Analytics, Employment, EU – Baltic States, Investments, Markets and Companies

Vise-president underlined three issues that are important for the EU members in the pursuit of better economic growth and jobs.

= First, the member states need to accelerate structural reforms. Without real reforms, effectively implemented, it is not possible to reach sustainable growth and job creation: no country in the EU is immune from the need to reform. The Commission’s challenge is how to use the existing economic governance framework more efficiently to support the adoption and implementation of structural reforms by the EU-28 member states.

= Second, the member states need to ensure sustainable fiscal policies, while improving the quality of public spending.

When money is tight, there is little choice but to make savings, but there is always a choice as to how to make those savings. Reducing expenditure rather than raising taxes, and cutting current expenditure rather than future-oriented investments, can ensure that fiscal consolidation is growth-friendly.

The EU’s fiscal rules allow for some flexibility, provided that economic grounds exist for adjusting targets. Flexibility should be granted because it makes economic sense, not for any other reason. The application of flexibility should not in any way undermine the credibility of Union’s fiscal framework, added vise-president.

= Third, the member states must support investment, both public and private; the Commission shall work at both national and European level to do this.

At national level, countries with large current account surpluses should commit to invest more. And all countries should prioritise investments in research and development and key infrastructure.

At European level, the extra public resources that the Commission will mobilise should be used in particular to draw in more private investment. This will be a guiding principle underpinning the €300 billion investment plan announced by President-elect Juncker, which will be prepared in the coming months.

€300 billion Commission’s package

At the same time, some factors are holding back private investment in Europe. Hence, the EU institutions have to ensure such business climate and regulatory environment that are favourable to companies investing in the future, innovating, developing new markets and creating new jobs.

In this regard, important consequences are expected from the €300 billion Commission’s package, which is not yet available because the new Commission has not started.

There are two valuable parts in this package: the first is the public part, which clear ways for more efficient mode to use public resources and public funds in order to finance investments.  The other part is concerning the ways to devise the processes for creating a better internal market in the EU, in general, and a single market for various industries.

The vise-president underlined that “the latter part is even more challenging that the first part, because we have to find right tools, right obstacles and right answers in order to create a better Single Market, for instance, for digital products”.

Reference: European Commission - SPEECH/14/596 “Speaking points at the Press Conference of the Eurogroup”, 12/09/2014, Milan, 12 September 2014.