EU growth

7.12.2012

Question for oral answer O-000210/2012
to the Commission
Rule 115
Hannes Swoboda, Elisa Ferreira
on behalf of the S&D Group

In its recent Annual Growth Survey (AGS), the Commission predicts a gradual return to GDP growth of only 0.1 % for next year. It recommends achieving this very moderate recovery by applying the same economic policy strategy as has already been applied since 2011. However, 2011 official statistics show that this policy has led large parts of the euro area into the current double-dip recession, and pushed another 2 million EU citizens into unemployment over the last 12 months alone.

New independent research indicates that the continuation of the highly restrictive fiscal policy stance across the EU and the euro area will prolong the prevailing recession during the whole of next year, as economic textbooks would predict.

1.  Can the Commission identify the ‘differentiated and growth-friendly’ elements in its AGS recommendations on fiscal consolidation?

2.  Can the Commission explain why the AGS does not call for a more expansionary fiscal stance from those Member States which are in chronic surplus and which face low or negative real interest rates, since this would both boost EU growth and tackle one of the economic imbalances underlying the euro area crisis?

3.  Following the IMF analysis of ‘fiscal multipliers’ in its latest World Economic Outlook, can the Commission provide detailed information on the multiplier values used for its spring and autumn 2012 forecasting exercises? Can the Commission confirm that the 2012 AGS policy recommendations were based on an internal calculation of the impact of austerity on growth and jobs which the IMF considers to be a substantial underestimate? Can it confirm that, if the IMF calculations are right, then mistaken policy recommendations from the Commission have needlessly caused a weakening of the European economy, job losses and excessive cuts in public services and public investment?

4.  Does the Commission agree that if the next round of forecasts in February 2013 were to indicate negative growth prospects for the rest of the year, this would imperatively and rapidly have to lead to a revision of the current – highly restrictive – stance of national fiscal policies by using the existing policy room for manoeuvre within the reinforced Stability and Growth Pact in order to reignite growth?

Tabled: 7.12.2012

Forwarded: 11.12.2012

Deadline for reply: 18.12.2012