15 February 2013

EESC: Europe on the road to recovery?

During the European Economic and Social Committee's February plenary session, President Barroso and EESC members held a debate on sustainable growth, the road to economic recovery, and the role of civil society. Three opinions on the specific economic policies of Member States were adopted.

The European Commission (EC) and the European Economic and Social Committee (EESC) agreed that sustainable growth was crucial to maintaining Europe's social model. President Barroso stressed the importance of discipline, convergence and solidarity to create jobs and growth, while EESC President Staffan Nilsson urged the Member States and the institutions to deepen the integration process and keep in mind the costs of non-Europe. The Commission considered that recent decisions on banking union and fiscal reforms should lead the EU to the path of recovery, although evidence shows that there is no room for complacency. President Barroso praised the Committee's important service to the EU and the EESC's advisory role and support in many policy areas, for example in the work for a sustainable Europe and in defending the Commission's proposal for the European budget. EESC Member, Jane Morrice, thanked the Commission President for his commitment to work closer with the Committee but urged him to do more: "I believe that you can take more advantage of the Committee's expertise", she said. "Please, use us better."

Three opinions related to national policy areas were adopted. In its opinion on the 2013 annual growth survey (rapporteur Xavier Verboven, Workers’ Group, Belgium), the EESC warned against continuing austerity policies and against the severe consequences of recession, which could structurally weaken economies. In its opinion on employment guidelines for Member States (rapporteur Wolfgang Greif, Workers’ Group, Austria), the EESC reiterated its deep concern that neither the employment nor the anti-poverty goals of the EU 2020 strategy could be met. It also called for a European stimulus package with a comprehensive impact on labour market policy.

Stimulating demand and delivering distributive justice

The third opinion to be adopted (rapporteur Thomas Delapina, Workers’ Group, Austria) was on "Economic policies - Member States of the euro area" following consultation by the EC on a Council recommendation on broad economic guidelines for the economic policies of the euro area Member States. The EESC welcomes this recommendation by the EC, which provides not only general guidelines for the countries of the euro area, but also recommendations tailored to national economic circumstances. However, the Committee views the current macro-economic policy mix as unbalanced and calls for a new growth model taking into account the need for demand and distributive justice. The EESC puts forward a number of specific recommendations including stricter regulation of financial markets to meet the needs of the real economy and a solidarity safety net to avoid speculation against countries and financing costs.

In the light of international research, which suggests that in recessive circumstances fiscal multipliers have a more adverse impact on economic growth and employment than was hitherto realised, the Committee urged a re-evaluation of fiscal multipliers in the design of economic policies. Thus, policies should take into account that negative income and employment multipliers of revenue-related measures are generally more limited than those of spending cuts. The EESC warned against price competition as a means of reducing external economic imbalances, particularly through wage restraint, because it reduced overall demand leading to a downwards spiral to the detriment of all countries. Europe would only succeed in the global race by pursuing an upwards-leading strategy of high-quality added value.

The Committee opposed the weakening of the social security systems and called for a general re-think of tax systems, with due regard for distributive justice and for a stronger role for the social partners at national and European level, enhancing the value of macro-economic dialogue. Revision of the guidelines should take into account the fact that countries with successful social partnerships had been better able to cushion the impact of the crisis than other countries.

Press release

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