The 2008 financial and economic crisis has been the worst economic disaster since the Great Depression of the 1930s. However, there have been signs that the European economy is recovering at last. But which paths to follow to promote sustainable economic growth, which, at the end of the day, benefits all people of our society? This was the subject of a panel discussion hosted by AK EUROPA, the Brussels Office of the Austrian Federal Chamber of Labour, ÖGB Europabüro, the Brussels Office of the Austrian Trade Union Federation, and the European Trade Union Institute ETUI on 19 September in Brussels.
However, the economic recovery of the European Union, which is slowly setting in, is based on anything but solid foundations. Even though, economic data is pointing towards stable growth, investment figures and wage development are rather meagre. Rising wages are representing an important element of sustainable growth. The creation of new, albeit precarious jobs, such as part time or temporary work, does not contribute to raising the pay level. The four panel participants discussed the question of the way forward towards a sustainable economic development.
José Leandro, Director for Policy, Strategy, Coordination and Communication, DG Economic and Financial Affairs, European Commission, delivered an initial statement on the current economic situation of the EU, in which he cited an increase of net exports and a fall of unemployment in the EU (currently at 9.1%) as examples for positive developments. However, he left no doubt that this tender boom is anything but stable. Both investments and wage development remain at a low level. In order to achieve actual sustainable growth, Leandro suggests increasing public investments in the social and education system. Apart from that, a transfer of fiscal competencies from national to EU level would be a desirable step to be able to guarantee future stability.
Markus Marterbauer, Head of the Economics Department, Chamber of Labour of Vienna, AK, also sees the necessity of strengthening the current economic upturn. At this point, he does not hold back with his criticism of EU institutions that undertook insufficient measures during the financial crisis. In his opinion, to achieve sustainable growth, one had to strengthen domestic demand, support economically weak regions in the EU and to create jobs, especially for young people, migrants and women. He also regards the intensification of public investments as a possible option, as these often act as a catalyst for private investments. In this context he supports a Golden Investment Rule. Apart from that, Marterbauer also advocated focussing on further education measures for the unemployed as well an increase of wages in form of minimum wages.
Matthieu Méaulle, Advisor, Monetary and Fiscal Policies, European Trade Union Confederation, also criticised the European Commission for its crisis policy. The austerity policy of the last years had contributed to the weak economic performance of the Union. Important for sustainable growth are investments. However, the low profit chances are an important problem, as companies do not see an incentive to invest. Public investments were also greatly reduced during the austerity policy, which also contributed to the low economic growth. For Méaulle, the low wage level is not only problematic for economic but also for political reasons. The fact that parts of the working population is turning to right-wing populist parties, is a potential risk to a Common Europe.
James Watson, Director of Economics, BusinessEurope, regards the current economic recovery as positive. Speaking from the employers' side, he pleaded in favour of a number of reforms to put growth on a solid foundation. Watson suggests further labour market reforms such as the opening of regulated services. Fiscal measures had to prepare the ground for boosting investments. To achieve this, it is essential to provide the unemployed with further education opportunities, to be able to offer companies a wide selection of qualified employees.
The current positive development of the EU’s economic data does not yet guarantee long-term and sustainable growth. The participants of the debate largely agreed on the necessity to boost investments and increase wages. However, the paths towards sustainable growth vary. However, one thing seems to be clear: if the economic recovery does not benefit the general public, one could at times be confronted with people being led politically astray.