At its plenary session in July, the European Economic and Social Committee (EESC) presented proposals for the economic agenda of the upcoming legislative period (2019-2024) and recommended that they should form the basis of a new European economic strategy. The Committee's proposals seek to develop more resilient and sustainable EU economic policies within an improved governance framework for the Economic and Monetary Union (EMU).
Future economic policy and governance should, in the EESC's view, take account of geopolitical and societal challenges, such as the global economic slowdown, unresolved trade disputes, Brexit, climate and demographic change, the growing inequalities between Member States and regions, as well as within societies, the fourth industrial revolution and other global and domestic risk factors, in order to strengthen resilience to crises and the sustainability of the economic model.
The challenges require a far-reaching European economic strategy. Clear policy objectives and a more coherent economic governance framework could turn around any negative trends. Political institutions, as well as economic and social actors, must be prepared to act upon these challenges, anticipating necessary changes and guiding transformation processes.
Javier Doz, EESC rapporteur for the opinion on Towards a more resilient and sustainable European economy, said of the Committee's proposals:
In the first place, the drive towards strengthening the institutional architecture of the Economic and Monetary Union should be kept up and reinforced. However, we also need measures to reduce economic and social disparities as they are threatening the political sustainability of the EU and all its benefits to citizens.
Judith Vorbach, EESC rapporteur for the opinion on A new vision for completing the Economic and Monetary Union, said in this regard:
We need more ambitious action in the context of EMU reform to achieve a more integrated, more democratic and socially better developed Union. All four pillars of the EMU – the monetary and financial, the economic, the social and the political pillars – must be reinforced in a balanced way.
Moreover, in its opinions the EESC points to the fact that in order to complete the EMU, building up resilience to crises is a necessary condition but not a sufficient one in itself: a positive narrative for the future development of the EU economy, as set out in Article 3 of the EU Treaty, is needed in order to foster trust in the EU economy and to contribute to its stability and the well-being and prosperity of all citizens.
Although considerable progress has already been made towards completing the EMU, we have now ended up somewhere around the halfway mark along the road. We have to remember that solidarity and the willingness to compromise are the basis for a positive future for the EMU, said Ms Vorbach.
The EESC's recommendations for a strong, inclusive and resilient EMU include:
- creating fiscal capacity at euro area level to buffer shocks, to be funded by a common debt instrument;
- balancing supply- and demand-side measures, which currently entails boosting the demand side by securing purchasing power and promoting investment;
- completing the Banking and Capital Markets Unions and laying the foundations for definitively overcoming the financial crises by also taking into account the social and environmental impact of the regulations;
- establishing minimum social standards in the Member States as a specific measure for implementing the European Pillar of Social Rights; and
- enhancing the involvement of the European Parliament, social partners and civil society organisations in key social and economic policy decisions.
In order to ensure the effectiveness of measures to build a more resilient and sustainable economic model and to guarantee fair transitions, both green and digital, reinforced social dialogue and collective bargaining are needed, together with the participation of civil society.
With regard to policy measures for upward convergence, the Committee believes that education and training, R&D and innovation need to be promoted. These measures can strengthen the competitiveness of the European economy: they will enhance the economy's capacity to raise productivity and living standards in a sustainable manner while at the same time helping to make it green and climate-neutral.
In addition, investments, both public and private, must be stepped up to achieve a more resilient and sustainable economy, labour market and environment, and to foster upward convergence and a fair transition to a fully revised production and consumption model. The Committee thus reiterates the request for the financial means available under the Multiannual-Financial Framework 2021-2027 to be increased to 1.3% GNI of the EU-27.
Concerning the implementation of the EESC recommendations, Mr Doz said:
The European institutions and the Member States should use legislative and governance instruments, such as the European Semester and the Multiannual-Financial Framework to establish a coherent action programme promoting the key factors for economic resilience and convergence and providing for adequate funding.
Finally, the EESC opinions also reiterate previous calls by the Committee for reforming the European fiscal rules with regard to public investment, establishing a common safe asset and fighting unfair tax competition and tax evasion. These measures are also important elements to be included in the economic agenda of the new European Parliament and European Commission.