Austerity policies pushed by the majority of EU governments in the past two years have derailed economic recovery, according to Portuguese Social Democrat Elisa Ferreira in her report on the European Commission's Annual Growth Survey 2013. The latter is the starting shot for the yearly European Semester, a process of economic policy coordination to ensure that national budgets are in line with EU priorities. The economic and monetary affairs committee will vote on her report on 22 January.
The report says there is too much focus on austerity and therefore calls on the Commission to beef up the recommendations on investment for growth, solidarity between member states and democratic legitimacy, which means the Parliament should get fully involved.
MEPs first debated the survey on 28 November 2012, right after it was published.
About the Annual Growth Survey
The Annual Growth Survey is the start of the so-called European Semester. It is a method for economic policy coordination to ensure member states align their budgetary and economic plans with the Stability and Growth Pact and the Europe 2020 strategy.
The survey applies to the EU as a whole, but will also contain country-specific recommendations later on. This is already the third Survey since the European Semester was introduced in 2010.
Priorities for this year
The priorities for this year will remain the same as those listed in the last Annual Growth Survey, namely:
Reducing national debts without harming growth
Restoring normal lending to the economy
Promoting growth and competitiveness
Tackling unemployment and the social consequences of the crisis
Modernising public administration
Easing on austerity
Ms Ferreira, who covers the survey on behalf of the economics committee, pleaded for taking more time to get national budgets back into shape during the debate on 28 November. "We have got to be frank and recognise that the consolidation strategy unfortunately has failed."
Olli Rehn, the commissioner responsible for the euro and economic and monetary affairs, told MEPs during the same debate: "We have come a long way in the past two or three years in reforming our economic governance. We need to continue to work for policies that will help Europe to return next year to recovery."
Making the labour market work
Spanish Christian Democrat MEP Veronica Lope Fontagné, who covers the survey on behalf of the employment committee, called on 28 November for reform of the employment market in order to create more jobs. "The labour markets have to be more dynamic. Poverty and social exclusion is a fact. Youth employment is a major problem throughout Europe."
László Andor, the commissioner responsible for employment, social affairs and inclusion, said during the debate: "We need to boost job creation and particularly the demand for labour. Taxation on labour is still too high, especially on low paid workers. We need to create a shift to other sources of taxation such as pollution or property." Regarding youth employment, the commissioner admitted there was a significant problem with young people making the transition from education to employment.