18/10/2010

We need consolidation and investment in the EU to get our economies back on track

By Othmar Karas MEP, Vice-Chairman of the EPP Group and its Coordinator in the Special Committee on the Financial, Economic and Social Crisis (CRIS).

There is an urgent need for more Europe; for political and intellectual leadership to put the European project back on track. Europe must get the resources it needs to meet its ambitions; the EU budget needs to be strategically focused.

Equally important is to bring EU Member States' public deficits under control and to ensure we do not place an unbearable burden of excessive debt on future generations. The necessary tools and resources must be made available for future growth.


Special Committee on the Financial, Economic and Social Crisis

These are important results from the European Parliaments' Special Committee on the Financial Economic and Social Crisis, which over the past year has analysed and evaluated the extent of the crisis as well as its impact on the Union and its Member States.

As EPP Group Coordinator of the Special Committee and together with Sirpa Pietikäinen as EPP Group Shadow Rapporteur, we did our best to contribute to a draft report which, several months ago, was still set to fail.

In the meantime the report, which makes recommendations on how to avoid a repeat of the crisis, has evolved into a substantial contribution to finding a sustainable solution. My group led the negotiations and has been at the origin of the new draft proposal put forward at the beginning of September. This new proposal, up for vote on Wednesday 20 October in plenary, reflects the EPP Group's blueprint and has replaced the initial draft report which was perceived as ideologically biased and was therefore subject to 1625 amendments.

The report is based on different thematic papers. All three EPP Group papers were taken on board and became an integral part of Parliament's recommendations: Danuta Hübner's on Cohesion, Alain Lamassoure's on Budget and Regina Bastos' on SMEs.


Parliament's conclusions

Fiscal consolidation is urgent, because macro-economic stability is a basic premise for a sustainable budget, sustainable growth and social cohesion.
Incentives must be established for those Member States that show commitment to sound public finances and sustainable economic models.

Investment that was initially put in place to stop economies collapsing should be streamlined and directed towards long-term areas. The effects on competitiveness of European legislation must be examined and quantified to allow legislators to contribute to raising Europe's competitiveness and avoid placing unnecessary burdens on economic actors.

The European Social Market Economy is one of the greatest achievements of the Union and it is the engine of recovery. In the light of the crisis, it needs to be revitalized and made sustainable, whilst upholding the values it enshrines.

To fight inequalities and reduce the gap between the rich and the poor in every Member State and among Member States, social protection systems must be improved by pursuing long-term policies which focus primarily on the job sector, providing more employment stability as well as flexibility and mobility, and a dynamic economy capable of sustaining social systems.

The EU must be equipped with economic governance mechanisms that are suitable both for normal times and times of emergency. Monetary union requires a strong coordination of economic, fiscal and social policies. Consequently, the EU should be better equipped with countercyclical economic policy management instruments. Crisis management is not an alternative to the corrective policy actions and fundamental reforms needed to reinforce the foundations of European Monetary Union.

The EU 2020 strategy should serve as a concrete programme for strategic long-term investment and employment, for facing the economic crisis and strengthening the internal market.

A new strategy should encourage labour markets to improve incentives and conditions for people at work while, at the same time, increasing the incentives for employers to recruit and retain staff. It is important to facilitate mobility, which also makes it easier for companies to find the skills they need and for the single market to function better, even in times of crisis. Workforce mobility needs to go hand-in-hand with an improvement in working conditions.

Education should be placed at the very heart of the EU's economic strategy, with the goal of raising the overall quality of all levels of education and training in the EU, combining both excellence and equity, and reforming the educational model.

Last but not least we need an ambitious long-term strategy against poverty that aims to reduce inequalities and social exclusion and sets far-reaching targets for poverty reduction. So that the crisis does not further increase inequalities the EU needs to link its actions on employment to measures to combat poverty and social exclusion, together with ensuring an effectively functioning internal market for workers within the EU. We need to promote a policy strategy that privileges inclusiveness and not simple assistance.


Next steps

After a vote by Parliament on 20 October and during the second term of its mandate, the Crisis Committee will consult national parliaments - an idea put forward by the EPP Group as a way of putting into practice the ideas of the Lisbon Treaty and including the Member States in the process.

We will therefore work closely with our counterparts in national parliaments over the next few months until the final report is negotiated.