To ensure economic progress Europeans need more and better Europe

For the EESC, European added value must be at the centre of economic decision-making within the debate on the future of Europe

"EU governance needs a common sense of purpose that goes beyond technical approaches and measures. It is primarily a matter of political will and a shared vision of Europe's future." That is how Joost van Iersel, president of the ECO section in the European Economic and Social Committee (EESC), summarises the EESC's position on the future of the European economy.

Stimulating further economic reforms and investment at EU level, reforming and increasing the EU budget and completing the economic, fiscal, financial and political union are some of the main recommendations of the package of EESC opinions on the future of the European economy. 

The opinions relate to the European Commission's White Paper process on the future of Europe, in particular the reflection papers on the deepening of the EMU and the future of EU finances, complemented by work on the ongoing Capital Markets Union mid-term review and the upcoming European semester recommendations for the euro area. The four opinions address current challenges for the EU economy and make specific proposals for tackling them.

"Structural reforms must be carried out with a euro area and an EU focus, not just by means of isolated actions in the Member States", says Petr Zahradník (Employers' Group), rapporteur for the opinion on Euro area economic policy 2017. "To gain citizens' support for these reforms, the social and democratic dimensions of euro area governance must be strengthened. Improving the Eurozone governance would also attract other countries to join – a process which should be supported, especially given the improving economic situation", he adds.

The EESC advocates a balanced mix of euro area economic policies with properly interlinked fiscal, monetary and structural components. "We call on the European Council to revise its rejection of a positive fiscal stance for the euro area in order to sustain the current positive outlook. Furthermore, labour market reforms should focus on promoting high quality jobs with an emphasis on appropriate wage levels and full respect for social justice", says co-rapporteur Javier Doz Orrit (Workers' Group).

Looking beyond the economic cycle, David Croughan (Employers' Group), rapporteur for the opinion on Deepening EMU by 2025, notes: "The Commission and the Council need to take bold decisions to advance EU-wide governance, before the end of the current term. If we want all our Member States to flourish, we must secure political agreement to deepen the EMU". In the EESC's view deepening of the EMU is crucial to better support monetary policy and national economic policies and to foster stability and prosperity for all Europeans. An important factor in moving towards political union is upward convergence of EU economies.

The Committee therefore considers that the European Semester process should involve the European Parliament, national parliaments, social partners and civil society, and that it must include a strong social dimension. In addition, the banking union should be completed as a matter of urgency to restore health to the financial sector. There is also a clear need to ensure that fiscal and macroeconomic imbalance rules act counter-cyclically and are supported by a fiscal stabilisation function to maintain essential investment levels in the euro area. Finally, the EESC recommends exploring tools to bundle and ensure coherence among the currently fragmented EMU policies, for instance by creating a democratically accountable Euro Finance Minister.

In its opinion on the EU finances by 2025 the EESC calls for reform of the EU budget in relation to expenditure and own resources and welcomes the Commission's proposal to focus on European added value as a basic principle on the spending side of the EU budget.

"The concept of European added value is an opportunity to overcome the 'juste retour' principle and to create a common sense of purpose in EU governance. It could be a turning point in the current political crisis", says rapporteur Stefano Palmieri (Workers' Group). Co-rapporteur Petr Zahradník (Employers' Group) underlines that "the EU budget should be more flexible and more focused on results and performance, and make increased use of innovative financial instruments". The Committee recommends first defining political priorities with European added value and then determining the resources needed to achieve them.

Notwithstanding the impact of Brexit on the post-2020 multiannual financial framework, the EESC is calling for an increase in the EU budget beyond 1% of EU GDP. As Stefano Palmieri points out: "The gap between citizens' concerns and expectations and EU competences and resources is growing. The EU is losing its credibility. We need more own resources in order to deliver". The EESC also considers that the budget should be closely linked to the process of the European Semester and ensure sustainable long-term investment.

The opinion on the Mid-term Review of the Capital Markets Union (CMU) urges all Member States to implement the CMU speedily in order to provide the EU economy with a new impetus and dynamism. "The CMU is neither a voluntary exercise nor a one-size-fits-all approach", says rapporteur Daniel Mareels (Employers' Group). "Account must be taken of the ambitions and requirements of local areas and regions, as well as the role of bank financing for SMEs." The broadening and diversification of financial sources associated with the CMU should lead to more convergence. The CMU – together with the Banking Union – would also ensure the establishment of a financial union, which is an important pillar of the EMU. The EESC welcomes the introduction of a system to regularly assess progress and implementation of the CMU in the Member States.

The recently unveiled Commission Work Programme for 2018 shows the Commission's intention to make specific proposals in the areas highlighted by the Committee. They will also be discussed at the European Summit on 14-15 December 2017. The Committee will closely follow the progress made and will make sure that the voice of European civil society is taken into account in EU policy-making.