21 November 2013

ECON/EMPL Committees: Commission beset by critics of Annual Growth Survey

Mr Rehn opened the meeting on an upbeat note, saying that Europe was seeing a turnaround and that growth was returning. Pressed by many MEPs on his opening remarks, he then qualified his remarks by saying "I did not say I am satisfied by the way the economy is. There is no room for complacency".

For his part, Commissioner Andor painted a bleak picture of the employment front in his opening remarks, warning that unemployment was becoming structural and divergences between the core and periphery were growing, as was the mismatch between skills supplied and demanded. Drop-out rates from education or training was also worrying, he said.

Alarm on lending to SMEs

Many MEPs from across the political spectrum insisted that measures to encourage lending to small and medium-sized enterprises (SMEs) were far from sufficient. More needed to be done to activate dormant savings, stabilise the banking sector and thus encourage it to lend more, and improve specific programmes to help SMEs, they said.

Mr Rehn conceded that the low lending to the real economy was "the most serious bottleneck to growth". He also said he hoped the European Council would decide to launch more ambitious initiatives for SMEs.

Wrong forecasts

MEPs came down heavily on the Commission's repeatedly over-optimistic economic forecasts. They also critisised it for not taking sufficient account of these errors and not adapting its economic reform prescriptions to tackle the ensuing social problems. The Annual Growth Survey, various MEPs pointed out, was a case of “more of the same, year after year”.

Mr Rehn admitted that forecasting had been difficult, but pointed out that forecast accuracy was always lower in times of crisis.

Germany unfairly criticised?

German centre-right MEPs took offence at the Commission's comments that Germany needed to boost domestic investment and demand. But other MEPs acknowledged that efforts were also needed from Germany. Mr Andor replied that where German practice had been exemplary, the Commission had said so. But the Commission would also point out where it could make improvements.

Next steps

The two committees’ reactions to the Annual Growth Survey will be set out in their rapporteurs’ draft reports, to be tabled in December.

Press release

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