Universidad Carlos III de Madrid - UC3M

Home page > Asignaturas / Teaching > Economics of European Integration > Readings on Economics of European Integration > Euro-Area Debt Crisis: Debate readings > IMPLEMENTATION OF THE COMPACT FOR GROWTH AND JOBS



Tuesday 23 October 2012, by Carlos San Juan

The Compact for Growth and Jobs agreed by Heads of State or Government at the European Council in June is an integral part of the European Union’s response to the economic and financial crisis. It complements and reinforces the ongoing efforts to restore financial stability and deepen the Economic and Monetary Union. Determined action today to create growth and jobs and to re-energise Europe’s economy will pay dividends for decades to come. The Commission has tabled a wide range of growth-enhancing proposals which form part of the Compact for Growth and Jobs and is working hand-in-hand with the European Parliament and the Council to secure their rapid adoption and implementation so that the beneficial results can be felt in the economy as soon as possible. Encouraging progress has been made on some aspects of the Compact for Growth and Jobs since June, for example the increase in the capital of the EIB is underway and progress is being made on pilot project bonds. However, results in other areas have been disappointing and the strong political commitment of the Heads of State or Government and the European Parliament has not yet fed through to an intensification of work that would deliver rapid results on the ground. This report and the accompanying annex take stock of progress and highlight where efforts should be redoubled in order to actively promote growth opportunities. Boosting the implementation of the Europe 2020 Strategy: There is broad agreement on the priorities for reforming and modernising the European economy. The adoption by the Council of the 2012 Country Specific Recommendations must now be followed by resolute action at national level to put the recommendations into practice. The new system of European economic governance is proving its worth but is not complete: agreement on the ’2-pack’ legislation to strengthen further budgetary coordination in the euro area remains a top priority. Progress on the Commission’s banking union proposals and the longer term work on economic and monetary union will help to restore confidence to the economy and create the right conditions for growth. Deepening the Single Market: The huge potential of the single market as an engine of growth is not yet fully harnessed. Progress on the key actions of the first Single Market Act has been uneven. The recent adoption of the standardisation legislation is a welcome step. The co- legislators should aim to adopt key proposals on the unitary patent, venture capital, social investment funds, accounting and alternative dispute resolution before the end of the year and to accelerate work on other key actions – such as public procurement, professional qualifications, posting of workers, energy taxation and e-Signatures – where progress has so far fallen short of expectations. The Commission has just proposed a further set of new growth-enhancing actions in a second Single Market Act. The Commission has 2 also accelerated its work on the implementation of the services directive, on eliminating the remaining illegal restrictions on company structures or capital and on facilitating access to regulated professions and calls on Member States to engage fully in this work. Connecting Europe: We have agreed ambitious but achievable deadlines for the completion of the Digital Single Market and the Internal Energy Market. The decisions and actions we take now will determine whether we can deliver. The Commission will shortly set out an Action Plan detailing what needs to be done by each Member State to complete the Internal Energy Market. This plan will build on the Energy Efficiency Directives which were recently adopted. Similarly, the mid-term review of the Digital Agenda, to be published before the end of the year, will highlight where barriers remain and where action must be taken. An acceleration of the work on the Commission proposal on collective rights management and upcoming initiatives on copyright and audiovisual services will also make a major contribution. An ambitious agreement on the Connecting Europe Facility will be a clear statement of intent to make the necessary investments in energy, digital and transport infrastructure. Creating the right regulatory framework for growth: The Commission will report later in 2012 on the considerable progress that has been made on Smart Regulation and will set out to further reduce regulatory burden at the EU and national levels. In early 2013, the Commission will present a first progress report and scoreboard on the ongoing actions to adapt EU regulation to the needs of SMEs and micro-enterprises. Building an innovation union: Innovation holds the key to future growth and competitiveness. The Commission has set out how the European Research Area can be strengthened and has presented an ambitious strategy on key enabling technologies. Agreement on the proposed Horizon 2020 and COSME programmes under the next MFF will provide researchers and SMEs with a much-needed boost. The actions set out in the Commission’s recent review of EU industrial policy will help the EU to maintain its technological lead and facilitate investment in the early stages of new technologies. Investing in growth: The €120 billion financing package enshrined in the Compact for Growth and Jobs has great potential to catalyse growth and further investment from the private sector. The increase in the capital of the European Investment Bank is now agreed: 90% will be available at the latest in March 2013. The 2013 EIB lending programme will reflect the increased lending capacity. The first EU project bonds will be launched in the coming months pending the signature of a Commission-EIB cooperation agreement at the end of October. The EIB board has already approved a pipeline of projects. The Commission continues to work with Member States to reprogramme and accelerate EU structural funds to support growth. However, the decisions to be taken this year on the 2013 Budget and the next Multiannual Financial Framework will be the acid test of the collective commitment to invest in growth and competitiveness. The Commission does not have sufficient payment credits available to pay the payment requests now being submitted by Member States. These are legal obligations which must be honoured and delays in making payments will not help restore growth and confidence in our economy. 3 Tax policy for growth: The Commission has made a series of proposals – for example on the revision of the Savings Tax Directive, a Common Consolidated Corporate Tax Base, energy taxation and negotiating mandates for savings tax agreement with third countries – which, when adopted, will help to boost government revenues and create opportunities to stimulate growth and aid fiscal consolidation. However, progress in Council and Parliament has so far been inadequate. The Commission calls for a renewed commitment to moving forward in this area, also through implementation of the action plan on tax fraud and tax evasion including an initiative on tax havens, to be adopted later this year. As soon as the minimum requirements for adoption of a financial transaction tax through enhanced co-operation are met, the Commission will table a proposal for an authorisation decision. Creating jobs and a genuine European labour market: Member States must continue to act to respond to the economic and social challenges of high unemployment and demographic change. The framework for progress is in place – the key now is implementation. The Commission has launched an ambitious Employment Package setting out key measures to support job creation, to restore the dynamics of the labour market and to enhance EU governance, and advocates an acceleration of work on the portability of pension rights. At European level, the reform of EURES to become a genuine recruitment and placement platform is under way and the Commission will shortly propose a Communication on Rethinking Education and a Youth Employment Package building on the Youth Opportunities Initiative and including proposals for a Youth Guarantee. Work on the Commission’s proposal on posted workers rights should be accelerated. Harnessing the potential of trade: Progress is being made in trade negotiations with a number of international partners. Agreements with Peru and Colombia have been signed and the finalisation of agreements with Singapore and Canada by the end of the year is within reach. The Commission has proposed negotiating directives on Japan and negotiations continue with India, where new impetus is needed. Work on the Commission’s proposals on access to third country public procurement markets should also be accelerated.

(Full report downlable below)

Attached documents

  • Document (PDF - 690.4 kb)

Follow-up of the site's activity RSS 2.0 | Site Map | Private area | SPIP | Contacto: csm@eco.uc3m.es