Commission recommendations won’t deliver a strong and sustainable recovery

(19 May 2016) The European Commission still refuses to make a real change in its economic policy. Yesterday it published its country-specific recommendations, a key stage in the process of economic policy coordination – the European Semester. The overriding message remains one of public deficit and debt reduction rather than a clear and strong call for a boost to public investment and wages to kickstart the European economy and escape the current trend of anaemic growth.

EPSU general secretary Jan Willem Goudriaan commented: “President Juncker claimed that he would deliver on a jobs and growth agenda, but we are still waiting to see a real break with the past. For several years now, EPSU and the ETUC have been calling for a boost to public investment which astonishingly remains below pre-crisis levels. With the exception of repeat recommendations for the Netherlands and Germany and a call for a change of priorities in Ireland, there is nothing to recognise the urgent need for action in this area.”

The approach to public services is more mixed with some references to quality, affordability and access among the recommendations for administrative reform and more cost-effectiveness. However, the Commission appears to have shifted in its agnostic position on privatisation, with clear recommendations for both Cyprus and Italy that they push ahead with privatisation plans.

For the European Commission to recommend privatisation is a violation of the Treaty. It instructs the Commission to be neutral to ownership issues. To make matters worse there is not empirical evidence that private provision is more effective at delivering better services, improved pay and conditions or greater access.

There are several recommendations that fit with EPSU policy, not least the calls for more action to improve tax compliance and collection (Bulgaria, Italy, Latvia, Lithuania, Poland, Romania and Slovakia) and for increased access to affordable and high-quality childcare (Ireland, Slovakia, Spain and the UK).

Jan Willem Goudriaan said: “EPSU certainly welcomes these kinds of recommendations, but is concerned about delivery. To make a real difference on tax compliance and collection and childcare you need the resources and these will only come from public investment. The problem is that most of the countries receiving these recommendations are still facing restrictions on their public spending. The Commission still hasn’t got the message that public investment in these areas will boost public revenues and economic growth as well as increasing employment, particularly for women.”

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