Motion for a resolution - B7-0106/2011Motion for a resolution



to wind up the debate on statements by the Council and the Commission
pursuant to Rule 110(2) of the Rules of Procedure

Lothar Bisky, Cornelia Ernst, Thomas Händel, Jacky Hénin, Patrick Le Hyaric, Marisa Matias, Willy Meyer, Miguel Portas, Alfreds Rubiks, Eva-Britt Svensson, Rui Tavares, Marie-Christine Vergiat, Sabine Wils, Gabriele Zimmer, Nikolaos Chountis, Jürgen Klute, Ilda Figueiredo, Kyriacos Triantaphyllides on behalf of the GUE/NGL Group

Procedure : 2010/3013(RSP)
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European Parliament resolution on Europe 2020

The European Parliament,

–   having regard to the Europe 2020 Integrated Guidelines as adopted by the Council in 2010 (Part I - BEPGs, Part II - Employment Guidelines),

–   having regard to the Councils Conclusions of 17 June 2010 (Europe 2020 Strategy), of 16 December 2010 (Economic Governance) and of 4 February 2011 (Europe 2020 Energy Policy, Innovation),

–   having regard to the Commission’s proposals on the economic governance legislative package (excessive deficit procedure, correction of macroeconomic imbalances) of 29 September 2010,

–   having regard to the Commission Communication entitled ‘Annual Growth Survey: advancing the EU’s comprehensive response to the crisis’ (COM(2011) 11 final),

–   having regard to Rule 110(2) of its Rules of Procedure,

A. whereas the Commission’s Annual Growth Survey launched the first cycle of the European Semester, as approved by the European Council on 7 September 2010, focusing on an ex-ante coordination of budgetary and economic policies in line with the Stability and Growth Pact on the one hand and the Europe 2020 Strategy on the other hand; whereas the March 2011 Council is expected to provide ‘guidance’ for member states’ policies in both areas,

B.  whereas the Commission predicts optimistically that there are ‘signs of economic recovery, but still uneven’; whereas in reality in 2010 and onwards most member states still faced a situation of economic stagnation, some fell into a double-dip recession, others had persistently negative growth rates and only very few of them could benefit in 2010 from ‘growing exports after the resumption of global trade’; whereas even for these latter exporting countries a slowdown in economic growth is expected for 2011,

C. whereas the Commission emphasizes that ‘the financial sector has not yet returned to normal conditions and there are situations of vulnerability to stress and dependency on state-support’, that credit is still tight and that ‘in a number of Member States household and corporate debts are still excessive’,

D. whereas the Commission’s critical analysis of the situation of the financial sector might still paint a much too rosy picture of the real situation: Many European banks hold mountains of debt – government, bank and property; many are, in effect, illiquid and depend on cheap ECB finance to stay afloat; many have also incurred huge losses that they have only partly recognised, and as a result, some are, in effect, insolvent,

E.  whereas so far the European Union and member states governments have not implemented the necessary reforms so that the financial sector must operate first and foremost in the public interest, accept lower returns and be geared to risk-aversion and long-term targets instead of short-term profits, nor did they deliver on the necessary reforms for a stricter regulation of financial markets,

F.  whereas the Council Conclusions of 4 February 2011 addressed the need for ‘ambitious stress tests’ for the banks; whereas the bank stress tests already applied by the EU were obviously not stringent enough, as they gave both Bank of Ireland and Allied Irish Bank a clean bill of health, whose aggravating problems only shortly afterwards triggered the euro-area bailout for Ireland,

G. whereas EU governments took action so that banks’ bondholders must be protected at all costs, preferring to impose losses on taxpayers instead – even if this stretches governments’ solvency to breaking point; whereas this is the underlying rationale of the European Stability Mechanism, triggering a further deepening of austerity policies across the European Union, thus putting the financial burden of rescuing the financial sector again on the ordinary population of workers, pensioners etc., whose jobs, wages, social benefits and rights are heavily under attack,

H. whereas according to the draft Joint Employment Report, EU unemployment now stands at 23.1 million persons (9.6 per cent, about 20 per cent in some member states) - 5.6 million people lower than its peak level in the second quarter of 2008 - and EU youth unemployment stands at 20.4 per cent (more than 40 per cent in some member states); whereas growth in real unit labour costs in the EU has been falling since mid 2009, to reach -2% per annum in second quarter 2010,

I.   whereas unemployment will be further aggravated by the EU’s austerity drive and member states’ decisions - imposed on some in the context of the joint EU-IMF bailouts - to severely cut down public sector employment,

J.   whereas the General Secretary of the European Trade Union Confederation, John Monks, recently stated in a letter to Commissioner Olli Rehn that ‘the proposals on economic governance are likely to generalise these pressures in the euro-zone and beyond, and not just apply to countries in difficulties on the world’s bond markets’, and that ‘the ETUC will find it impossible to support action by the EU along these lines, or proposals on economic governance, and any new treaty which contains them, which resemble in some aspects the reparation (punishment) provisions of the Treaty of Versailles, and reduce member states to quasi colonial status’,

K. whereas EU and member states austerity policies – severe cuts in public investment, continuous dismantling of social protection and the welfare state, a further wave of privatisation of public services, curbing of wages, raising VAT rates etc. – will result in a further weakening of purchasing power and internal demand, a decrease of tax receipts and a prolonging of economic stagnation or a falling back to recession, and with such austerity policies the officially proclaimed aim of reducing public debt, increasing employment and ‘greening the economy’ very likely will not be achieved,

General Remarks - Europe 2020 and its implementation

1.  Strongly opposes the proposal by German chancellor Merkel and French President Sarkozy on a ‘Competitiveness Pact’, which demands to end wage indexation, to raise retirement ages to 67, to harmonize tax and labour policies, and to lock debt limits into national constitutions across the euro zone; calls on the Council to reject this proposal;

2.  Strongly opposes the Europe 2020 Strategy, as it does not provide any solutions for the problems of the population and also continues and reinforces the mistaken EU policies which led to the crisis; strongly criticises that equality for women is not at all being addressed; points out that against the background of increased unemployment and increasing poverty, the strategy does not provide a clear focus on how to effectively reduce it via economic, social and employment policy instruments for environmental and social sustainable development and full employment with workers’ rights;

3.  Points out that by pursuing the current course of fiscal retrenchment, it will not be possible to generate sufficient investment for greening the economy, creating new employment, improving education, skills and competencies, combating poverty and social exclusion to meet the EU 2020 targets and objectives; considers, therefore, that the EU 2020 strategy from the start is based on hollow promises which can not be met by following the ‘new macro-economic policy’ as envisaged by Commission and Council;

4.  Highlights that the current EU budget even fails to provide the Europe 2020 flagship initiatives with corresponding budgetary resources and that without an adaptation of the current multi-annual financial framework (MFF) there is no chance to execute Europe 2020 in the EU’s annual budgets before 2014; emphasizes that this sheds some dazzling light on how serious the Council - always intent on curbing the EU budget while enlarging the EU’s tasks - takes its own commitments to Europe 2020;

5.  Underlines that the 4 February 2011 Council Conclusions on energy infrastructure provide sample evidence on this: against the background of austerity policies to be pursued at home, member states put down the Commission’s demands for strong public investment in ‘smart electricity grids’ to promote the use of renewable energies, and instead the Council insisted that ‘the bulk of the important financing costs for infrastructure investments will have to be delivered by the market, with costs recovered through tariffs’ - that is higher prices for consumers;

6.  Considers that most electricity providers and network providers do not have much interest in developing a de-centralised renewable energy infrastructure and the smart electricity grids needed for them; strongly criticises that the Council’s decision is single-mindedly pushing for the completion of the liberalised internal energy market by 2014, while slowing down the much needed fast increase in the use of renewable energy sources; points out that even the modest Europe 2020 energy and climate targets will most probably not be achieved by pursuing such an approach;

7.  Points out that, despite some superficial rhetoric about ‘reducing poverty and social exclusion’ (European Platform against Poverty) and ‘protecting the most vulnerable groups in society’ in the framework of ‘fiscal consolidation policies’, the Commission successfully insisted on implementing cuts in minimum wages (Ireland, Latvia), social benefits (Ireland, Greece, Latvia) and the provision of health care and hospital care (Latvia, Romania, Greece, Hungary) in the framework of EU-IMF led ‘rescue packages’; strongly criticises these policies and calls on the Commission and the Council to revoke the conditionality requirements imposed on these countries;

8.  Points out that member states’ austerity policies as pursued in the framework of complying with the Stability and Growth Pact will increase poverty and social exclusion, making it very unlikely that even the modest Europe 2020 headline target on reducing poverty will be achieved;

9.  Underlines that the Europe 2020 Integrated Guidelines demand a heavy handed approach from member states pushing for a decentralisation of collective bargaining, flexibilisation of employment, freezing and curbing public sector wages (guideline 2: ‘Adequate wage setting in the public sector should be regarded as an important signal to ensure wage moderation in the private sector in line with the need to improve competitiveness’); points out that the Treaty excludes issues of pay and collective bargaining from its scope and calls on the Council to delete such recommendations from the Europe 2020 Integrated Guidelines;

10. Strongly criticises that in the framework of EU-IMF led ‘rescue packages’, the Commission issued diktats on making the pay out of funds conditional on cutting minimum wages, reducing wage ‘rigidities’, cutting pension entitlements, making labour markets more flexible and ‘aligning wages more closely with firm-level productivity, including through reform of arbitration and collective bargaining systems’; points out that these policies constitute a severe violation of the rights to social dialogue and collective bargaining; calls on the Commission and the Council to revoke such requirements for EU-IMF assistance;

11. Highlights the Commission’s analysis of the member states’ Draft National Reform Programmes for implementing the Europe 2020 Strategy, complaining in general about a ‘a relatively low level of ambition in setting national targets and of an excessive focus on the short term’ and warning that member states ‘cumulative efforts would fall significantly short (reaching less than 10%) of the EU overall target of reducing energy consumption by 20% by 2020’, and of similar failures on the education and poverty reduction targets;

12. Points out that - against the background of the drastically reduced number of 5 very modest headline targets in Europe 2020 in comparison to the Lisbon Strategy - a similar ‘implementation gap’ seems to open up with respect to Europe 2020, as was the case with the Lisbon Strategy in the past decade; considers that the exercise of annual reviews of ‘National Reform Programmes’ might not be worth the effort and simply a waste of time;

The Annual Growth Survey, Economic Governance and the European Semester

13. Strongly opposes the Commission’s recommendations contained in its Annual Growth Survey, which focus on a much more rigorous reduction of deficits as already demanded by the Stability and Growth Pact, on increasing indirect taxes (which will hit the poor and vulnerable hardest), on ‘strict and sustained wage moderation, including the revision of indexation clauses in bargaining systems’, on the alleged need to ‘increase the retirement age and link it with life expectancy’ - despite the fact that the EU does not have any competences on statutory pensions or collective bargaining, on the further liberalisation of services and the internal market etc.; calls on the Council to reject this approach when drawing up ‘guidance’ for member states policies;

14. Calls on the Council to reject the Commission’s legislative proposals on the excessive deficit procedure, as these will worsen the pro-cyclical nature of the Stability and Growth Pact and worsen the economic downturn which, in turn, will make it even more difficult to reach the targets on public finances;

15. Calls on the Council to reject the Commission’s legislative proposals on the correction of macro-economic imbalances, as by systematically linking ‘imbalances’ with ‘competitiveness’, the whole focus of adjustment is being put on ‘external deficit’ countries only; highlights that high inequalities (and in particular the rising share of profits and the falling share of labour) produce excess savings and that the strategy of countries abusing the single currency by building ‘surpluses’ through wage moderation coming at the expense of other member states is not being mentioned at all as a problem - instead surplus countries are asked to further deregulate their services sectors;

16. Highlights that the surplus countries need to shift their economic development to strengthen internal demand and their domestic economy, inter alia by allowing for higher wages; proposes to establish a ‘clearing union’ mechanism within the EU-27 obliging the surplus countries to pay positive interest rates to the deficit countries, thus allowing those to invest in environmental and social sustainable production, services and infrastructure, increase productivity and reduce deficits; strongly opposes any sanctions against countries with current account deficits;

17. Calls on the Council to abandon its project of a ‘limited treaty change to set up the European Stability Mechanism’, as in its current conception the ESM would only serve to bail out the banks for the second time, while in return a self-defeating austerity drive is launched against the remnants of the welfare state, the incomes and living standards of ordinary people to pay back these debts; calls for an EU-wide solution that forces banks to recognise their losses and bondholders to recapitalise them if necessary, raising additional capital, first from the market and then by converting bondholders’ bonds into shares;

The need for an alternative policy on EU socio-economic governance

18. Insists that further fiscal stimulus is needed for the next three to five years to combat economic stagnation and develop an entry strategy for new employment: a new, stronger and better targeted EU Recovery Plan which is gender-equality streamlined in all of its components, mobilising one per cent of EU GDP each year for investing in environmentally, socially and economically sustainable development, to promote equity, full employment with ‘good work’, greening the economy, social welfare, eradicating poverty and social exclusion and creating improved social and territorial cohesion across the EU; highlights that this must be accompanied by similar measures at member states level to be coherently co-ordinated between them and EU level action;

19. Stresses that the European Union should mobilize and use its funds (EIB, EBRD, EFSM etc.) at the low ECB 1 % interest rate for lending for investment instead of demanding austerity, with a focus on those countries most in need of a demand stimulus, and also by advancing Community funds (Structural and Cohesion Funds) without the need for national counterparts;

20. Calls on the Council to broaden the mandate of the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), so that their lending policies can cover the whole range of the new European Recovery Plan (e.g. including sustainable industrial policy etc.);

21. Underlines that an employment and income multiplier between one and a half and two for such public sector led investment can be reached, thus offering prospects that measures taken under the EU Recovery Plan can be self financing to a great extent;

22. Emphasises that any financial support to member states must be linked to European Social Model principles, strictly steer away from public sector cuts, deflationary wage freezes etc. and be sequenced in time so as to avoid pro-cyclical fiscal retrenchment;

23. Points out that the EU and member states should implement mechanisms for a targeted and democratically controlled public steering of investment from the new recovery plan to those sectors of the economy most affected by the crisis, to newly emerging sustainable industries and services and to disadvantaged regions; insists on the active involvement and participation of those affected by these investments;

24. Stresses that whenever member states provide aids, re-capitalisation and financial guarantees for companies in trouble, this should translate accordingly into increased public shares in voting interest and future profits and be used to influence companies investment strategies; points out that member states should implement measures to enhance economic democracy, change the governance of companies in order to strengthen the position of workers, trade unions and consumers and the social and environmental dimension in the strategic choices of companies and public services;

25. Calls on the Council to establish an EU level general Financial Transaction Tax (FTT) to curb speculation and to ensure that the financial sector contributes fairly towards economic recovery and re-financing the fiscal burden of public rescue operations; points out that according to recent studies, in Europe a general FTT of 0.1 per cent could raise annual revenues of 2.1 per cent of GDP (approximately 262 billion EUR); proposes that revenues from a general FTT should be used for development assistance, anti-crisis measures and for promoting sustainable development;

26. Calls on the member states to increase taxes on bank’s and manager’s bonuses, on income from capital (dividends, interest rates), on capital gains and on big fortunes and inheritances, using the receipts from these to increase public sector led investment; points out that in this way demand dynamics can be strengthened and embedded into a strategy for environmentally and socially sustainable development, with a perspective of diminishing deficits in the medium term; points out that member states should provide for cuts in military spending and in subsidies harmful to the environment to assist fiscal consolidation;

27. Takes the view that the constitution of a publicly owned financial pole (nationalised banks, local and regional savings banks) in close association with social economy banks (co-operative banks, mutual banks) are urgently needed to steer credit towards socially and environmentally useful investment which creates high quality employment with workers’ rights; considers that decision making on credit policies of the financial sector must come under democratic public control and democratic participation of employees and consumers;

28. Insists on strong measures to curb financial market speculation; highlights that immediate urgency measures are needed to prohibit naked short-selling and trading in credit default swaps and to establish a public European rating agency; points out that hedge funds and private equity funds should be prohibited to operate in the EU or at least severely restricted and offshore centres closed down; calls on the Commission and the Council to speed up tighter regulation of financial sector oversight;

29. Considers that depressing wages and forcing Europe’s workers to undercut each others salaries will trigger deflation, reduce purchasing power and internal demand and increase the risk that the economy will fall back into recession; insists on the need to establish effective wage floors at the bottom of the labour markets (minimum wages, additionally the concept of a living wage), the implementation of the principle of equal treatment and equal pay for equal work or work of equal value at the same workplace and allowing for upward wage developments compensating inflation, productivity increases and a strong re-distribution component;

30. Underlines that as a matter of urgency, the gender pay gap must be reduced to 0 - 5 % by 2020, i.e. by drawing up phased economy-wide plans with clear-cut goals to be supported by collective bargaining and the training of equality advisers; points out that direct and indirect forms of gender based discrimination must be overcome, also by addressing the unequal share of unpaid work between women and men and laying down equality plans for factories and other workplaces;

31. Maintains its position on the EU Gender Equality Strategy 2010-2012; proposes that the EU’s new gender equality strategy must constitute an agenda for action and a political commitment based on the Beijing Platform for Action and its achievements, bearing in mind that the human rights of women and girls form an inalienable, indivisible and integral part of universal human rights;

32. Emphasizes the importance of combating stereotypes in all walks and at all stages of life, since these are one of the most persistent causes of inequality between men and women, affecting their choices in the field of education, training and employment, the distribution of domestic and family responsibilities, participation in public life and participation and representation in decision-making positions, and their choices regarding the labour market; calls for a directive on preventing violence against women;

33. Insists on its demands on a targeted approach to combat poverty and social exclusion, in particular on an overall target to reduce child poverty by 50 per cent and an end to street homelessness by 2015, on an EU target for minimum wages (statutory, collective agreements at national, regional or sectoral levels) to provide for a remuneration of at least 60% of the respective (national, sectoral etc.) average wage, an EU target for minimum income schemes and contributory replacement income schemes of providing income support of at least 60% of national median equalised income and on a timetable as to when these targets shall be achieved by all Member States; points out that the lack of proper housing must be dealt with at European and member states level in order to eradicate homelessness and a particular emphasis is needed to combat extreme poverty;

34. Emphasises that the European Employment Strategy (EES) must not be based on the flexicurity approach, but instead start from the concept of ‘Good Work’ as its central reference point, with a strong focus on promoting gender equality, quality in work, improved social security and social inclusion, enhancing existing and introducing new workers rights, promoting health and safety at work, better social risk management and the reconciliation of work and non-work life; insists that Member States should take effective measures to phase out precarious and atypical employment;

35. Considers that any meaningful debate on changing the EU Treaty in light of the crises must focus first and foremost on abandoning the monetarist architecture enshrined in it: abolish the dysfunctional Maastricht criteria for the European Monetary Union, establish criteria for ‘real convergence’ and support mechanisms for member states to achieve this, revoke the Stability and Growth Pact and replace it by an Employment and Sustainable Development Pact, reshape the statute of the European Central Bank in order to make it democratically accountable and abandon its ‘absolute independence’, to redefine its mission as to support sustainable balanced economic development, full employment, financial stability and price and exchange rate stability, to name only some of the most important Treaty changes to be addressed;

36. Insists, with a view to the debate on the single market, on the introduction of a Social Progress Clause in EU primary law, stipulating that fundamental rights in general and the right to strike and industrial action, to collective bargaining etc. always have primacy over the ‘fundamental freedoms’ of the internal market;

37. Instructs its President to forward this resolution to the Council, the Commission and the governments and parliaments of the Member States.