Euro area economic policy (2018)

Key points

The EESC:

• welcomes the emphasis on sustainable and inclusive growth, resilience and convergence as policy objectives for the euro area;

• notes that although economic recovery in the euro area has gathered pace since last year, it remains fragile, incomplete and atypical, with significant labour market slack, investment below 2008 levels and a persistent current account surplus of the euro area with the rest of the world;

• acknowledges that high public and private debt levels in the euro area make its economy vulnerable and accepts the need to reduce them;

• disagrees with the European Commission's proposal for an overall broadly neutral fiscal stance and instead proposes a positive fiscal stance of around 0.5% of GDP;

• recommends that in applying the fiscal rules, the European Commission should exclude public expenditure on investment from the scope of application of the Stability and Growth Pact;

• welcomes structural reforms that will not only increase productivity and growth potential, improve the business environment and support investment, but also support the creation of quality jobs and reduce inequality;

• considers it a priority that the Member States implement effective measures against tax avoidance, tax fraud, money laundering and the illicit activities of tax havens;

• supports the necessary steps for deepening the EMU, including full and speedy completion of both the Banking Union – European Deposit Insurance Scheme, common backstop for the Single Resolution Fund and the strengthening of the European supervisory framework – and the Capital Markets Union;

• reiterates its view that the euro is the currency of the whole EU and emphasises the need to:
• create a fiscal union;
• strengthen Member States' responsibility for and ownership of obligations vis-à-vis EMU;
• introduce structural reforms within the European Semester platform;
• strengthen economic coordination and governance, and create a European Monetary Fund;
• improve the system of financial intermediation, leading to the reinforcement of real long-term investment by optimising the role of the EIB, EIF and EFSI 2.0;
• make the EMU more resilient so that it can exert greater influence in the world.