Editor's note

The Commission sees the way forward in the European business and economy through decisive moves into a phase of strong and sustainable recovery. That implies continuing work on “three parallel fronts”: boosting investment, accelerating structural reforms, and promoting fiscal responsibility through growth-friendly fiscal consolidation. The first two are the directions for an active business and entrepreneurship policies in the member states.

The Commission’s program is guided by the principle of "political discontinuity", which means the commitment to legislate better, notably by reducing red tape and by doing away with the regulatory burden that weighs on investment in Europe. For example, the Commission plans to amend or withdraw 80 existing proposals for either political or technical reasons.

The design of the new investment fund means that the €21 billion in guarantees would be provided by the EU budget and the European Investment Bank; this sum is deemed to mobilize over €300 billion in additional public/private investment over the next three years.

Investment plan for Europe

The Commission already assessed the size of the present EU’s “investment gap”: investments in Europe remain around a fifth below the pre-crisis levels around 2008.

The Commission’s “investment plan for Europe”, which received the strong backing by the EU heads of state and government, constitutes a determined and decisive step towards increased public/private interest in investments.

The plan is based on three main pillars:

·         Mobilising finance – using EU level instruments in a new and smarter way to boost strategic investment through the creation of a new European Fund for Strategic Investments, which will bring confidence to investors by taking a large part of project risks out of the equation and helping riskier projects to find private financing;  

·         Making finance reach the real economy – through a stronger, more transparent pipeline of projects, supported by technical assistance;

·         Improving the investment environment – by removing non-financial regulatory barriers in the EU single market.

With the EU institutions elected afresh at the end of 2014, the new EU policies were aimed at reviving the economy with a new strategic context. Jean-Claude Juncker's work program heralds a real break with the past: with less regulation (83 draft bills have been already cut and only 25 drafts retained) the program is focused on a vital aspect, i.e. reviving the economy and business activity.  

The plan is innovative because, for the first time, the Union's budget will be contributing to real economy and will be managed by the European Investment Bank, far out of the reach of national political clientelism. Besides, € 315 billion have been envisioned if the member states intend to join in and participate in the newly created Investment Fund.

Activating investment process

The time has now come for investment-financed recovery; however not all EU states have followed the investment activity, e.g. France and Italy are struggling to balance their budgets. Nothing seems questionable in the approach of the above-mentioned three “investment phases” which correspond to European reality.

Uncertainties for 2015

A world in full transition, in which uncertainty prevails, is expected in 2015; it feeds the fears that any extraordinary periods generate instability. But only in this way the future is being prepared. Nothing can be taken for granted: not the emerging states, e.g. at least five global development centers are being created (the EU, US, Asia, Africa and South America); India, China and Brazil (while are experiencing in increased production and real middle class) are suffering the volatility of resources; nor the multi-nationals, which still believe in refuge through tiny undetectable tax havens. The future is being laid down, while major world issues often remind of pressing problems, i.e. immigration, trade, cross-border crime, and environment, to name a few. The world has to learn to forge its future by cooperating efforts…

In this context the European Union is just one step ahead – it is accustomed to supra-nationality – and is also lagging somewhat behind – since it still has not completed everything that this implies.

Most important challenge ahead is the EU’s ability to decide what spheres and sectors can be shared in the path towards economic policy’s efficiency. One thing is certain –economic integration, as the EU general priority, shall continue in the years to come. Though, the EU has to set some common, strategic goals (agreed by all the EU states) which would protect the Union’s world interests.

One example in the promotion of the extended facilities for trade: global maritime facilities, i.e. seas and oceans comprise over 70 per cent of the planet’s surface. This is an enormous reserve to be used for the world's trade and travel; besides, this is where tomorrow's mineral resources lie. The Union is the world's leading maritime power thanks to the range of its exclusive economic zones; and the EU member states have to explore this actively.

The dimensions of the European unity have been preserved and extended successfully during last twenty years –in numbers, from 15 to 28 member states. Europe's successes in political and economic integration are indeed real; however, “the burning obligation to complete unification is more urgent than ever before”. As J.D Giuliani said, “Let's hope our leaders will be able to move on to a higher level and by doing this contribute to writing some more pages of history”.

Reference: http://www.jd-giuliani.eu/en/article/cat-2/411_Europe-and-now-for-recovery.html

Europe’s last chance: starting point

Commission President Juncker said in his “investment plan”, that the move towards investments was Europe’s last chance, i.e. last chance for young people once again see Europe as a source of economic opportunity, of social mobility, and of hope.

For people of older generation, Europe’s meaning is as profound as it has been; by contrast, for most young Europeans today – peace, stability and open societies are taken for granted. These young people look to the European Union instead to offer them economic growth, job opportunities, geographical and social mobility. And many of them, after the long and painful crisis, are deeply disillusioned.

It was seen during the European Parliament elections in June 2014, when populist forces and extremists of both left and right squeezed the pro-European parties, though fortunately they emerged with a clearly workable majority. In order to reverse the negative tide and rebuild confidence in the EU initiatives, the Union institutions have to deliver on the economic policy adequate to European citizens’ wishes. Otherwise the European Union risks losing the support of both the EU people and the member states…

Therefore, the Commission’s challenge is to kick-start economic growth in Europe, without reversing the already acquired stabilisation. In this context, two encouraging developments constitute the starting point:

a) comprehensive assessment of the euro zone banking system by the European Central Bank, and wider EU banking system creation under the coordination of the European Banking Authority. This move provides a clear picture of the soundness of the European banking system that is a precondition for a sustainable recovery in credit to the real economy and thus for investment and growth.

b) Commission’s steps towards an appropriate balance between sustainability requirements and the current weak cyclical conditions. In fact, the aggregate fiscal stance in the euro-zone is broadly neutral, e.g. fiscal policy is neither being tightened nor loosened.

The Commission will make important announcements in January 2015 concerning flexible application of the mentioned two development directions in a smarter and more effective way, while ensuring that EU common fiscal rules are respected so that they remain an anchor of stability.

Source: http://europa.eu/rapid/press-release_SPEECH-14-2840_en.htm?locale=en