CEEP: “Fiscal consolidation and financial repair necessary, but not sufficient to deliver growth”

Date

21 Feb 2012

Sections

Social Europe & Jobs

This was the key message that Milena Angelova, Executive Vice President of CEEP, presented at the Macroeconomic Dialogue meeting of the European social partners with EU economic policy makers today in Brussels.

Crisis resolution has enjoyed highest political priority for a long time now, and much has

already been accomplished. Unfortunately, we are still far away from the results we all

would like to achieve, since the crisis has been constantly re-appearing in an ever changing form. Ms Angelova stated: “The reason for this, in our view, is that spill-over effects have proven stronger than anticipated – spill-overs between countries and regions, between the financial and real sectors, and also between the private and public sectors.”

In her intervention Milena Angelova also expressed concerns that the sovereign debt crisis is addressed in a way which may produce lasting damage to both our economies and societies. Some Member States seem to give undue priority to achieving ambitious – and partly overambitious – deficit targets over wider economic and social considerations. This could harm the factors of growth, affect the business environment negatively in the medium and longrun, and create social tensions.

In this context, regarding the recommendation on keeping public expenditure growth below medium-term GDP growth, CEEP invites the Commission to consider the differences in public budgets’ sizes across the EU and to promote their convergence rather than parallel shrinking. A fully developed Fiscal Union would need more aligned tax and expenditure ratios, and should also be mindful to the borderlines of competence sharing.

Ms Angelova finally emphasised that in view of the tight budgetary situation in most

Member States, CEEP supports the use of “innovative financial instruments” in the 2014-2020 EU budget period for financing public infrastructure and public services.

For further information, please contact:

Valeria RONZITTI, Director of CEEP - tel. +32 (0) 2 219 27 98

CEEP gathers enterprises and organisations from across Europe, both public and private, at national, regional and local level, which are public employers or providers of services of general interest. CEEP members employ a quarter of the EU workforce; CEEP is one of the three European Social Partners.