Brussels, 27/11/2008 (Agence Europe) - There has been a mixed but generally positive response from political groups and interest groups to the economic recovery plan presented on Wednesday 26 November by the European Commission (EUROPE 9791). They call on member states to endorse the plan.
The European recovery plan is “the right toolbox to tackle the current economic crisis”, welcomed EPP-ED President at the European Parliament Joseph Daul. “Sacrifices cannot be avoided but, together with President Sarkozy and Chancellor Angela Merkel, our group believes that governments have to head off a recessionary spiral”, Mr Daul stressed. “We agree with the Commission's position that a budgetary stimulus should be provided, but not without structural reforms in the member states who should take measures to boost their economies, without increasing their deficits”, the EPP-ED states, adding that this is why it favours the idea of euro-bonds.
Speaking on behalf of the Party of European Socialists (PES), Poul Nyrup Rasmussen considers that the Commission “is going in the right direction” and that “the recovery plan mirrors the proposals made by PES leaders as early as 2005 and most recently earlier this month”. Two elements, however, make the success of the plan uncertain: 1) 1.5% of GDP over two years is certainly not enough (the PES considers it would take 1% of GDP each year over three years); and 2) Angela Merkel and other conservative leaders like Silvio Berlusconi could water down the plan and refuse to make the necessary national investments.
Graham Watson, ALDE President, said “the European Commission proposals contrast with G20 conclusions in Washington which relegated sustainability to a penultimate sub-point in the penultimate point”. Demonstrating “greater awareness of the advantages of green investment and green growth”, the Commission package also reaffirms market economy principles and good budgetary management, ALDE welcomes, calling on the Commission to “resist unnecessary subsidies for industry”.
The mitigated reaction of the Greens-EFA Group welcomes the Commission's new awareness but deplores the fact that the European plan is a “mix of new and old recipes”, a “juggling act of member states”. Co-Presidents Daniel Cohn-Bendit and Monica Frassoni consider, however, that “given the constraints, it is at least a step in the right direction”, and welcome the new financing possibilities and the programmes in favour of innovation in the environmental field and the flexibility of the Stability and Growth Pact. Flexible lending from the European Investment Bank (EIB) for eco-innovation in the automotive sector constitutes, however, a reason for concern, while “automakers are lobbying hard for softer fines for non-compliance” with norms. They went on to call on the EU to “take care not to give the carrot while dropping the stick”.
When it comes to the social partners, satisfaction prevails although some doubt still persists. BusinessEurope, which wonders whether the plan will be sufficient, hopes urgent action will be taken to ensure that companies have access to financing at affordable conditions, and that there will be a further increase in the EU's medium term financial assistance facility for member states facing most severe financing difficulties, above the agreed ceiling of €25 billion. UEAPME welcomes proposals to ensure access to financing by SMEs, speeding up the reduction of VAT rates for labour intensive services and cutting labour taxes at the low end of the wage scale. The organisation deplores the shortcomings in employment support, mainly expressing concern about the consequences for suppliers and subcontractors. The European Trade Union Confederation (ETUC) welcomes the Commission's approach in favour of demand. Calling for rapid and balanced implementation of the plan, ETUC calls for an exceptional tripartite social summit to take place before the European Council.
The recovery plan contains good news for the SMEs in the construction sector (reduced VAT rates), and the European Builders Confederation (EBC) is also pleased. The same is true for the European Telecommunications Network Operators (ETNO), which welcomes inclusion of broad band among the plan's priorities. The European federation for transport and environment (T&F), the environmental organisation that campaigns for sustainable transport, regrets on the other hand that the Commission proposes to distribute public money to the automobile industry via the EIB. And, at the same time, lobbies seek to weaken and postpone the entry into force of new fuel efficiency standards for new vehicles. The Commission has above all not said how it will compel carmakers to use the money to become “greener”, T&E deplores, calling on European leaders to reject the plan. (A.B./transl.jl)