Statement by the EESC Employers' Group on the European Commission's Autumn 2020 Economic Forecast - Economy might be harder hit than predicted by the European Commission forecast

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The EESC Employers' Group agrees with the European Commission's Autumn 2020 Economic Forecast, which makes it clear that Europe's economic rebound has been interrupted by the resurgence of the pandemic. The second wave of the COVID-19 pandemic is leading to continuing high levels of uncertainty and downside risks, such as a rise in unemployment, growing deficits and public debt, reduced investment activity and consumer spending and a labour market downturn in the European economy. The EESC Employers' Group believes that the current high level of uncertainty could make the Autumn Economic Forecast less accurate and that the economy might be even harder hit than predicted by the European Commission.

Fostering innovation and empowering start-ups will help us not only to protect current jobs, but also to create new ones, closing the existing inequality between those having a job and those who don't. Having provided more than half of all new jobs in the last five years, innovative companies are clearly Europe's engine for job creation. To foster this potential, Europe needs macro-economic policies that bolster demand and support healthy companies. In the medium term, a structural transformation and reallocation of resources must take place in order to tackle low productivity, the transition to a low-carbon economy and rising inequalities in some Member States. The EESC Employers' Group calls on the European Commission to pay particular attention to solvency tools, where needed, to support viable firms suffering from liquidity squeeze, while facilitating an orderly winding-down for companies that have become obsolete. We agree that the best policy response is to deliver on the expectations of the NextGenerationEU, which represents a unique opportunity for a fast and transformative recovery. Setting this in motion and engaging with the private sector should be given the highest priority.

The Employers’ Group calls for a synchronised fiscal push to improve prospects for all. Fiscal policy must play a leading role in the recovery, making sure that the level of expenditure does not unnecessarily compromise fiscal soundness. We acknowledge that the fiscal response to the crisis, coupled with lower revenues, will complicate Member States' fiscal sustainability. Governments should look for high-quality projects and strengthen public investment management to ensure that projects are competitively selected and resources are not lost in inefficiencies.  Looking forward, we call on the European Commission to reassess the parameters of the Stability and Growth Pact.

Lastly, following the latest developments in the EU-UK negotiations, it is imperative that both sides remain committed to do everything in the weeks ahead to deliver an agreement that provides a sound competitive environment for companies, combining good market access with level playing-field provisions.