There are first signs of a change in economic policy. However, it does not go far enough.

In a joint meeting of the European Economic and Social Committee and the Committee on Employment and Social Affairs, the recently presented Annual Growth Survey 2017 was discussed this week. Participants of the debate were EU Commissioners Valdis Dombrovskis (Euro and Social Dialogue), Marianne Thyssen (Employment, Social Affairs, Skills and Labour Mobility) and Pierre Moscovici (Economic and Financial Affairs, Taxation and Customs). The Annual Growth Survey 2017 includes a demand by the EU Commission for a more expansive fiscal policy. What this means for the economy and employees was discussed by the three EU Commissioners and MEPs.

All three EU Commissioners argued for a realignment of fiscal policy, which demands public investments of 0.3% to 0.8% of GDP. Pierre Moscovici is clear in his opinion that countries that have room for manoeuvre regarding their fiscal policy, should use it to ensure stability for the Eurozone. Dombrovskis agrees that this is the appropriate strategy to counteract macroeconmic imbalances. Furthermore, Thyssen argued that the employment rate of 75% set out in the EU 2020 Strategy would be achievable if one would focus on activation regarding active labour market policy. However, the debate clearly showed that the Council does not support a deviation from austerity policy, but continues to insist on a “neutral” fiscal policy.

Alternative Annual Growth Survey 2017

However, the EU Commissioners also pointed out that one would continue to adhere to the Three Pillar Strategy “Investments – Structural Reforms – Fiscal Responsibility”, which would not indicate a fundamental policy shift. A continuation of the current policy would mean that the unemployment rate according to current prognoses would reach its pre-crisis level only in 2023. That is why active demand management based on expansive fiscal policy represents a key issue of the so-called Alternative Annual Growth Surveys 2017 (in which the AK played a leading role) to tackle the weak economic growth and the high unemployment rate consequently.

Hence, the EU Commission Proposal does not go far enough. The criteria set by the EU Commission are so narrow that the proposed more expansive course would currently only apply to Germany and The Netherlands. The remaining Eurozone would have to submit to a restrictive policy of cutbacks. Thus, one is still far from a “Golden Investment Rule”, which would be necessary for an economic boost and which has been demanded by AK and trade unions.

What is also needed is a more expansive wage policy in order to sustainably strengthen domestic demand. Increased demand would give companies, even without complex support systems such as the EFSI or Juncker Plan a clear incentive to invest again and to create jobs.

Apart from that, the social dimension in the European Union must be strengthened by embedding social rights. These must take clear legal priority over economic freedoms. AK and trade unions clearly say: “Social Rights First!” Until the end of the year, it is possible to quickly and easily make one's voice heard for a social Europe here, to ensure that the EU Commission listens to employees.

Further information:

Alternative Annual Growth Survey (English)

Campaign: Social Rights First!