Brussels, 26/11/2015 (Agence Europe) - The annual growth review of the European Commission, which was unveiled on Thursday 26 November, recommends socio-economic policies inspired by the usual triad of investment, structural reforms and responsible budgetary consolidation.
Against a backdrop of a downturn in growth in the emerging countries and geopolitical tensions, the economies of the EU need to be made more resilient and greater upwards convergence is required, said the Commissioner for the Euro, Valdis Dombrovskis.
For 2016, the three key socio-economic policy priorities are the same as in 2015. “The absolute top priority is investment. This is what penalises growth”, said the Commissioner for Economic and Financial Affairs, Pierre Moscovici. The 'Juncker' plan, which is designed to attract an additional €315 billion in investments, needs to be fully up and running and a regulatory environment conducive to investment to be set in place. The second priority is the continuation of structural reforms. “This will involve increased productivity through flexible and protective employment markets, together with effective and sustainable social protection systems. This also implies more competitive and integrated markets for products and services, which are capable of stimulating innovation and the creation of jobs”, Dombrovskis said. He went on to say that “responsible” consolidation policies for public finances is still in third place in the Commission's priorities, with a need to bring down the average budgetary deficit of the eurozone to 1.7% of GDP in 2016.
In its autumn economic forecasts, the Commission predicts growth of 1.6% of GDP in the eurozone and growth of 1.9% in the EU of 28 in 2015. For 2016, wealth creation is expected to stand at 1.8% in the EU of 19 and 2.0% at EU level (see EUROPE 11425).
Technical support for structural reforms. To help any member states which so require, the Commission on Thursday adopted a proposed regulation bringing in a technical assistance programme for the creation and implementation of structural, administrative and institutional reforms. By means of this programme, which will have a budget of €143 million, our intention is to allow all member states to receive the technical support we are already providing to Greece and Cyprus, Dombrovskis explained.
It is worth noting that for the first time, the Commission has brought forward the presentation of its recommendation for the whole of the eurozone. The aim is for the Nineteen to take this into account when adopting their 2016 budgets, on which the Eurogroup has just returned its opinions (see EUROPE 11437). In addition to the three key priorities already listed, the recommended measures include the gradual reduction of non-performing bank loans and the improvement of insolvency proceedings for companies and individuals, for instance by restructuring a proportion of the excessive private debt.
Employment taking off, but remains shaky. On Thursday, the Commission presented the draft joint report on employment for 2016, in which it takes stock of a social situation which is largely similar to the economic situation. Employment in the social situation are getting better, but slowly, and largely due to the increase in the number of fixed-term employment contracts.
One point of concern is that disparities between the member states and inside them continues for the creation of jobs, long-term unemployment and youth unemployment. Even worse, these disparities increase for living conditions. Hence the great emphasis laid by the Commissioner for Employment and Social Affairs, Marianne Thyssen, on the need to promote “upwards convergence” between the member states. In order to achieve this, the Commission has pledged a combination of flexibility and security in reforms of the employment markets, measures which are felt to be indispensable. Fighting illegal employment, reducing the tax pressure on employment, investing in human resources and modernising the social protection systems are the approaches to be focused on. (Original version in French by Mathieu Bion with Jan Kordys)