1 European Semester, 3 European Commissioners and 5 different reports. Amid the flood of information on economic governance in the EU, what did we learn from the European Commission this week in terms of economic and social intentions for 2015?
In the first of its reports, the Annual Growth Survey, to commission is setting out a more general stall with regard to economic and social priorities. In a nutshell, these involve boosting investment, renewing commitments for structural reform and continued fiscal responsibility. This falls in line with the Commission’s investment package.
The social element to these priorities is still not clear. In recent years, structural reforms and fiscal responsibility have not led to any improvement in the social situation of people in Europe.
In the second document, the Alert Mechanism Report, the commission reviews potential economic risks in Europe. For Ireland, Cyprus, Greece, Spain, Portugal, Romania and Slovenia, while improvements have been made, still hold current account deficits. A lack of investment has meant demand has been squashed.
Germany and the Netherlands on the other still hold high surpluses. This means low domestic investment and demand which can lead to negative spill-over effects for other countries. These imbalances, on either side, mean the Commission will keep a close eye on developments in these countries.
Thirdly, the Joint Employment Report has been released. This report analyses employment and social trends and presents policy responses used by Member States to improve the employment and social performance.
What do we learn about the employment situation in Europe? Long term unemployment, accounting for half of all unemployment is still on the rise. Unemployment remains a particular problem for young people.
To address the employment situation, the Commission wants to see the focus on stimulating the real economy through investment, tackling undeclared work, shifting the burden of taxes away from the labour force, investing in skills, in particular for young people, and modernising social protection systems.
In recent years, the definition of modernisation in the Commission’s dictionary has leaned towards cutting back on staff and restructuring without consulting staff. With social dialogue being named as the cornerstone of the new Joint Employment Report, to repeat this in the ‘modernisation’ of administrations dealing with social protection would be a mistake.
The final publication of the Commission from last week came in the form of opinions on draft budgetary plans of euro area Member States. In other words, the Commission assesses whether or not a country has been listening to the EU’s ‘advice’ in the form of the last Country Specific Recommendations. These opinions can be read on a country-to-country basis.
With the arrival of investment into the European Semester’s equation, there is potential for a fresh start for the direction of Europe’s economy. However, the Commission’s continued, arguably even renewed, determination to follow the path of structural reforms and promote modernisation, there is a risk that bad habits will continue. The commitment to the social dimension of economic governance remains vague, blurred and badly communicated. This will not achieve the ownership needed for the European Semester to succeed in the long term.