21 May 2012

Declaration by Staffan Nilsson, President of the European Economic and Social Committee (EESC)

The EESC's proposal for a European Growth Pact, co-financed by eurobonds in order to boost investments, and bringing together all its different players, would be the powerhouse for practical responses to the current crisis.

"We must have the courage to look at the current crisis from multiple perspectives. There is no single solution. In our opinions issued over recent years we have called on leaders to match fiscal discipline with sustainable growth. National governments must assume their responsibilities and adopt balanced measures to make Europe competitive again. Europe still needs responsible budget management, policies dedicated to attract private investment and structural reforms, when required.

We need more Europe, not less.

• We need deeper European integration, in which responsibilities are shared, risks mutualised and resources jointly leveraged to create debt instruments and a growth model which is credible, coherent and sustainable.
• We need a Europe of true solidarity and respect for all citizens.
• We need a Europe of democracy, both representative and participatory.

The EESC considers that the euro problem is primarily political rather than economic. On the other hand, recent responses from the Commission and the Council suffer from an extensive "democratic deficit" in bypassing the European Parliament and other Union institutions, and do not take into account the common commitment to solidarity and cohesion.

The EESC therefore advocates the introduction of two complementary but distinct EU bonds: Union Bonds for stabilising debt, and eurobonds for recovery and growth. The EESC recommends also the use of a share of the net inflows into eurobonds to finance a European venture capital fund, which was one of the design aims of the European Investment Fund (EIF). This solution would not require any modification of the Treaties.

Eurobonds issued to finance recovery and growth would be traded and could attract funds into the EU from the BRICS - Brazil, Russia, India, China and South Africa – economies. This could strengthen the euro as a global reserve currency and help the emerging economies achieve their ambition for a more plural global reserve currency system.

Press release

EESC proposal

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