Brussels, 02/03/2012 (Agence Europe) - Under less pressure than usual from the economic crisis, Europe's leaders were able on Thursday 1 and Friday 2 March to focus, for the first time in two years, on measures to stimulate growth and jobs. The European summit has issued a roadmap for the June European summit, setting out action to be taken at EU level with a tangible outcome in the member states. It has pledged to continue to clean up public finance and take key measures to stimulate growth and jobs which, if they are to be sustainable, cannot be based on deficits or excess levels of debt.
The easing of pressure on some levels, particularly the euro, makes it possible to focus on measures to encourage growth in the short and medium-term, explained President of the European Commission José Manuel Barroso, after what he described as a drama-free summit. This idea was echoed by Italian Prime Minister Mario Monti, who said that for the first time in two years, the European summit had not been dominated by the financial crisis, but instead by measures to encourage growth and jobs. He welcomed the fact that this subject matter had led to a tangible action plan and detailed commitments. French President Nicolas Sarkozy said the financial crisis was becoming a thing of the past, but was not over yet.
The European summit agreed with the ideas set out in a letter recently by 12 member states, explained the president of the European Council, Herman Van Rompuy. The letter calls for a European Action Plan for Growth, focusing on conclusion of the single market and reforms of national labour markets (see EUROPE 10557). Sarkozy said that Merkel and he had agreed with 85-90% of the issues set out in the letter, but had rejected the remaining 10-15%, for example a new services directive and deregulation attempts by the British and Swedes. Sarkozy said he had told David Cameron that the ideas included a liberal push which Sarkozy could not go along with.
Consolidating the single market. The European summit said that time was running out for conclusion of the single market, wanting to move to the next stage by boosting internal market governance. Peer pressure is supposed to encourage member states to get more involved. In June 2012, the European summit will be able to make a better assessment of this based on information from the European Commission and progress with the Services Directive, but France has already opposed any new proposals. The EU27 want the digital internal market to be completed by 2015, by improving consumer confidence in online transactions and expanding high speed internet connections. The summit called for effort to reduce national and EU red tape, lift trade barriers, improve access to the market and improve investment conditions.
Taking on the financial world. The heads of state and government have set clear deadlines for completing the reform of the financial industry. Bank funding requirements are expected to be agreed upon by June 2012 and financial instrument market rules by the end of the year. In June 2012, agreement is expected on bonds.
The European summit says that adjustments are needed in the near future to the credit rating agency regulation, and recommends greater bank capital requirements without excessive deleveraging. The EU27 governments want faster progress on the Commission's draft legislation to introduce a financial transaction tax (discussed on 13 March by EU finance ministers), a common basis for company taxation and the savings tax directive.
R&D and energy. The European summit says that science must serve European market needs. This is a key for France, which wants to see a transformation of research to boost business-friendly innovation. The German chancellor, Angela Merkel, said that 3% of GDP for R&D remains a key target for the future. The summit called for the European patent to be decided upon by June, along with agreement on the Energy Efficiency Directive. The summit says the third package of energy legislation is required to improve cross-border energy grids.
How to create jobs. The question of jobs and unemployment (the latter reached a record high in January, standing at 10.7% for the eurozone) was discussed at length. The summit decided that the key target, set out in the EUROPE 2020 strategy, was to reach employment levels of 75% by 2020. Governments are asked to make use of existing systems, such as National Reform Programmes, to tackle youth unemployment, which currently averages 22% in the EU27. The leaders say detailed, practical and measurable commitments must be introduced. In order to create new jobs, three approaches are recommended: (1) encouraging employers to hire by improving pay levels if necessary; (2) removing obstacles to the creation of new jobs; and (3) introducing active job search programmes for young people, women and the elderly.
Twelve-country letter. Compared with an earlier version of the conclusions document dated 27 February, the heads of state decided to add a reference to the need to make progress in the mutual recognition of professional qualifications by reducing the number of regulated professions and scrapping unjustified rules. This was greatly welcomed by the British prime minister, David Cameron, who said that the labour market needed to be deregulated with support from the EU, irrespective of member states' social models. He said after the summit that this was an important measure to restore economic growth. The measures negotiated at the summit were set out in a letter on Monday 20 February 2012 by Spain, Estonia, Finland, Ireland, Italy, Latvia, the Netherlands, Poland, the Czech Republic, the United Kingdom, Slovakia and Sweden, which called for reform of national labour markets (see EUROPE 10557). Polish Prime Minister Donald Tusk said that the existence of the main issues raised in the letter in the summit conclusions document was more important than one might have imagined a few hours before, and everyone had been enthusiastic about the conclusions document.
Taxation. To boost growth and ensure healthy national budgets, the member states have agreed to re-examine their taxation system to make them more efficient, remove unjustified tax relief, levy tax more widely and reduce tax pressure on labour by collecting tax more effectively and clamping down on tax evasion. This recommendation is aimed in particular at a number of member states, as Italian Prime Minister Mario Monti pointed out, mentioning Greece. To make the battle against tax evasion effective, it must involve non-EU countries, particularly Switzerland, he said, calling for joint EU action rather than country-specific measures.
The German chancellor, Angela Merkel, said that the impact of the austerity measures and growth policies varied widely from one country to another, but said that the effectiveness of the new approach would be demonstrated in June 2012 when the Commission's first recommendations were published. The recommendations will be adjusted to match the situation of the member states, following on from the National Reform Programmes that governments must submit to the Commission on 13 April 2012, including decisions by the Spring European Council. (MD/JK with AN/FG/EH /SP/transl.fl)