Brussels, 10/05/2004
As the EU Economic and Financial Affairs (ECOFIN) Council prepares to meet tomorrow, the European Trade Union Confederation (ETUC) has called on ministers to change their approach and prioritise growth as a means of cutting deficits.
On 11 May, the ECOFIN Council will discuss the draft Broad Economic Policy Guidelines (BEPGs), addressed mainly at the ever-growing number of EU Member States who are breaching the 3% public deficit limit in the Stability Pact.
The ETUC, on the other hand, is telling ECOFIN Ministers that what the European economy needs now is strong economic growth, to allow deficits to fall back, and not the other way around.
“After three years of slow growth and with no convincing recovery in the pipeline, ECOFIN Ministers cannot go on as if it's business as usual,” says ETUC General Secretary John Monks. “They have to change gear and open up the way for macro-economic policies that support aggregate demand and thereby bring a return to strong growth.”
In a report describing the macro-economic policies that Europe has been pursuing and the disappointing results delivered so far, the ETUC calls upon ECOFIN Ministers to change the Broad Economic Policy Guidelines by:·
- Strengthening the Growth Initiative agreed on at the December Council, by extending it to investments in renewable energy and social housing
- Ending the present deadlock surrounding the Stability Pact, which is undermining confidence and increasing uncertainty. A sensible reform of the Stability Pact needs to be carried out, making sure the Pact and its fiscal consolidation rules are flexible in times of low growth and ‘bite', instead, during strong economic periods. ·
- Clearly stating that central banks in Europe should pursue not only price stability but also economic growth at as high a rate as possible.