(17 February 2015) "Growth is not taking off due to a lack of investment. The risk of deflation is persistent with the structural reform agenda pursued by employers, ECB and European Commission making matters worse" was the message of the trade union delegation of ETUC in the macro-economic dialogue at political level.
The ETUC General Secretary Bernadette Segol underlined what the ETUC expects of an Investment Programme and so-called Quantative Easing focused on the real economy.
This was supported by others in the trade union delegation who underlined that the focus on depressing wages via labour market reforms to seek more flexibility keeps the economy down by suppressing demand at a moment that economic recovery is fragile. Recent analysis confirms that the little economic growth there has been comes from domestic demand so the logical conclusion should be to increase wages and stimulate people's purchasing power and internal EU demand. This is furthermore important to prevent second round effects which would depress wages and hence demand even further as the ECB recently underlined.
We also made the point that it is important that the EU is firm on tax evasion and tax fraud but to do so needs resources and trained staff and not a cut in the number of tax inspectors. Recent research for EPSU brings the jobs lost at close to 57.000. EPSU General Secretary commented that governments are not serious in addressing tax avoidance and dealing with complex schemes if reducing resources. The Country Specific Recommendations should address this. He also underlined the importance of direct public investment in public services such as health, child and elderly care and the positive effects this has on the economy. Spending in health and social protection has a very high multiplier effect research has underlined. The Juncker plan should put focus on such investment.
Contributions were made by the Latvian minister for Finance Janis Reirs, currently President of the EcoFin Council who highlighted the priorities including the work on deepening the Economic and Monetary Union. A first analytical note was presented to the European Council on 12 February. The Latvian minister of Welfare Uldis Augulis highlighted the importance of social dialogue, addressing poverty and of fully involving the social partners in the European semester and the discussions on the country specific recommendations. The social dimension of the EMU will be on the agenda of the Employment Council in April. European Commission Vice-President and responsible for the coordination of the European Semester Dombrovskis argued that the conditions for economic growth are now in place with the ECB Quantative Easing programme, the Commission's Juncker investment plan, the recognition of structural reforms by Member States and the low oil prices.
A priority for the European Commission is to promote social dialogue and involvement of the European social partners in the European Semester. All of these speakers plus the representatives of the employer organisations BusinessEurope, small and medium sized enterprises and CEEP, as well as the speaker for the ECB underlined the need for structural reforms (meaning labour market flexibility...). And although all recognised that private investment is lagging behind, most believe that the guarantees offered by the Juncker Investment Plan will unlock private investment. Especially BusinessEurope pleaded for more corporate welfare by ensuring that private companies can benefit from the guarantees of the Juncker investment plan, that the rules should not be rigid and that there should not be political objectives.
Trade union representatives also expressed that the Commission and Eurogroup should respect the demands of the Greek people for a change of course and a new approach. The meeting took place in the frame of the economic Winter Forecast
of the European Commission and preceded a meeting of the Eurogroup.
The meeting took place on 16 February 2015 in Brussels.