The independent Annual Sustainable Economy Survey, which has been prepared by the Chamber of Labour in cooperation with several European research institutes, clearly shows: even though economic and social developments in the Eurozone have improved over recent years, environment development has not. Hence, it is obvious that the next Commission is required to take action.
On behalf of the group of Socialists and Democrats (S&D) of the European Parliament, the Chamber of Labour Vienna, in cooperation with the French Economic Research Institute OFCE and other research institutes, has prepared the independent Annual Sustainable Economy Survey 2019 (iASES, previously iAGS). The survey provides an alternative assessment of the Annual Growth Survey (AGS), which the Commission published within the scope of the European Semester at the end of 2018. The iASES clearly shows that social security, inclusion, low unemployment and good working conditions have to be addressed at the same time for all, taking ecological limits into account.
In spite of a rise in employment, unemployment remains far too high
The rise in employment in the EU by over 12 million meant that unemployment is now at the same level as before the crisis. However, aiming the target of full employment, at 8.1 %, the current unemployment rate in the Eurozone is still far too high. This still also applies to the considerable number of atypical jobs in the EU, which is accompanied by a high proportion of people threatened by In-work poverty.
Placing emphasis on social issues…
Measured against the target of balanced social, economic and environmental progress, the proposals of the EU Commission for 2019 - in spite of further developments - still fall short of what is required. Even though the social challenges play a bigger role, compared to economic targets, they once again take a back seat when push comes to shove.
Based on the poverty rate it becomes apparent that in spite of the still high imbalance, the effectiveness of social transfers is in decline because social benefits are being cut at least in real terms. This is among other fuelled by the constant reference in the European Semester to high costs for pensions and healthcare.
Wealth and corporate taxes, which are important for a fairer distribution of income and wealth, are overall cut even further in the EU - starting from an already very low level. In addition, there are aggressive tax avoidance strategies by multinational corporations, which undermine the financial bases of Welfare states.
…and taking ecological limits into account
The situation is similar regarding the ecological dimension, where only now, during the recovery, the underinvestment in more climate-compatible modes of consumption and production are becoming clearly visible. The iASES is now focussing on the climate targets of the Member States; in doing so it estimates how one would have to invest in order to reduce the CO2 emission limit and not to exceed global warming by two degrees.
This would require investments amounting to trillions. The proposal by the EU Commission for the medium-term financial framework for 2021-2027, “only” provides for an amount of 1.3 trillion euro. In view of the fact that half of the EU’s CO2 emissions are due to energy production and transport and because national potential solutions are limited, here too one can clearly see the inadequacy of the EU budget. Just the request of the EU-Commission in its Annual Growth Survey “to invest early to modernise and decarbonise industry, transport and energy” will not be sufficient.
Focus on well-being in the European Semester necessary
Sustainable wellbeing of current and future generations should be put at the centre of political control within the European Union. The targets for a sustainable development (SDGs) of the UN provide a good basis for steering. Hence, they should therefore not only be decisive for a long-term strategy of the EU until 2030, but also for the annual political steering cycle. Apart from an improved wage development in the Eurozone overall, it requires more attention to social and environmental problems.
Because of the still big differences between individual economies, a better coordination approach would be desirable. This could be achieved by a genuine macroeconomic dialogue, existing non-binding tools, such as integrated guidelines and new binding minimum standards. Apart from that, it is necessary to promote both quantity and quality of employment, to invest in environmental sustainability and to not only discuss distribution issues within or between Member States, but also to defuse these.