Brussels, 15/03/2012 (Agence Europe) - How can the threat of recession, which often accompanies austerity policy, be avoided? For the European Commission, the not-so-new mantra of competitiveness still needs to be applied. The Commission repeated this message on Wednesday 14 March in response to questions from MEPs on the following themes: austerity and growth, the internal market, free movement and transport.
Austerity and growth. How can these two notions be reconciled? What is the role of social investment in the search for this balance? Certain countries are carrying out of this exercise “with a lot of courage”, pointed out the commissioner for the internal market, Michel Barnier. He is, however, convinced that the time has come to support these efforts by way of a “genuine European growth initiative” through immediate and medium-term measures aimed at promoting job creation. Barnier mentioned “project bonds” as instruments likely to reconcile these two demands and said that courage would be required “to pool the future loans enterprise would need”. The commissioner for transport, Sim Kallas, agreed with Barnier but pointed out that certain member states had misgivings in this connection.
The single market. Barnier confirmed that “the basic platform for the economy of growth is clearly the single market”. Nonetheless, if the single market is really going to work, enterprise and consumers must be able to communicate better and have at their disposal the appropriate financial infrastructure, which really is there to serve the real economy. He referred to the role of insurance, pension funds and banks and explained that “growth has been hampered for four years due to the absence of rules and transparency (…) we are currently re-establishing them”. He concluded that SMEs and consumers must be reconciled with the single market within the context of an “ecosystem” that is more focused on their interests in a single market which is “an area of opportunity and not just one of constraints”.
Free movement. Free movement is a factor within competitiveness but it can also have negative effects for certain member states, particularly in terms of brain drains. It is therefore necessary to ensure that a certain balance is ensured, declared the commissioner for employment, Laszlo Andor, who referred to facilitating the return of workers to their countries of origin.
Transport. Kallas considers that improving transport infrastructure, particularly in “new member states” is both a challenge and an opportunity. Nevertheless, the cross-border character of efforts required to pursue this aim must be maintained and possibly backed up by national level contributions and private finance. Next week, the Commission will oppose any “watering down” of these projects, when it speaks at the Transport Council.
Individual cases. The specific situation in certain countries, especially Greece, requires particular effort. Andor referred to the effort made by the Commission's taskforce to facilitate the return of competitiveness in Greece, whilst recognising the importance of the sacrifices being made by the Greek people. Barnier confirmed the exceptional situation and exceptional measures required but said that Greece had some real advantages with which to play - its tourism, maritime economy and agricultural capacity. He considered that if the internal market works appropriately, this country will be able to identify the building blocks for its recovery.
Andor alluded to the case of the Spanish Basque country and pointed out that in this region, unemployment was less than half the level of the Spanish average. He underlined the close relationship between vocational training and labour market requirements.