Economic policy of the euro area

Key points:

• The EESC welcomes the establishment of economic priority programmes to stimulate growth in euro area countries at the start of the European Semester. However, the Committee regrets that civil society and the social partners were not consulted on the design and national processes of the Semester.
• The Member States of the euro area should take all necessary measures to ensure more convergence and integration in the economic field, including a solid political and institutional foundation. This should go in parallel with progress towards establishing a euro area fiscal union, social union, and a unified external representation in international financial institutions.
• In contrast to the recommendation of the Commission, the focus of fiscal policy should be designed to be more expansionist than neutral. Therefore, the EESC recommends a fiscal stimulus focusing on public investment: this would deliver stronger demand in the short term but also expand growth potential in the long term.
• The EESC advocates the reduction of taxation on labour insofar as it does not threaten the financial sustainability of social protection systems. The effect of robotics and digitalisation should be taken into account at a fiscal level. New forms of work such as the sharing economy should be introduced for the benefit of society, without jeopardising workers' rights and social protection systems.
• Structural reforms alone, aiming at improving the supply side of economies cannot be the answer to the problem of weak recovery. Structural reforms that may have positive effects on demand in the short term should be prioritised.
• The EESC calls for a coordinated effort to create a more business-friendly environment for SMEs through better regulation and consistent reduction of bureaucracy, and ensuring sufficient and adequate financing as well as a systematic facilitation of exports to markets outside the EU.
• There is a particular need to create a European insolvency law and open up new funding opportunities for micro-enterprises and start-ups. An evaluation is urgently required to discover the opportunities that the new models of banking such as Islamic banking might offer for corporate financing in the EU. In this context, the EESC stresses the need for the planned creation of an EU venture capital fund.
• To solve the European competitiveness and sustainability problem, the EESC recommends establishing a Digital Holding following the model of the very successful Airbus Group. This multinational cooperation includes several subsidiaries of different EU Member States and is a key player in the European economy and industry.