European Council: The public sector and social investments must drive the EFSI and the European Semester!

On the occasion of today’s discussions in the European Council, CESI regrets the lack of ambition and boldness expressed by the European leaders to acknowledge the role of social investments and public expenditure and the importance of the public administrations in the European Semester and the forthcoming European Fund for Strategic Investments (EFSI).

European Council: The public sector and social investments must drive the EFSI and the European Semester!

While supporting the idea of a coordinated and large-scale investment plan for Europe, CESI believes that it must be ensured that the EFSI’s performance will not be undermined by the desires of private investors to maximise the short-term returns on their investments. Otherwise, EFSI projects would certainly be pursued only in the relatively advantaged regions and sectors where private investors have good prospects to make quick financial gains.

This rules out most actions in the field of social investments and services of general interest, which are vital for the sustained wellbeing of the society as a whole but which do not usually provide for significant financial profits for private investors in the short-term.

Consequently, CESI calls for the EFSI to be adopted and implemented in such a way that will allow fostered social investments and a reinforced provision of quality services of general interest.

In this context, CESI also regrets the lack of further initiatives at the national and EU-level that highlight the economic and societal benefits of enabling the public sector to provide quality services of general interest for the common good. This is, unfortunately, especially true with regards to the European Semester and the 2015 Annual Growth Survey (AGS), which focus overly on market-oriented investments and cuts to public spending. CESI has severe doubts if setting such priorities will be beneficial for the economies and societies in the long-run and would like to see more commitment by European leaders to stop excessive austerity in public accounts as has been repeatedly advocated througout the European Semester process.

CESI also fully supports and endorses the statement by the European Semester Alliance issued on the occasion of the European Summit of March 19-20.