The EESC welcomes the fact that the Recovery and Resilience Facility regulation confirms the importance of genuine civil society involvement in the development of national plans and advocates for the establishment of binding conditionality for such consultation. To support economic development the EESC considers the full operation of the Single Market as well as fiscal policies and support measures crucial, while calling for the establishment of new fiscal rules that reflect social and economic realities after the pandemic. New instruments to combat tax evasion, undeclared work and the shadow economy are also called for. The EESC also welcomes the inclusion of the green and digital transitions, but regrets the insufficient attention paid to social issues. Efforts to move rapidly towards a green and digital economy must not result in a further increase in poverty and greater social exclusion.
Reshaping the EU fiscal framework for a sustainable recovery and a just transition (own-initiative opinion – Gr II) - Related Opinions
This additional opinion updates and complements the proposals made in the original ASGS opinion, adopted in February this year. The EESC welcomes the step forward towards embracing a more social, inclusive and sustainable economic model, particularly given the economic and social effects of COVID-19. To support the economic recovery and public investment, and in support of a digital and green transformation, the EESC believes that a revision of the Stability and Growth Pact, flexibility in state aid rules and a rethink of tax policy is necessary. Well-resourced public health measures and social security systems are likewise of vital importance. The EESC also welcomes the Commission's proposals for Next Generation EU and sees the ASGS as an opportunity for the EU to shift towards an economic model that gives equal weighing to both economic and social objectives.
The EESC is concerned to note the euro area's economic downturn and the gradual end to a fall in unemployment, wedded to the persistent higher incidence of risk factors affecting economic performance. It is the European Green Deal that the EESC sees as the backbone of the future EU and euro-area economic configuration – the potential start of a fundamental change and a turning point. If managed successfully, it could move Europe up a gear economically and socially; if not, its failure could fatally jeopardise the integrity of the EU.
Although considerable progress has already been made towards completing EMU, there is still a need to significantly reinforce all four of its pillars, taking care to maintain the balance between them, as neglecting one or more of these pillars could result in dangerous disparities. Resilience to crises is a necessary, but not sufficient, condition for completing EMU: it also requires a positive vision, as set out in Article 3 of the EU Treaty. The EESC generally calls on the European institutions and national governments to take much more ambitious action in the context of EMU reform in order to achieve a more integrated, more democratic and socially better developed Union.
The EESC appreciates the proposed roadmap for completing the European Economic and Monetary Union (EMU) but its support is not full and enthusiastic, since a number of social, political and economic issues, highlighted in our previous opinions, were not taken into consideration. The completion of the EMU requires first of all strong political commitment, efficient governance and better use of the available finances, in order to actually cope with both risk reduction and risk sharing among Member States. For these reasons the EESC underlines that the principles of responsibility and solidarity at EU level should go hand in hand.
This opinion is part of a wider package of four EESC opinions on the future of the European economy (Deepening of the Economic and Monetary Union and Euro area economic policy, Capital Markets Union and The future of EU finances). The package of opinions underscores the need for a common sense of purpose in the Union governance, which goes far beyond technical approaches and measures, and is first and foremost a matter of political will and a common perspective. Against this background the Committee advocates the exploration of tools to improve economic governance in the EMU, for instance by creating a permanent Euro Finance Minister, while ensuring full democratic accountability. Bundling competences would enhance coherence of EMU policies.
The European economic governance rules, conceived in crisis, played an important role in fiscal consolidation and economic policy coordination, but the cost was high in terms of growth and employment. The quantitative easing measures now being embarked upon by the European Central Bank need to be matched by greater political initiatives by the Member States. In the review of the Multiannual Financial Framework in 2016, there is a need to back urgent structural reforms of common EU interest with some form of fiscal capacity. A reasonable deviation from the 3% deficit parameter should be considered as a temporary exception for a given number of years and not be automatically liable to sanctions. A lack of implementation of country-specific recommendations (CSRs) could be countered by real involvement of civil society and the social partners in drawing up CSRs.