Commenting on the European Commission’s proposal to extend the ‘escape clause’ from the Stability and Growth Pact, European Trade Union Confederation General Secretary Luca Visentini said:
“Member states need to use all the resources at their disposal to limit the economic and social fallout from the pandemic by extending support for workers and companies until a real recovery is underway. It will cost a lot less to save jobs and businesses now than to try to recreate them later.
“Today’s move towards a further suspension of the Commission’s budget deficit and debt rules would give member states the green light to continue investing in the recovery. It is the responsible thing to do and must be confirmed in May to mark another important shift in the EU’s fiscal policy away from austerity policies which prevent job creation and economic growth.
“But there should be no return to austerity in 2023. The Commission must use this time to fundamentally rethink its fiscal rules through consultation with trade unions, business and civil society rather than postponing this crucial debate until “the recovery takes hold” as they have suggested. The EU should continue to drive economic solidarity and growth in Europe and never again let its rules be a barrier to investment and job creation.”
“The EU needs not only to thoroughly reform the fiscal rules to encourage much-needed investment, it also needs the member states to approve the increase in EU own resources to allow the Commission to eventually repay the bonds issued to finance the recovery” said ETUC Confederal Secretary Liina Carr “and to remove any fear that using the recovery funds will result in a debt burden for member states.”
Notes:
The European Commission will make a final decision in May after its Spring Forecast on whether to extend the suspension of the deficit and debt rules until 2023.
The ETUC is part of the Rethink the Recovery coalition of trade unions, NGO and academics which is pushing for a permanent change in the EU’s fiscal policy.
The European Commission’s announcement comes only two weeks after the Rethink the Recovery coalition wrote to EU leaders calling for a fresh start in fiscal policy making: https://www.etuc.org/en/pressrelease/eu-must-end-austerity-policies-paused-during-pandemic
