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BackA short while ago, the European Commission published its “Annual Growth Survey 2015”, thereby presenting its ideas for the European economic and financial policy. However, the economic assumptions, on which the annual analysis by the Commission is based, as well as the formulas shown therein, are neither objective, nor without alternative. In order to emphasize this, the so-called “Independent Annual Growth Survey” was presented in Brussels this week for the third time (after 2012 und 2013). A remarkable first this year: for the first time, the AK with its economy expertise is also on board as an official cooperation partner.
At 1.3 % for 2015 and 1.6 % for 2016, the three research institutes OFCE (Paris), IMK (Düsseldorf) and ECLM (Copenhagen), which drew up the “Independent Annual Growth Survey” in cooperation with AK experts Marterbauer, Feigl, Rehm and Schnetzer, forecast - similar to the European Commission - moderate growth for the Eurozone at best. It is therefore not surprising that the experts are not able to recognize a trend reversal when it comes to the historically high unemployment rate (still not under 10 % in the Eurozone in 2016), should the current economic orientation remain.
The main reason that the Eurozone - in contrast to other economic regions, for example the USA - is still stagnating and that unemployment is getting an even tighter grip, is the failed budget policy, which was forced onto the Member States by the EU under the aegis of Germany. This austerity policy prevents necessary public investments and slows down growth. Austria too, which at 0.7 % only grew very moderately in 2014, has not been spared from the effects of this policy, which impacts Europe in waves. Another impediment is the still ongoing increasing concentration of wealth in the Eurozone. The sad result: Austria is the European Champion when it comes to wealth inequality.
Hence, the “Independent Annual Growth Survey 2015” demands a change of direction for European economic policy. Even though the €315 billion investment plan introduced by new Commission President Juncker would recognise the necessity of a change of direction, it was only a drop in the ocean. Even the leverage ratio of 15 to 1 assumed by Juncker (1 part of public capital attracts 15 parts of private capital) is described as “wishful thinking” by the authors.
The ways out of the self-inflicted paralysis, which are proposed by alternative economic practices, are in accord with long-term demands by AK and ÖGB. Bursting the narrow corset of the fiscal pact, which threatens to suffocate the Eurozone; at least, however, finally embedding the “golden investment rule”, which exempts public future investments from the calculation of the Maastricht criteria. And to boost private demand by easing the tax burden for lower income groups keen on spending and to raise taxes for the upper groups who favour saving.
Further information:
The Independent Annual Growth Survey 2015
The main reason that the Eurozone - in contrast to other economic regions, for example the USA - is still stagnating and that unemployment is getting an even tighter grip, is the failed budget policy, which was forced onto the Member States by the EU under the aegis of Germany. This austerity policy prevents necessary public investments and slows down growth. Austria too, which at 0.7 % only grew very moderately in 2014, has not been spared from the effects of this policy, which impacts Europe in waves. Another impediment is the still ongoing increasing concentration of wealth in the Eurozone. The sad result: Austria is the European Champion when it comes to wealth inequality.
Hence, the “Independent Annual Growth Survey 2015” demands a change of direction for European economic policy. Even though the €315 billion investment plan introduced by new Commission President Juncker would recognise the necessity of a change of direction, it was only a drop in the ocean. Even the leverage ratio of 15 to 1 assumed by Juncker (1 part of public capital attracts 15 parts of private capital) is described as “wishful thinking” by the authors.
The ways out of the self-inflicted paralysis, which are proposed by alternative economic practices, are in accord with long-term demands by AK and ÖGB. Bursting the narrow corset of the fiscal pact, which threatens to suffocate the Eurozone; at least, however, finally embedding the “golden investment rule”, which exempts public future investments from the calculation of the Maastricht criteria. And to boost private demand by easing the tax burden for lower income groups keen on spending and to raise taxes for the upper groups who favour saving.
Further information:
The Independent Annual Growth Survey 2015