Report - A9-0036/2021Report
A9-0036/2021
European Parliament

REPORT on the European Semester for economic policy coordination: Annual Sustainable Growth Strategy 2021

5.3.2021 - (2021/2004(INI))

Committee on Economic and Monetary Affairs
Rapporteur: Markus Ferber
Rapporteur for opinion (*): Margarida Marques, Committee on Budgets
(*) Associated committee – Rule 57 of the Rules of Procedure


Procedure : 2021/2004(INI)
Document stages in plenary
Document selected :  
A9-0036/2021
Texts tabled :
A9-0036/2021
Debates :
Votes :
Texts adopted :

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the European Semester for economic policy coordination: Annual Sustainable Growth Strategy 2021

(2021/2004(INI))

The European Parliament,

– having regard to the Treaty on the Functioning of the European Union (TFEU), in particular Articles 121, 126 and 136 thereof and Protocol No 12,

– having regard to Protocol No 1 on the role of national parliaments in the European Union,

– having regard to Protocol No 2 on the application of the principles of subsidiarity and proportionality,

– having regard to the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union,

– having regard to Regulation (EU) No 1175/2011 of the European Parliament and of the Council of 16 November 2011 amending Council Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies[1],

– having regard to Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States[2],

– having regard to Regulation (EU) No 1174/2011 of the European Parliament and of the Council of 16 November 2011 on enforcement measures to correct excessive macroeconomic imbalances in the euro area[3],

– having regard to Council Regulation (EU) No 1177/2011 of 8 November 2011 amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure[4],

– having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances[5],

– having regard to Regulation (EU) No 1173/2011 of the European Parliament and of the Council of 16 November 2011 on the effective enforcement of budgetary surveillance in the euro area[6],

– having regard to Regulation (EU) No 473/2013 of the European Parliament and of the Council of 21 May 2013 on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area[7],

– having regard to Regulation (EU) No 472/2013 of the European Parliament and of the Council of 21 May 2013 on the strengthening of economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect to their financial stability[8],

– having regard to the Commission communication of 20 March 2020 on the activation of the general escape clause of the Stability and Growth Pact (COM(2020)0123),

– having regard to the Commission communication of 27 May 2020 entitled ‘Europe’s moment: Repair and Prepare for the Next Generation’ (COM(2020)0456),

– having regard to the Commission communication of 27 May 2020 on the EU budget powering the recovery plan for Europe (COM(2020)0442),

– having regard to the Commission proposal of 28 May 2020 for a Council Regulation establishing a European Union Recovery Instrument to support the recovery in the aftermath of the COVID-19 pandemic (COM(2020)0441),

– having regard to the Commission communications of 17 September 2020 entitled ‘Annual Sustainable Growth Strategy 2021’ (COM(2020)0575) and of 18 November 2020 entitled ‘Alert Mechanism Report 2021’ (COM(2020)0745),

– having regard to the European Fiscal Board annual report of 29 October 2019, the European Fiscal Board statement of 24 March 2020 on COVID-19 and the European Fiscal Board’s assessment of 1 July 2020 of the fiscal stance appropriate for the euro area in 2021,

– having regard to the interinstitutional agreement of 16 December 2020 on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources[9],

– having regard to the Commission’s European Economic Forecast: Winter 2021 (Institutional Paper 144)[10],

– having regard to the European Council recommendations of 10-11 December 2020 on the MFF and Next Generation EU, COVID-19, climate change, security and external relations (EUCO 22/20),

– having regard to Rule 54 of its Rules of Procedure,

– having regard to the opinions of the Committee on Budgets and the Committee on the Environment, Public Health and Food Safety,

– having regard to the letter from the Committee on Regional Development,

– having regard to the report of the Committee on Economic and Monetary Affairs (A9-0036/2021),

A. whereas the European Semester plays an essential role in coordinating economic, budgetary and employment policies in the Member States, which serves to ensure sound public finances, to prevent excessive macroeconomic imbalances, to support structural reforms and to boost investment, and currently represents the framework used to guide the Union and the Member States through the challenges of the recovery based on the EU’s policy priorities; whereas since the 2008 sovereign debt crisis, the Union is much more robust to face crises, but new challenges to macroeconomic stability are emerging;

B. whereas the Union and its Member States have committed to the Treaty-based fundamental values, the implementation of the UN 2030 Agenda, the European Pillar of Social Rights (EPSR) and the Paris Climate Agreement;

C. whereas aspects relating to the possible future of the EU fiscal framework will be dealt with by the review of the macroeconomic legislative framework in the own-initiative report of the European Parliament dedicated to that issue; notes that the framework will be reviewed, and should be adapted according to its outcome;

D. whereas the employment and social aspects of the Annual Sustainable Growth Strategy (ASGS) are dealt with by the twin report entitled ‘European Semester for economic policy coordination: Employment and Social Aspects in the Annual Sustainable Growth Strategy 2021’;

E. whereas high levels of public debt may represent a heavy burden on future generations’ shoulders and drag on the recovery;

F. whereas the pandemic has hit all Member States, creating a symmetrical shock, but the scale of the impact, specific economic exposures and initial conditions, as well as the pace and the strength of the recovery will vary significantly;

G. whereas the good times need to be used to implement structural reforms, in particular measures aimed at reducing budget deficits, government debt and non-performing loans and to prepare for another possible economic crisis or recession;

H. whereas women have been disproportionately affected as a result of the crisis and the proposed recovery response addresses the challenges related to the COVID-19 crisis in the care sector and the specific challenges faced by women;

I. whereas Member States have taken sizeable fiscal measures in response to the pandemic (4.2 % of GDP in 2020 and 2.4 % of GDP in 2021); whereas output in the European economy would barely return to pre-pandemic levels in 2022;

J. whereas the recovery and resilience plans adopted by the Member States will encompass their national agenda of reforms and investments designed in line with the EU policy objectives, centred, among others, on the green and digital transitions;

I. COVID-crisis, Recovery and Resilience Facility, temporary adjustment of the Semester

1. Takes note of the fact that the European Semester and the Recovery and Resilience Facility are closely intertwined; notes that the assessment of the recovery and resilience plans (RRPs) will be made against the priorities identified in the Facility and the implementation of the relevant country-specific recommendations; invites the Commission to scrutinise the plans thoroughly in order to ensure that the recovery generates European added value, improves Member States’ long-term competitiveness and sustainable growth prospects, and guides European economies to address the challenges and reap the benefits of the green and digital transitions, the EPSR and UN Sustainable Development Goals (SDGs);

2. Welcomes, furthermore, the rapid and intense initial response to the crisis in the area of monetary and fiscal policy, at both EU and Member State level, as well as the adoption of the next MFF and Next Generation EU (NGEU); calls on the Commission and the Council to accelerate the implementation of the Recovery and Resilience Facility in order for funding to be disbursed quickly; stresses that, in order to be successful, the climate and digital transitions must have the social and single market dimensions at their core; insists that funds and resources be directed to projects and beneficiaries that spend the resources responsibly, effectively and on viable, sustainable projects that generate the highest possible impact; recalls the role the European Parliament will play in the Recovery and Resilience dialogue established by the RRF Regulation; by this, recalls that the European Parliament also scrutinises the link between the European Semester and the RRF;

3. Highlights that the goal of the Recovery and Resilience Facility is to make Member States’ economies and societies more resilient, while striving for competitive sustainability, convergence and cohesion within the EU; emphasises that national ownership and transparency will be essential elements for the swift and successful implementation of the Recovery and Resilience Facility and the recovery plans; considers it essential, therefore, for debates to be held in national parliaments, for the Commission to cooperate with the national authorities and relevant stakeholders proactively in order to discuss the draft national plans at an early stage, making tailor-made solutions and specific reforms possible;

4. Welcomes the fact that in order to cope with the unprecedented crisis caused by COVID-19, the Member States and the EU institutions established NGEU in order to help the recovery; notes, therefore, that the RRF creates a unique opportunity for delivering on the reforms and investments needed for the EU to get ready to cope with the present challenges;

5. Believes that the symmetrical effects of COVID-19 have actually widened the socio-economic rift between EU Member States and their regions;

6. Further notes that the deadlines of the European Semester and the Recovery and Resilience Facility will overlap, which requires the temporary adjustment of the Semester process in order to properly launch the Recovery and Resilience Facility; stresses that the EU’s recovery provides a unique opportunity to provide guidance to Member States on where reforms and investments are most needed in order to accelerate the transition to a more sustainable, resilient and inclusive EU;

7. Supports the Commission’s guidance to Member States to include in their RRPs investments and reforms in flagship areas that are in line with the EU’s objective of just climate and digital transitions;

8. Considers that the four dimensions of social and environmental sustainability, productivity, fairness and macroeconomic stability identified in the 2020 ASGS should remain the guiding principles underpinning Member States’ recovery and resilience plans; recalls that in order to ensure transparency, the Commission will transmit the national recovery and resilience plans drawn up by Member States to both the Council and the European Parliament simultaneously;

9. Underlines that the Regulation establishing the Recovery and Resilience Facility recognises that women have been particularly affected by the COVID-19 crisis, as they represent the majority of healthcare workers across the Union and balance unpaid care work with their employment responsibilities;

10. Considers that the temporary adaptation of this year’s cycle cannot override the original purpose and function, and must not impede the further evolution of the European Semester; recalls that the European Semester cycle is a well-established framework for EU Member States to coordinate their budgetary, economic, social and employment policies, and after the COVID-19 crisis, a functioning European Semester will be needed more than ever to coordinate these policies across the European Union, but also notes that the Semester, since the inception, has been expanded to include, among others, issues related to the financial sector and taxation, as well as objectives of the UN SDGs in the European Semester, giving due consideration to the people of our planet in our economic policy; notes that in order to further strengthen economic and social resilience, the EU must deliver on the principles of the EPSR; recalls that promoting stronger and sustainable growth in a sustainable manner means promoting responsible fiscal policies, structural reforms, effective investment, digital transformation and green and just transitions; invites the Member States and the Commission to strike a proper balance between boosting sustainable, growth-friendly public and private investment and structural reforms in the recovery plans;

11. Believes that the 2021 European Semester exercise offers a great opportunity to improve national ownership, given that Member States are developing tailor-made RRPs to respond to their different needs; in this regard, is convinced that democratic legitimacy must be guaranteed and eventually increased, including the proper role of the European Parliament in the implementation of the Facility, as enshrined in the Regulation establishing the Recovery and Resilience Facility; calls on the Member States to build up, using, if necessary, the Technical Support Instrument, the necessary administrative and monitoring capacity to provide firm guarantees of the proper and efficient use of funds, as well as a high level of absorption capacity; recalls that RRPs are subject to the horizontal requirements of sound economic governance and the general regime of conditionality for the protection of the Union budget;

II. Economic prospects for the EU

12. Notes with great concern the extremely difficult situation EU economies find themselves in and that, according to the Commission’s Winter 2021 economic forecast, GDP fell by an unprecedented rate in both the euro area and the EU as a whole; notes that EU GDP has contracted by 6.3 % (6.8 % in the euro area) in 2020, whereas an economic recovery of 3.7 % (3.8 % in the euro area) is forecast in 2021;

13. Highlights that the unprecedented economic recession in 2020 and the measures taken in response to the pandemic are set to push the EU debt-to-GDP ratio up to a new peak of around 93.9 % (101.7 % in the euro area) in 2020, with a further forecasted increase to around 94.6 % (102.3 % in the euro area) in 2021; highlights that a high level of uncertainty persists and that the economic outlook very much depends on how quickly the pandemic can be overcome; understands, furthermore, that these debt levels can be sustained by sufficient economic growth; reiterates the importance of the long-term sustainability of sovereign debt; notes that many Member States have entered the current crisis in a weak fiscal position, which is being further worsened by the pandemic;

14. Is concerned about the remarkably negative impact of the COVID-19 pandemic on the EU’s economy, particularly on small and medium-sized enterprises (SMEs), the single market and its competitiveness and underlines the importance of the implementation of the European Green Deal, the EPSR and the UN SDGs; believes, therefore, that  coordination of the Member States’ actions is, among others, an essential tool for reducing the mentioned negative impact; is of the opinion that if the EU cannot provide an adequate response to this current crisis, then both the euro area and the EU as a whole risk falling further behind with the realisation of the goals of environmental sustainability, competitiveness, productivity, fairness and macroeconomic stability;

15. Reiterates the importance of safeguarding the level playing field in the single market, while taking into account the physical characteristics faced by insular, peripheral, and sparsely populated regions of the EU and the situation of the EU’s least developed regions, which is a necessary precondition for fostering, among other things, the digital transformation and the green and just transitions, innovation and accelerating the recovery and competitiveness;

16. Calls for a better implementation of responsible public finances, socially balanced structural reforms improving long-term prospects and high-quality and efficient public and private investment, among others, to realise the green and digital transitions;

17. Is concerned about the impact of the pandemic containment measures on the low productivity growth in the EU and the pronounced decline of productivity growth in the euro area before the pandemic; is of the opinion that a balanced strategy to promote sustainable growth and an investment-friendly environment should be pursued, while improving fiscal sustainability; stresses that special emphasis should be placed on future-oriented investments and policies, especially by those Member States that have the fiscal space to invest in order to promote sustainable and inclusive growth;

18. Welcomes the European Green Deal as the EU’s new sustainable growth strategy bringing together four dimensions: the environment, productivity, stability and fairness, enabled by digital and green technologies, an innovative industrial base and strategic autonomy;

III. Responsible fiscal and sustainable policies

19. Notes that although there are new challenges regarding macroeconomic stability, the Economic and Monetary Union is in a much better position to face crises than it was during the 2008 financial and economic crisis; is convinced that promoting resilient and sustainable economic recovery in line with the EU’s policy objectives, centred around the green, just and digital transitions, is one of the most important immediate priorities; notes that the means to overcome the current crisis are of a nature, which requires – for as long as necessary – expansionary fiscal policy;

20. Points out that those Member States that had fiscal buffers were able to mobilise fiscal stimulus packages at a much faster pace and without associated borrowing costs, which has helped to mitigate the negative socio-economic effects of the pandemic; reiterates that replenishing fiscal buffers over time, in a socially responsible manner, will be important for preparation for future crises; however, urges Member States, the Commission and the Council not to repeat mistakes of the past in response to the economic crisis; shares the view of the European Fiscal Board that rapidly reversing the fiscal stance is not advisable for recovery;

21. Notes the fact that the Commission intends to make recommendations on the budgetary situation of the Member States in 2021, as envisaged under the Stability and Growth Pact; points out that the economic governance framework should also look at current economic realities and be coherent with the EU’s policy priorities, while at the same time improving compliance with fiscal rules, which should be simplified, clear and practical, and are going to be reviewed, and according to the outcome, adapted; calls for a more pragmatic approach and underlines the need to ensure that the framework is stricter in good economic times and more flexible in bad economic times;

22. Without prejudice to the outcome of the discussions on the reform of the Growth and Stability Pact, highlights that the current EU fiscal and budgetary rules provide the flexibility needed in times of crisis, through the activation of the general escape clause under the Stability and Growth Pact and allow all Member States to adopt the fiscal stance necessary to protect the EU’s economies, thereby demonstrating extraordinary counter-cyclicality;

23. Expects that the general escape clause will remain activated as long as the underlying justification of the activation exists in order to support the efforts of the Member States to recover from the pandemic crisis and strengthen their competitiveness, as well as economic and social resilience; invites the Commission to issue guidance, in spring 2021, in relation to the path forward and provide more clarity on the expected timing of an exit from the general escape clause;

24. Without prejudice to the outcome of future discussions on the reform of the Stability and Growth Pact, underlines that, at present, all Member States are obliged to comply with the Stability and Growth Pact; acknowledges that the general escape clause suspends neither the procedures of the Stability and Growth Pact, nor the EU’s fiscal rules; recalls that the general escape clause allows Member States temporarily to depart from the adjustment path towards the medium-term budgetary objective, provided that this does not endanger fiscal sustainability in the medium term;

25. Calls on the Commission to act decisively in order to tackle tax fraud, tax avoidance and evasion, as well money laundering issues, which drain potential resources from national budgets and hampers governments’ capacity to act, among others, for the recovery from the COVID-19 pandemic;

26. Notes the fact that, by the end of April 2021, the Commission intends to perform in-depth reviews assessing the state of play of imbalances for selected Member States; further notes that a number of existing macroeconomic imbalances are being aggravated by the COVID-19 crisis;

27. Recalls the urgent need to complete and reinforce the Economic and Monetary Union architecture by completing the Banking Union and the Capital Markets Union, with a view to protecting citizens and reducing pressure on public finances during external shocks so as to overcome social and economic imbalances;

IV. Growth-enhancing, balanced and sustainable structural reforms

28. Is aware that the COVID-19 crisis  will not  be solved by the current fiscal stance alone; underlines, therefore, the importance of implementing deep, growth-enhancing, balanced and sustainable and socially just, tailor-made structural reforms to deliver on, among other things, sustainable and socially inclusive growth and jobs, which can support the recovery efficiently, as well as supporting the digital transformation and green transition, quality employment, reduction of poverty, and the UN SDGs, and can boost competitiveness and the single market, increasing convergence and stronger and sustainable growth within the Union and the Member States; points out that the long-term growth potential of Member States’ economies in particular can only be  enhanced by structural improvements; notes, however, that the effectiveness and success of the alignment of Member States’ policy measures will depend on the review of the Stability and Growth Pact and, according to outcome thereof, its adaptation, as well as increased ownership by the Member States of the implementation of the country-specific recommendations;

29. Calls on the Commission to start working on the creation of a climate indicator to assess the discrepancy between the structure of Member States’ budgets and the Paris-aligned scenario for each of their national budgets; stresses the need for this indicator to provide Member States with information on their trajectory within the framework of the Paris Agreement in order to ensure that Europe is able to become the first climate-neutral continent by 2050; expects the climate indicator to be a reference for the EU’s various policies and thus also to be used as a guide for the European Semester, without watering down its original purpose;

30. Is of the opinion that developing digital skills is a precondition to ensure that all Europeans are able to participate in society and reap the advantages of the digital transition; points out that it requires reforms in the area of education, skills and also lifelong learning to steer a labour market in transition and to develop and enable key digital technologies and build Europe’s digital future; further points out that equality in cross-cutting access to digital infrastructure, equipment and skills should be supported in order to prevent a digital divide;

31. Calls on the Member States and the Commission, while respecting fiscal sustainability and sound budgetary rules, to create a regulatory framework, including investment rules or other adequate mechanisms, that are predictable and supportive of public and private investments in line with the EU’s long-term objectives, while ensuring Member States’ ability to respond to future crises;

32. Takes note that the Member States are encouraged by the Commission, within the context of the Recovery and Resilience Facility, to submit their National Reform Programmes and their RRPs in a single integrated document;

33. Highlights that the Recovery and Resilience Facility, providing financial support, can be a unique opportunity to help Member States address their challenges identified in the framework of the European Semester;

34. Recalls that socially balanced, growth-friendly structural reforms do not always require fiscal space, but rather political, legislative and administrative efforts;

35. Highlights that continuous monitoring and vigilance will be needed and Member States should address emerging imbalances through reforms that enhance economic and social resilience and promote the digital transformation and green and just transitions; is pleased that the Commission will continue to monitor implementation by Member States of reforms proposed in previous years’ country-specific recommendations; considers that this process should take into account the economic and social outlook of the Member States;

V. Investment

36. Stresses that the EU faces the unprecedented challenge of mitigating the economic consequences of the pandemic, taking into account EU strategies with a view to having a lasting impact on the resilience of the Member States, and believes that the economic recovery should be conducted through strengthening the single market, research and innovation, and in accordance with European Green Deal, the UN SDGs, the implementation of the EPSR and competitiveness, while alleviating the situation of SMEs and improving their access to private capital; is convinced that this requires both an increased level of economically, socially, environmentally and digitally viable  investment in the long term and enhanced convergence and cohesion in the EU and the Member States;

37. Stresses the lack of investment, as projections reveal the need for an expansion of investment; highlights that public investments are limited, as they represent scarce resources mostly funded by the taxpayers; points out that the size of the investment gap also requires sizeable private and public investments, generating an adequate level of infrastructure, as well as a predictable and favourable business environment that is conducive to such investments;

38. Stresses that the Member States should focus on targeted, sustainable public and private investment in future-proof infrastructure and other areas that further strengthen the single market, the transition to a cleaner, socially inclusive, sustainable and digital society and increase the EU’s competitiveness and strategic autonomy; is of the opinion, therefore, that cross-border and multi-country projects are to be prioritised;

39. Underlines the need to adopt investment-friendly policies, reduce administrative burden and guarantee a level playing field, in particular for SMEs, which constitute the backbone of the EU economy and job creation; considers that all this  would both facilitate economic recovery and create conditions advantageous to long-term growth;

VI. A more democratic European Semester

40. Highlights the importance of full debate and the proper involvement of national parliaments and the European Parliament in the process of the European Semester; reiterates its call for the strengthening of the European Parliament’s democratic role in the economic governance framework, and calls on the Council and Commission to take due account of the resolutions adopted by parliaments; invites the Commission to keep both the European Parliament and the Council, as co-legislators, equally well informed on all aspects relating to the application of the EU economic governance framework, including on the preparatory stages;

41. Calls for committed coordination with social partners and other relevant stakeholders at both national and European level, with a view to strengthening democratic accountability and transparency;

42. Underlines the important role of the Committee on Economic and Monetary Affairs in taking action with a view to improving accountability to Parliament, as the experience accumulated so far in applying the European Semester has shown that the current accountability set-up could be enhanced in order to improve its legitimacy and effectiveness;

43. Recalls  that the European Semester is a mixed exercise consisting of the so‑called, national and European semesters over the year; recalls the importance of the principles of subsidiarity and proportionality;

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44. Instructs its President to forward this resolution to the Council and the Commission.


EXPLANATORY STATEMENT

As a separate own initiative report is dedicated to the possible future of the EU fiscal framework, and as employment and social aspects of the ASGS are dealt with by the twin EMPL report, this ECON report on the European Semester for economic policy coordination: Annual Sustainable Growth Strategy 2021 does not wish to cover these issues. In the ECON report the rapporteur wishes to focus on topics that are specifically within ECON’s competence.

In its communication on the Annual Sustainable Growth Strategy 2021, the Commission explains how the European Semester and the Recovery and Resilience Facility (RRF) are intertwined, and that the deadlines of the European Semester and the RRF will overlap, which requires the temporary adjustment of the Semester timelines in order to properly launch the RRF.

The rapporteur accepts this change, since the COVID-19 pandemic has thrown the world into a sudden and deep recession and a strong, coordinated and innovative response is needed, and the RRF is a key to that. Nevertheless, the rapporteur is of the opinion that the temporary adaptation of this year’s Semester cycle cannot override the original purpose and function of the European Semester, which is to serve as a framework for EU Member States to coordinate their budgetary and economic policies across the European Union.

As the pandemic will have a negative impact on the EU’s economy, particularly on SMEs, Single Market and its competitiveness, significant structural reforms and high-quality public and private investment will be needed to overcome this crisis. Member States can use the available fiscal flexibility to support their economies, as the general escape clause is activated, but Member States are still obliged to comply with the SGP and must continue to keep in mind the goal of financial sustainability on the medium-term.


 

OPINION OF THE COMMITTEE ON BUDGETS (26.2.2021)

for the Committee on Economic and Monetary Affairs

on the European Semester for economic policy coordination: Annual Sustainable Growth Strategy 2021

(2021/0000(INI))

Rapporteur for opinion (*): Margarida Marques

 

 

(*) Associated committee – Rule 57 of the Rules of Procedure

 

 


SUGGESTIONS

The Committee on Budgets calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following suggestions into its motion for a resolution:

1. Welcomes the Annual Sustainable Growth Strategy 2021 overall assessments, the strategy’s enhanced focus on social and environmental dimensions and the fostering of reforms and investments supporting a robust recovery and enhancing resilience to future crises, while placing emphasis on combining crisis management with the transformative aspirations of the green and digital transitions; underlines that the COVID-19 crisis, with rising unemployment, the increased risk of poverty, major losses in households’ and SMEs’ incomes, social exclusion and increasing disparities between Member States, is having an impact on the content of reforms, recovery and resilience and highlights the Portuguese Presidency’s emphasis on enhancing and strengthening the European social model as a valuable contribution in this regard to long-term recovery and competitiveness in the EU, delivering on the European Pillar of Social Rights and strengthening the open strategic autonomy of the EU;

2. Acknowledges the unprecedented European Recovery Package (multiannual financial framework (MFF) and Next Generation EU (NGEU)) of EUR 1.8 trillion to compensate for the impacts of the crisis and points out that tackling the pandemic is a prerequisite for the recovery, notably through accelerating the coordinated distribution of and timely access to vaccines by all Member States and all people; is concerned that the contraction in EU GDP based on the Commission’s economic forecasts (-6.3 % EU GDP in 2020 and +3.7 % in 2021), together with the prolongation of the lockdown, will severely reduce the near- to mid-term fiscal room for manoeuvre of many Member States, undermining their ability to address pressing policy challenges;

3. In this context, is concerned about the possible long-term effects on the integrity of the single market of the extension of the derogation to the State aid rules during the ongoing crisis for Member States with limited public funds and limited fiscal capacity, and stresses the importance of preserving the level playing field in the single market and of strengthening economic and social cohesion between EU regions;

4. Advises against serious delays in the implementation of the EU programmes and funds, especially those under shared management, of the 2014-2020 period; calls, therefore, on the Member States to accelerate the implementation of these programmes, in order not to jeopardise the timely launch of the new EU programmes of the 2021-2027 MFF, as well as those financed by the European Recovery Instrument, taking into particular account the tight timetable in force for its implementation;

5. Considers that the agreements on the MFF, NGEU, the own resources (OR) decision, the Recovery and Resilience Facility (RRF) and the Rule of Law Regulation constitute a vital baseline for the innovative, sustainable and socially just policies, reforms and investments indispensable to tackle existing and unexpected or unpredictable challenges; is convinced that this new common issuance of bonds at EU level, necessitated by the health, economic and social crisis, and aimed at ensuring sustainable growth, creates value by mutualising the outstanding credit rating of the EU budget based on its OR system, and is crucial for the implementation of European priorities and to support investments and reforms, and represents an economic stimulus for a sustainable and fair recovery in the EU; in this regard, highlights the importance of disbursing the funds generated by the Commission’s borrowing on the capital markets through programmes and instruments of the EU budget;

6. Stresses that NGEU, and the RRF in particular, reshape the European Semester framework and that, together with the Just Transition Mechanism, REACT-EU, Horizon Europe, InvestEU, RescEU, Rural Development and the issuance of Green Bonds, will be an exemplary test case of how EU strategic guidance and financial firepower can be synchronised with national needs, priorities and implementation capacities; points out the importance of EU priorities and programmes – such as those for investment, employment, education and training, digital infrastructures and skills, culture, social care and health – for the success of the recovery and to enhancing sustainable growth and job creation, while promoting economic, social and territorial cohesion in the EU, and further points out the need to ensure coherence and complementarity with the European Semester framework and the recovery and resilience plans (RRP); in this regard, underlines the need for synergies between the RRPs and the partnership agreements under the MFF 2021-2027 and calls on the Member States to put forward their respective proposals without undue delay;

7. Emphasises that the European Parliament should be better involved in the European Semester process, including the country-specific recommendations, in order to provide democratic legitimacy, as well as oversight and scrutiny of the use of RRF funds which are ultimately secured by the EU budget, for example through the recovery and resilience dialogue; stresses the key role of local and regional actors, SMEs, social partners, civil society organisations and other relevant stakeholders being actively involved in the development of the Member States’ RRPs in order to stimulate sustainable growth, thereby ensuring a fair transition, while safeguarding jobs across the EU; calls on the Commission to ensure proper public consultation of stakeholders, while closely monitoring Member States’ progress reports on the implementation of the RRPs, ensuring strategic and responsible spending which does not act as a substitute for recurring national budgetary expenditure that is efficient and effective for both the economy and citizens;

8. Calls on the Commission to ensure that the existing scoreboards and dashboards are complemented with relevant indicators better reflecting the impact of the EU budget, including social, gender-related, macroeconomic and environmental impacts;

9. Stresses the urgent need for the RRPs to deliver public goods like pandemic prevention, as well as to contribute to implementing the six pillars of the RRF (including economic competitiveness and entrepreneurship, social and territorial cohesion and youth policies), the European Pillar of Social Rights, the EU’s climate and biodiversity objectives, the Paris Agreement, the UN Sustainable Development Goals, the European Green Deal and the digital and green transformation, as well as the Gender Equality Strategy, and to contribute to the long-term resilience of European economies and public finances through reforms and investments; highlights the need to improve the resilience of public institutions, in order to guarantee the continued functioning of administrations, as well as public services, during exceptional circumstances;

10. Stresses how the social tracking methodology to be developed for the RRF can play a key role in improving the European Semester in order to better incorporate social and environmental issues on an equal footing with fiscal coordination by, for example, paying more attention to aggressive tax planning, poverty reduction, gender equality, social justice, social cohesion and upward convergence;

11. Highlights that women, as well as vulnerable and marginalised groups, have been disproportionately affected by the COVID-19 pandemic and its economic and social consequences, constituting a majority of workers in the care sector and other sectors particularly affected by unemployment and lockdowns, while also being victims of the sharp increase in domestic and gender-based violence; recalls that the employment, gender pay and gender pension gaps remain extremely high; underlines that the European Semester process and the RRF should contribute to tackling these inequalities; calls for the strengthening of gender equality through the integration of gender mainstreaming into all EU activities, policies and programmes, and for the Commission to accelerate the introduction of an effective, transparent, comprehensive, results-oriented and performance-based methodology for all EU programmes;

12. Reiterates the urgency of increasing and diversifying the EU budget’s revenue sources, in line with the road map integrated into the Interinstitutional Agreement, and of linking own resources with policy objectives more effectively, in particular by providing environmental incentives by improving the efficiency of the taxation of mobile corporate tax bases; recalls that the financing of NGEU, in particular of the RRF, depends on the urgent ratification by the Member States of the OR decision, and calls on the Member States to swiftly ratify it without further delays; emphasises that the EU budget and national budgets are negatively impacted by tax evasion and that a comprehensive approach is needed to fight tax fraud, tax avoidance and aggressive tax planning, as well as aggressive tax competition; calls, therefore, for an annual survey on the European tax gap, including a listing of harmful tax practices and the revenue impacts of tax evasion;

13. Calls on the Commission to apply the Rule of Law Regulation which is meant to protect the financial interests of the Union, completely, as adopted by the co-legislators, and without ambiguity as of 1 January 2021; recalls the Commission’s role as the guardian of the Treaties.

 


INFORMATION ON ADOPTION IN COMMITTEE ASKED FOR OPINION

Date adopted

25.2.2021

 

 

 

Result of final vote

+:

–:

0:

33

6

1

Members present for the final vote

Robert Biedroń, Olivier Chastel, Lefteris Christoforou, David Cormand, Paolo De Castro, José Manuel Fernandes, Eider Gardiazabal Rubial, Alexandra Geese, Vlad Gheorghe, Valentino Grant, Elisabetta Gualmini, Francisco Guerreiro, Valérie Hayer, Eero Heinäluoma, Niclas Herbst, Monika Hohlmeier, Mislav Kolakušić, Moritz Körner, Joachim Kuhs, Zbigniew Kuźmiuk, Ioannis Lagos, Hélène Laporte, Pierre Larrouturou, Janusz Lewandowski, Margarida Marques, Silvia Modig, Siegfried Mureşan, Victor Negrescu, Andrey Novakov, Jan Olbrycht, Dimitrios Papadimoulis, Karlo Ressler, Bogdan Rzońca, Nicolae Ştefănuță, Nils Torvalds, Nils Ušakovs, Johan Van Overtveldt, Rainer Wieland, Angelika Winzig

Substitutes present for the final vote

Damian Boeselager

 


 

FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR OPINION

33

+

NI

Mislav Kolakušić

PPE

Lefteris Christoforou, José Manuel Fernandes, Niclas Herbst, Monika Hohlmeier, Janusz Lewandowski, Siegfried Mureşan, Andrey Novakov, Jan Olbrycht, Karlo Ressler, Rainer Wieland, Angelika Winzig

Renew

Olivier Chastel, Vlad Gheorghe, Valérie Hayer, Moritz Körner, Nicolae Ştefănuță, Nils Torvalds

S&D

Robert Biedroń, Paolo De Castro, Eider Gardiazabal Rubial, Elisabetta Gualmini, Eero Heinäluoma, Pierre Larrouturou, Margarida Marques, Victor Negrescu, Nils Ušakovs

The Left

Silvia Modig, Dimitrios Papadimoulis

Verts/ALE

Damian Boeselager, David Cormand, Alexandra Geese, Francisco Guerreiro

 

6

-

ECR

Zbigniew Kuźmiuk, Bogdan Rzońca, Johan Van Overtveldt

ID

Joachim Kuhs, Hélène Laporte

NI

Ioannis Lagos

 

1

0

ID

Valentino Grant

 

Key to symbols:

+ : in favour

- : against

0 : abstention


 

OPINION OF THE COMMITTEE ON THE ENVIRONMENT, PUBLIC HEALTH AND FOOD SAFETY (25.2.2021)

for the Committee on Economic and Monetary Affairs

on the European Semester for economic policy coordination: Annual Sustainable Growth Strategy 2021

(2021/2004(INI))

Rapporteur for opinion: Pascal Canfin

 

 

SUGGESTIONS

The Committee on the Environment, Public Health and Food Safety calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following suggestions into its motion for a resolution:

A. whereas the loss of biodiversity, climate change, pollution and loss of natural capital is tightly coupled to economic activities and economic growth;

1. Strongly welcomes the fact that the Annual Sustainable Growth Strategy 2021 confirms the refocusing of the European Semester (Semester) process to place sustainability, health and the wellbeing of citizens at the centre of economic and social policies; shares the Commission’s view in the Annual Sustainable Growth Strategy that economic growth is not an end in itself, but that sustainable development should deliver shared prosperity for all while fully respecting the limits of our planet; reiterates the crucial role of innovation, technological progress, education and development of human capital in meeting these priorities; stresses that macroeconomic stability, environmental sustainability, resilience, productivity and social fairness are key components of the overarching objective of ‘competitive sustainability’ pursued under the Semester;

2. Welcomes further the inclusion of the Sustainable Development Goals (SDGs) in the European semester process and the fact that the 2020 cycle included a dedicated chapter reporting on environmental sustainability and on Member States’ progress towards the attainment of the SDGs; is concerned that several of Europe’s environmental footprints exceed planetary boundaries; calls on the Commission to pursue that approach in the 2021 cycle as a complement to the assessment of how recovery and resilience plans should contribute to the green transition;

3. Underlines that the current pandemic highlights the necessity for the European Semester to act as an enabling framework for Member States to strengthen public healthcare systems to ensure high quality, accessible and equitable healthcare for all at all times;

4. Stresses that the alignment of the Semester’s process with the EU’s long-term climate and environmental objectives must be accelerated, as per the Commission’s engagements under the European Green Deal, the Paris Agreement and the forthcoming post-2020 global agreement under the Convention on Biological Diversity (CBD); underlines that the coordination of Member States’ macroeconomic, socioeconomic and fiscal policies is, among others, an essential tool to achieve the European Green Deal; highlights the potential of the Semester process as a tool for making progress towards the achievement of the objectives of the European Green Deal and the Union’s commitments under the Paris Agreement and the SDGs;

5. Stresses the importance of consistency between Member States’ economic and budgetary policies, European ambitions and public policies; emphasises that the Union’s recovery from the COVID-19 crisis offers a unique opportunity to boost the transition to climate neutrality and increase resilience in strategic sectors; stresses that reforms undertaken within the Semester process should foster the direction of public and private investments towards climate and environmental actions in order to facilitate the green and just transition, and towards actions strengthening the resilience of healthcare and health systems across the Union;

6. Highlights that robust social systems are essential in the fight against the climate crisis, as they are an enabler in shaping a socially just transition to a climate-neutral future;

7. Underlines that sustainable fiscal policy is crucial for a sustainable financing model for the European Green Deal;

8. Stresses that given the high level of government debt and high sustainability challenges for some Member States, it is important to ensure that short-term macroeconomic imbalances are treated appropriately to mitigate the socioeconomic consequences of the crisis, protect workers, preserve jobs and ease job transitions towards the green and digital economy;

9. Calls on the Commission to extend the current Semester approach to deliver on its political commitment to make it a governance tool supporting the achievement of the European Green Deal and the SDGs; underlines therefore the need to further integrate, without weakening the monitoring process of the Semester, the Union’s climate, environmental, including biodiversity and social, objectives in a more comprehensive manner to provide Member States with analysis and indicators beside economic indicators only, thus better reflecting the current challenges faced by Member States in reducing their ecological footprint and making the process a driver of change towards a sustainable wellbeing for all in Europe;

10. Stresses that the European semester should support the Union’s effort to achieve climate neutrality by 2050 at the latest; calls on the Commission, therefore, to assess the discrepancy between the structure of Member States’ budgets and a Paris-aligned scenario for each of their national budgets, thus enabling to provide recommendations on Member States’ climate debt and on the reduction of their climate investment gap associated to the Union’s objective of climate neutrality by 2050 at the latest;

11. Stresses that the pandemic has hit all Member States, while the scale of the impact, specific exposures and the pace and strength of the recovery will vary; believes that the European Semester process should take into account the specificities of Member States’ situations during the pandemic; recognises the significant impact of the pandemic on the socio-economic and public health objectives set out in the Treaties and the European Pillar of Social Rights; calls for the Semester to also focus on social fairness and support for those most severely affected by the health crisis; notes that prioritisation of the green and digital transitions and macroeconomic sustainability should also address social aspects whose progress has been slowed during the pandemic;

12. Calls on the Commission to establish an inventory of all environmentally harmful subsidies, including in the form of tax rebates, that still exist at national level and hamper the achievement of the European Green Deal, and to monitor their phase out, as soon as possible and by 2025 at the latest in the context of the Semester; reiterates its call for the reorientation of taxation systems towards an increased use of environmental taxation;

13. Calls for the Semester to be adapted to take into account the economic and sanitary situation caused by the COVID-19 pandemic, and the One Health Approach, and for the Semester to be aligned with the Recovery and Resilience Facility, the key EU instrument for recovery; notes that the assessment of the recovery and resilience plans will be made on the basis of relevant country-specific challenges and priorities identified in the context of the Semester, notably those relevant for strengthening the resilience of healthcare and health systems, and achieving the Union’s climate and environment objectives, notably the transition towards achieving the Union’s updated 2030 climate targets and complying with the objective of Union climate neutrality by 2050 at the latest in accordance with the proposed European Climate Law;

14. Stresses that the EU’s recovery provides a unique opportunity to build back a stronger EU by providing guidance to Member States on where reforms and investments are most needed in order to accelerate the transition to a more sustainable, resilient and inclusive EU leaving no one behind; calls on the Commission, in this regard, to ensure that recovery and resilience plans effectively contribute to addressing challenges in the relevant country-specific recommendations in the field of the green transition, including circular economy actions; calls on the Commission and Member States to work jointly on the elaboration of strategies to phase out all harmful, direct and indirect, fossil fuel subsidies as early as possible, and by 2025;

15. Recalls that at least 37 % of the expenditure of each national recovery and resilience plan should be allocated to climate action, and that reforms and investments included in the national recovery and resilience plans will respect the ‘do no significant harm’ principle as defined in Article 17 of Regulation (EU) 2020/852; calls for utmost transparency in this assessment; stresses in this regard that the Taxonomy Regulation should serve as a guiding reference; regrets the fact that no specific biodiversity spending target was agreed under the Recovery and Resilience Facility; recalls that 7.5 % of the Union’s budget and Next Generation EU expenditure should be dedicated to biodiversity objectives from 2024, and 10% from 2026 onwards; urges Member States to scale up investment in biodiversity conservation and restoration;

16. Believes that the principles at the heart of a circular economy should be a core element of any European and national industrial policy and of the national recovery and resilience plans proposed by Member States;

17. Stresses the need for strong and ongoing control, including via the Semester, of implementation of the national recovery and resilience plans and territorial Just Transition Plans, covering both their alignment with the Green Deal growth strategy priorities and the transparency and integrity of public spending;

18. Underlines that the UN Environment Programme Emissions Gap Report 2020[11] highlighted that fiscal COVID-19-related spending has so far primarily supported the global status quo of high-carbon production, and that support should instead focus on zero-emissions technologies, ending fossil fuel subsidies through fiscal reform and stepping up nature-based solutions, in particular the protection and restoration of ecosystems;

19. Supports the Commission’s guidance to Member States to include in their recovery plans investments and reforms in flagship areas under the green transition that are in line with the EU’s increased 2030 climate target and the objective of achieving climate neutrality by 2050 at the latest – in particular by increasing investments in renewable energy, renovation, sustainable mobility, the circular economy and biodiversity – given their potential to create jobs, sustainable growth to ensure EU’s long-term competitiveness and increase the resilience of our economies and societies;

20. Calls on Member States to invest in activities that effectively contribute to strengthening the resilience of healthcare and health systems in preparation for future pandemics, and in the restoration of ecosystems and their services to tackle the twin crises of biodiversity loss and global heating through nature-based solutions; underlines that these flagship initiatives will only be successful if they help to mitigate social and environmental inequalities between Member States and within Member States, and offer new opportunities to increase people’s wellbeing;

21. Shares the view of the Annual Sustainable Growth Strategy 2021 that carbon pricing and environmental taxation will be important environmental and fiscal instruments for implementing the green transition; emphasises, however, that it is equally important to take into account the distributional effects of these instruments and to put in place accompanying policies to mitigate their potentially socially unfair effects, and ensure a just transition;

22. Notes that the Sustainable Growth Strategy 2021 addresses the fact that from a single market perspective the extended lockdown boosted online services and e-commerce; emphasises that growing data usage goes along with growing environmental impacts; calls on the Commission to develop a European environmental digital agenda, including legislative initiatives, to minimise the environmental and climate footprint of data usage, production and storage, digital services and ICT hardware;

23. Stresses the importance of the Green Deal within the European Semester and the new Growth Strategy; underlines the fact that new technologies and new production and consumption models based on technological and social innovation are crucial in reaching the goals from the Green Deal and achieving climate neutrality of the EU economy by 2050; emphasises that the New Industrial Strategy for Europe is an important tool for creating the framework and environment for enabling such innovations, and an important factor in the EU’s recovery and strengthening the Union’s independence in the production of medicines and medical supplies;

24. Calls on the Commission to include maritime transport as part of the sustainable mobility flagship, since this strategic sector was particularly impacted by the COVID-19 pandemic, and represents a great economic and job opportunities for the greening of the European industry and its autonomy regarding international competition;

25. Urges the Commission to ensure effective climate and biodiversity mainstreaming and proofing across EU spending and programmes on the basis of technical screening criteria developed under Regulation (EU) 2020/852;

26. Welcomes the fact that Member States must make their recovery and resilience plans consistent with their national reform and investment programmes designed in line with EU policy objectives, focusing on green and digital transition;

27. Underlines that zero-emission waterway transport is key to developing a sustainable modal shift from road to waterways, as part of the sustainable mobility strategy, and calls therefore on the Commission and Member States to support investments in research and innovation, and in refuelling and recharging infrastructures in inland ports;

28. Underlines that Member States’ recovery plans are an opportunity for the transition to a social and solidarity-based economy and to an economic democracy; asks the Commission to review the national plans from this angle, and to ensure that SMEs and other smaller stakeholders are not left behind in the implementation of the projects and proposals in the plans;

29. Underlines that the Recovery and Resilience Facility is a crucial economic response to the COVID-19 crisis, while also providing an opportunity to accelerate the green transition and based on the EU’s goal of achieving competitiveness and cohesion through a new growth strategy, that is the European Green Deal;

30. Underlines that a sustainable blue economy, including sustainable fisheries, marine renewable energy, clean maritime transport, and sustainable tourism, have an important role to play in the transition towards a more resilient society; calls, therefore, on the Commission and Member States to take due account of this strategic sector;

31. Recalls that 7.5 % of the Union budget and Next Generation EU expenditure should be dedicated to biodiversity objectives from 2024, and 10% from 2026 onwards; urges Member States to scale up investment in biodiversity conservation and restoration, reform subsidies harmful to biodiversity, and screen (ex ante) and monitor (ex post) recovery support for their biodiversity impacts;

32. Notes that the pandemic has shown the need to strengthen the resilience of supply chains; emphasises that this should also be an opportunity to make supply chains more sustainable; welcomes, therefore, the Commission’s announcement that it would present a legislative proposal for corporate due diligence and the European Parliament’s legislative own-initiative report to halt and reverse EU-driven global deforestation, and calls on the Commission to follow up on this report and to make a proposal for an EU anti-deforestation law based on mandatory due diligence;

33. Recalls that the Recovery and Resilience Facility does not deviate from the pre-pandemic objectives, but seeks to rapidly address the challenges and problems that existed before the COVID-19 pandemic, and to avoid new obstacles caused by the COVID-19 crisis endangering the progress;

34. Emphasises that management, preservation and restoration of marine and terrestrial ecosystems are key investments for achieving carbon neutrality, as they will enhance natural carbon sinks such as mangroves, coral reefs, seagrass beds and salt marshes, forests, soils, agricultural land, and wetlands, thus boosting resilience;

35. Welcomes the emphasis in the Annual Sustainable Growth Strategy 2021 on good governance and the rule of law to create a favourable business environment; emphasises that enforcing good governance and the rule of law are also crucial to enabling the design and proper implementation of environmental policies;

36. Reiterates the interinstitutional agreement to allocate at least 30 % of the EU’s multiannual financial framework and the Next Generation EU Instrument to the achievement of climate goals;

37. Underlines the importance of structured and systematic dialogue with national Parliaments and civil society at the national level with a view to extending ownership.


INFORMATION ON ADOPTION IN COMMITTEE ASKED FOR OPINION

Date adopted

25.2.2021

 

 

 

Result of final vote

+:

–:

0:

62

17

0

Members present for the final vote

Nikos Androulakis, Bartosz Arłukowicz, Margrete Auken, Simona Baldassarre, Marek Paweł Balt, Traian Băsescu, Aurélia Beigneux, Monika Beňová, Sergio Berlato, Alexander Bernhuber, Malin Björk, Simona Bonafè, Delara Burkhardt, Pascal Canfin, Sara Cerdas, Mohammed Chahim, Tudor Ciuhodaru, Nathalie Colin-Oesterlé, Esther de Lange, Christian Doleschal, Marco Dreosto, Cyrus Engerer, Eleonora Evi, Agnès Evren, Pietro Fiocchi, Andreas Glück, Catherine Griset, Jytte Guteland, Teuvo Hakkarainen, Anja Hazekamp, Martin Hojsík, Pär Holmgren, Jan Huitema, Yannick Jadot, Adam Jarubas, Petros Kokkalis, Athanasios Konstantinou, Ewa Kopacz, Joanna Kopcińska, Ryszard Antoni Legutko, Peter Liese, Javi López, Fulvio Martusciello, Liudas Mažylis, Joëlle Mélin, Tilly Metz, Silvia Modig, Dolors Montserrat, Alessandra Moretti, Dan-Ştefan Motreanu, Ville Niinistö, Ljudmila Novak, Grace O’Sullivan, Jutta Paulus, Stanislav Polčák, Jessica Polfjärd, Luisa Regimenti, Sándor Rónai, Rob Rooken, Christine Schneider, Günther Sidl, Ivan Vilibor Sinčić, Linea Søgaard-Lidell, Nicolae Ştefănuță, Nils Torvalds, Edina Tóth, Véronique Trillet-Lenoir, Petar Vitanov, Alexandr Vondra, Mick Wallace, Pernille Weiss, Emma Wiesner, Michal Wiezik, Tiemo Wölken, Anna Zalewska

Substitutes present for the final vote

Catherine Chabaud, Nicolás González Casares, Martin Häusling, Annalisa Tardino

 


 

FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR OPINION

62

+

NI

Athanasios Konstantinou, Ivan Vilibor Sinčić

PPE

Bartosz Arłukowicz, Traian Băsescu, Alexander Bernhuber, Nathalie Colin-Oesterlé, Christian Doleschal, Agnès Evren, Adam Jarubas, Ewa Kopacz, Esther de Lange, Peter Liese, Fulvio Martusciello, Liudas Mažylis, Dolors Montserrat, Dan-Ştefan Motreanu, Ljudmila Novak, Stanislav Polčák, Jessica Polfjärd, Christine Schneider, Edina Tóth, Pernille Weiss, Michal Wiezik

Renew

Pascal Canfin, Catherine Chabaud, Martin Hojsík, Jan Huitema, Nicolae Ştefănuță, Linea Søgaard-Lidell, Nils Torvalds, Véronique Trillet-Lenoir, Emma Wiesner

S&D

Nikos Androulakis, Marek Paweł Balt, Monika Beňová, Simona Bonafè, Delara Burkhardt, Sara Cerdas, Mohammed Chahim, Tudor Ciuhodaru, Cyrus Engerer, Nicolás González Casares, Jytte Guteland, Javi López, Alessandra Moretti, Sándor Rónai, Günther Sidl, Petar Vitanov, Tiemo Wölken

The Left

Malin Björk, Anja Hazekamp, Petros Kokkalis, Silvia Modig

Verts/ALE

Margrete Auken, Eleonora Evi, Martin Häusling, Pär Holmgren, Yannick Jadot, Tilly Metz, Ville Niinistö, Grace O’Sullivan, Jutta Paulus

 

17

-

ECR

Sergio Berlato, Pietro Fiocchi, Joanna Kopcińska, Ryszard Antoni Legutko, Rob Rooken, Alexandr Vondra, Anna Zalewska

ID

Simona Baldassarre, Aurélia Beigneux, Marco Dreosto, Catherine Griset, Teuvo Hakkarainen, Joëlle Mélin, Luisa Regimenti, Annalisa Tardino

Renew

Andreas Glück

The Left

Mick Wallace

 

Key to symbols:

+ : in favour

- : against

0 : abstention

 

 


 

 

LETTER OF THE COMMITTEE ON REGIONAL DEVELOPMENT

Ms Irene Tinagli

Chair

Committee on Economic and Monetary Affairs

BRUSSELS

Subject: Opinion on the European Semester for economic policy coordination: Annual Sustainable Growth Strategy 2021, COM (2020)575, 2021/2004(INI)

 

Dear Madam Chair,

 

Under the procedure referred to above, the Committee on Regional Development has been asked to submit an opinion to your committee. The Committee on Regional Development decided to send the opinion in the form of a letter.

 

 

 

 

 

 

 

 

The Committee on Regional Development considered the matter at its meeting of 24/02/2021, the opinion was adopted with 41 votes in favour, 0 votes against and 0 abstentions.

At that meeting[12], the Committee on Regional Development decided to call on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following suggestions into its motion for a resolution.

 

 

Yours sincerely,

Younous Omarjee

SUGGESTIONS

The REGI Committee

1. Notes that the COVID 19 pandemic has thrown the world into a sudden and deep recession and that many uncertainties remain. Believes that this pandemic is far more than a health crisis and that its economic and social impact varies from country to country, with an increase in poverty, inequalities and disparities between EU regions. Emphasises that more must be done to fight these inequalities and to encourage a quick and sustained recovery in particular by supporting those regions, which are experiencing slower growth, and high unemployment, particularly where young people are concerned. Notes with concern, in this regard, that the unemployment rate is over 7 % and the youth unemployment rate has risen to 17 % in the EU as a whole and is expected to increase further due to COVID-19[13]. In addition to the youth, the crisis has disproportionately affected women, and disadvantaged groups such as low-income households, people with disabilities and minorities;

 

2. Underlines the importance of the Recovery and Resilience Facility as one of the main tools for the recovery with EUR 672,5 billion in loans and grants of financial support in the first years of the recovery. The importance of achieving a high degree of resilience of domestic economies is one of the lessons learnt from the last global economic, social and financial crisis and it is crucial to avoid further deepening and exacerbating of pre-existing economic and social differences. Stresses the need to improve preparedness and resilience of the national health and social protection systems as well as to ensure equal access to education, affordable and quality health care, long-term care and childhood care systems. Therefore, it is necessary to ensure that the resources from this fund are used effectively where they are most needed so that the burden and debt for the next generation is as low as possible;

 

3. Highlights that the Facility should contribute to the promotion of economic, social and territorial cohesion, thereby improving the economic and social resilience and adjustment capacity of Member States, and supporting the green and digital transitions aimed at enhancing economic competitiveness and achieving a climate neutral Europe by 2050. To this end, it hopes that there will be a high level of complementarity between the actions envisaged in the National Recovery Plans and those envisaged by the Cohesion Policy. Regrets that in RRF Regulation the partnership principle is not mandatory and that as a consequence, in most EU countries, cities have not been fully involved in the preparation of National Recovery Plan[14] and that there is also a risk of inconsistency between RRF and ESI Funds’ implementation;

 

 

4. Stresses that the involvement of regional and local public authorities, as well as that of economic and social partners, professional associations and the relevant bodies representing civil society, such as NGOs, is crucial for the successful implementation of the Facility in light of a rapid recovery from the current crisis. Calls on the Commission to put forward an assessment tool to ensure that the criteria of Member States’ consultations with local, regional and national civil society organisations is respected;

 

5. Stresses that the regions must be fully involved in the National Recovery Plans and in their management at national level in order to tackle the current multidimensional challenges at the most appropriate territorial level. Considers that the principles of cohesion should also be reflected in the Plans.  Investments should boost  key sectors, in particular those hit the most by the crisis, fostering high-quality job creation and preservation and ensuring equal access to the labour market in conformity with the European Pillar of Social rights; special attention should be given to the most vulnerable segments of the population including the elderly;  the Facility should also contribute to the achievement of gender equality, as specified in Article 8 of the Treaty taking into account that the gender employment gap (11.4 %) , gender pay gap (14 %) and gender pension gap (30 %) remain unacceptably high[15].Moreover gender equality objectives and the economic independence of women shall be ensured in all dimensions and in all stages of the preparation, monitoring, implementation and evaluation of programmes financed under the Recovery and Resilience Facility in a timely and consistent manner. Insists on the fact that the pandemic highlights the need to strengthen local production in order to avoid future shortages in the economic sectors of agriculture, industry and health; supports short circuits and local production to reduce significantly greenhouse gas emissions and to strengthen local economies weakened by the crisis;

 

6. Calls on the need to further strengthen the link between quality employment, gender equality, sustainable growth, social and climate goals, with the European Semester, with the ultimate objective of improving quality of life and citizens’ wellbeing;

 

7. For investments under the Facility, multi-level governance is important in the European Semester process, since the COVID-19 pandemic has affected territories within Member States in different ways. . Recalls that among the many inequalities exposed by the COVID-19 pandemic, the digital divide is a serious one, affecting in particular less developed regions, women, elderly people, low-income households and people living in the outermost regions. Greater investment is needed in digitalisation, digital innovation and digital connectivity, which would enable a fair and equal transition towards a digital economy, especially for the most vulnerable in society;

 

8. Welcomes the role of the Recovery and Resilience Facility in guiding and building a more sustainable, resilient and fairer Europe for the next generation while aligning with the “do not significant harm” principle, as defined by Article 17 of the Taxonomy Regulation, and through investments and reforms in seven flagship areas focused on environmental sustainability, renewable energy, renovation, sustainable mobility, biodiversity, productivity, fairness, and macroeconomic stability; highlights that to achieve a climate mainstreaming target of 30% for both the multiannual  financial framework and Next Generation EU in line with the UN Sustainable Development Goals, each recovery and resilience plan will have to  include a minimum of 37% of expenditure related to climate; calls on the Commission and the Member States to ensure consistency, coherence and synergies with the UN 2030 Agenda;

 

9. Acknowledges that technological trends in the labour market and the transition to a sustainable economy are enormous challenges but also opportunities for regional cohesion; reiterates the crucial role of the European Structural and Investment Funds, as the main investment tool for Cohesion policy in Europe, to help regional recovery processes. Attention should be paid to urban areas as drivers of green and digital transformation, to all regions, suffering from natural or demographic handicaps and most affected by the transition to more sustainable and greener economy and to islands and outermost regions;

 

10. Stresses that the European Semester, the new Recovery and Resilience Facility and the cohesion policy funds are intrinsically linked and that it is therefore necessary to ensure better coordination, as well as swift and tailored actions with a view to creating jobs, enhancing education, innovation, re-building a robust economy, while reaching the climate targets. Stresses that the conclusions of the European Semester and the reports by Member States have important implications in the regions, and that these implications should be regularly monitored in the context of cohesion policy implementation. Considers that the inclusion of SDGs and the Social Pillar within the scope of the European Semester will require the adjustment of existing indicators and the creation of new ones to monitor the implementation of EU economic, environmental and social policies, as well as coherence between policy goals and budgetary means.


INFORMATION ON ADOPTION IN COMMITTEE RESPONSIBLE

Date adopted

4.3.2021

 

 

 

Result of final vote

+:

–:

0:

21

8

29

Members present for the final vote

Gunnar Beck, Marek Belka, Isabel Benjumea Benjumea, Stefan Berger, Gilles Boyer, Francesca Donato, Derk Jan Eppink, Engin Eroglu, Markus Ferber, Jonás Fernández, Raffaele Fitto, Frances Fitzgerald, José Manuel García-Margallo y Marfil, Luis Garicano, Sven Giegold, Valentino Grant, Claude Gruffat, José Gusmão, Enikő Győri, Eero Heinäluoma, Danuta Maria Hübner, Stasys Jakeliūnas, France Jamet, Othmar Karas, Billy Kelleher, Ondřej Kovařík, Georgios Kyrtsos, Aurore Lalucq, Aušra Maldeikienė, Pedro Marques, Costas Mavrides, Jörg Meuthen, Csaba Molnár, Caroline Nagtegaal, Luděk Niedermayer, Lefteris Nikolaou-Alavanos, Dimitrios Papadimoulis, Piernicola Pedicini, Lídia Pereira, Kira Marie Peter-Hansen, Sirpa Pietikäinen, Dragoș Pîslaru, Evelyn Regner, Antonio Maria Rinaldi, Alfred Sant, Martin Schirdewan, Joachim Schuster, Ralf Seekatz, Pedro Silva Pereira, Paul Tang, Cristian Terheş, Irene Tinagli, Ernest Urtasun, Inese Vaidere, Johan Van Overtveldt, Stéphanie Yon-Courtin, Marco Zanni, Roberts Zīle

 


 

 

 

 

 

 


FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

21

+

PPE

Isabel Benjumea Benjumea, Stefan Berger, Markus Ferber, Frances Fitzgerald, José Manuel García-Margallo y Marfil, Enikő Győri, Danuta Maria Hübner, Othmar Karas, Georgios Kyrtsos, Aušra Maldeikienė, Luděk Niedermayer, Lídia Pereira, Sirpa Pietikäinen, Ralf Seekatz, Inese Vaidere

Renew

Engin Eroglu, Luis Garicano, Billy Kelleher, Dragoș Pîslaru

S&D

Marc Angel, Eva Kaili

 

8

-

ECR

Derk Jan Eppink

ID

Gerolf Annemans, France Jamet, Jörg Meuthen

NI

Lefteris Nikolaou-Alavanos

The Left

Manon Aubry, José Gusmão, Chris MacManus

 

29

0

ECR

Raffaele Fitto, Eugen Jurzyca, Johan Van Overtveldt, Roberts Zīle

ID

Francesca Donato, Valentino Grant, Antonio Maria Rinaldi, Marco Zanni

Renew

Gilles Boyer, Ondřej Kovařík, Caroline Nagtegaal, Stéphanie Yon-Courtin

S&D

Marek Belka, Jonás Fernández, Eero Heinäluoma, Aurore Lalucq, Margarida Marques, Pedro Marques, Evelyn Regner, Joachim Schuster, Pedro Silva Pereira, Paul Tang, Irene Tinagli

Verts/ALE

Sven Giegold, Henrike Hahn, Stasys Jakeliūnas, Piernicola Pedicini, Kira Marie Peter-Hansen, Ernest Urtasun

 

Key to symbols:

+ : in favour

- : against

0 : abstention

 

 

Last updated: 5 March 2021
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