GDP" indicators


It is vital to foster economic growth; only if Europe has a strong economy, can it better face the political and social challenges that stand before it. This was one of the main messages of the EESC opinions adopted yesterday in Brussels. The EESC calls for more investment– both private and public – directly in the countries that need it most. The EU body representing Civil Society also finds that the Juncker plan is not enough.

"With weak growth of 1,6 to 1,8 % this year, accompanied with doubts on the horizon, negative messages such as Brexit, the very existence of the EU is called into question in many Member states. The solution is to create high-quality jobs, instil a more favourable climate for investment and prevent the possibility of tax fraud in Europe", said Javier Doz Orrit, the EESC rapporteur on Euro area economic policy (2017).

The EESC supports the Commissions' original proposal setting a positive aggregated euro area fiscal stance, which the Committee believes will help Europe to reach its potential to improve productivity and economic growth in the short term. The Committee's opinion calls for the creation of a European Deposit Insurance Scheme and a common backstop for the Single Resolution Fund of the Banking Union; for an own and common budget for the euro area, financed also through euro bonds; and for a social and civil dialogue at all governance levels, which is vital to implement the necessary policies for recovery and long-term economic sustainability.

The Golden Rule, allowing for productive future-oriented investment by the Member States to be considered apart from the limits set by the Stability and Growth Pact should be introduced with a view to adopting a more long-term approach instead of focusing on very specific numerical targets. "We clearly need to implement a symmetric adjustment of current account balances; however it is up to Member States to decide how to make such adjustments in practice. The EESC recommends a balanced mix of monetary, fiscal and structural instruments, not one with a privileged position. Structural reforms should focus on productivity growth and should ensure the fair distribution of their gains", stated Petr Zahradnik, co-rapporteur of the EESC opinion.

The EESC calls for flexibility instead of very rigid EU governance – and recommends that tailor-made solutions be used instead, in its opinion on the Annual Growth Survey 2017. "Given that the poverty level and youth unemployment have not been significantly reduced, Europe needs a "beyond-GDP" approach. This would require a result-oriented analysis with indicators for social, environmental and sustainability targets, combined with a promotion of social progress", said Etele Barath, the EESC rapporteur. "Education, innovation, R&D should be boosted – but also inclusivity and non-discrimination should be included in these measures. Consumption will be the basis for growth for 2017, which we welcome, but we need to balance it with investment."

In the Committee's view, a clear and comprehensible overview of the political and strategic positions for the near future and for the longer term is essential. The ten priorities of the Juncker Commission as well as the 2030 targets (also covering sustainable development), should jointly determine development processes. The Committee still considers the European Semester an appropriate tool for macro-economic governance. However the EESC calls for its improvement with a reinforced coordination role of the European Commission and a clear commitment of the Member States to implement the policies they agree on at Council level, thus avoiding uncertainty and creating a conducive investment environment.

Furthermore, an analysis is needed of the consistency between traditional cohesion policy, its financing (ESI Funds), and the new investment instruments (EFSI). The EESC also draws attention to the complicated interplay between the different ways of financing the EUs cohesion policy.



EESC Press Release - European economic policy Annual growth survey CP 09