28 November 2012

ECON Committee: Commission's economic priorities fail to address some key issues, say MEPs

The economic policies that the European Commission wants EU Member States to apply in 2013 rely too heavily on austerity, many MEPs told Commissioners Rehn and Andor as they presented the Commission's newly-adopted Annual Growth Survey to Parliament.

Other MEPs doubted the Commission's ability to push through reforms, given the Member States' unwillingness to cooperate. The latest developments in Greece were also raised.

The Annual Growth Survey (AGS) is the first step in the eight-month economic coordination process known as the European Semester  This aims to help EU countries to implement economic policies in sync, as a prerequisite for any effective economic governance.

Commission priorities

Investment, pursuing structural reforms and ensuring the sustainability of public finance are key priorities for 2013, said Mr Rehn. He added that the Commission would be ready to exempt some types of non-recurrent public investment from stability and growth pact rules, so that such expenditure not be included when calculating a country's debt.

On the employment side of the AGS, Mr Andor said that one priority would be to encourage countries to shift taxation away from labour on to other sectors of the economy. He also stressed the need to tackle  youth unemployment, and that more must  be done to increase labour flexibility.

MEP concerns

Many MEPs argued that the Commission is failing to address some key issues. They criticised it for basing its recommendations on unreliable economic forecasts and for administering the same prescription when it was clear that austerity was not working. Some said it should come up with more concrete ideas for tackling unemployment and generating growth-orientated investment, others that it should be tougher with  "surplus" countries like Germany, which they said also contribute to economic imbalances.

Next steps

The European Parliament strongly believes that the European Semester needs much higher political visibility and the players involved in it need to be more accountable for their decisions. 

One goal is for national parliaments to take more ownership of the process. To this end, the European Parliament will hold an inter-parliamentary week on the European Semester at the end of January 2013, to bring together MEPs and national MPs. This recurring meeting will feed into the Spring European Council, at which the Commission's Annual Growth Survey is formally endorsed.

© European Parliament