News
BackThis year´s Annual Growth Survey (AGS) for the first time emphasises the necessity to deal also with questions of social justice as indicators for economic policy objectives – not only to boost economic growth and convergence, but as an end in itself. Hence, for the first time the Alert Mechanism Report 2016 considered the indicators 'employment rate' and ‘youth and long-term unemployment’. From the AK’s point of view, this is to be welcomed’ however, the main problem lies in the fiscal policy corset, which makes a genuine U-turn and the effective fight against inequality and unemployment impossible. The Commission continues to cling to the Stability and Growth Pact, which renders it impossible for the States to make the urgently required investments. The own-initiative report by the EMPL Committee also praises the introduction of these social policy criteria.
Employment
The draft report interprets the fall in unemployment since 2013 as a success of European economic policy and structural reforms. However, from an AK perspective, this (albeit cautious) optimism is misguided: currently about 23 million EU citizens are unemployed, which corresponds to about 9.9% of the population. If unemployment continues to fall at this rate, it would take until 2020 to reach the level of 2007 again.
The report also states a general commitment to good jobs; however, it does not provide a strategy. The individualised access of the AGS is praised in respect of combating long-term unemployment - even though from the point of view of the AK this access is positive; however, providing individualised support after 18 months of unemployment comes far too late.
Structural reforms
The report underlines the necessity to drive forward investments, structural reforms and responsible budget consolidation, without explaining the relationship of these targets to each other. The strict budgetary discipline is currently the largest obstacle for investments.
The position of the report with regard to the flexicurity approach, which the Commission recommends to create jobs, is uncritical; however, it also demands more labour-law related protection. The AK responds by saying that until now flexicurity has not resulted in creating employment but only led to jobs that are more insecure.
AGS and Committee report demand to shift the tax burden of labour to other pro-business sectors. The AK welcomes the relief of the factor ‘labour’; however, only if reciprocal financing, which is both employee and consumer-friendly, can be guaranteed. To achieve this, the EU-wide minimum taxation of assets would be an important step. In addition, measures against aggressive tax planning and tax evasion, which are mentioned in the AGS, are to be welcomed. What is missing from the AGS is a commitment to a Common Consolidated Corporate Tax Base (CCCTB) with a minimum tax rate and to the Financial Transaction Tax.
Investments
One proposal from the AGS, which is uncritically adopted by the Committee draft report, is that the European Structural and Investment Funds (ESIF) should help to implement country-specific recommendations; however, the AK regards this proposal as a highly problematic attempt to use cohesion policy as a further means of exerting pressure in order to enforce Economic Governance.
However, both the Committee draft report and the AK welcome the proposal of the AGS, Member States should increase social investments.
Social inclusion
The Committee draft report asks the Member States to keep social benefits to a minimum for them not to result in “dependence”; in doing so, it reproduces the fairy-tale of the social hammock. However, it is a proven fact that social benefits paid to those on the lowest income, are spend to a 100% on consumer goods back into the economic cycle, thereby financing themselves. Hence, social benefits, especially to these groups, should not be kept at a minimum, but should be at a level, which enables a dignified life.
On the subject of including refugees, the draft report proposes not to leave financing solely to the Member States; it asks the European Commission to present a strategy for the multi-annual financial framework.
In respect of the aging population, the draft report restricts itself to the general opinion that social security systems can no longer be sustained; however, it does not address an explicit demand for increasing the pension age.
European Semester
Finally, the draft report addresses the European Semester and raises two demands, both of which are welcome from the perspective of the AK: on the one hand, the stronger involvement of national parliaments and the promotion of the social dialogue and the integration of the social partners on the other.
Further information: