Socialists & Democrats in the European Parliament today called on the European Commission to be more courageous in using the flexibility of the Stability & Growth Pact when proposing economic priorities for the coming year. More investment is needed to strengthen Europe's recovery, to improve security and to manage refugee inflows successfully. When assessing the eurozone's overall budgetary position for 2016, the Commission should be much more sensitive to these challenges, which are decisive for Europe's ability to deliver security and prosperity to its citizens.
The S&D comments respond to the Commission's opinions on the Draft Budgetary Plans of 15 eurozone member states for 2016 and to the Commission's overall assessment of these plans. The Commission considers that the eurozone's fiscal stance for 2016 will continue to be "broadly neutral (neither tightening nor loosening of public spending or taxation)" and that this is "broadly appropriate" in view of the "long-term sustainability of public finances, need to ensure a move away from external to domestic sources of growth, historically low interest rates and high external surplus of the euro area".
S&D Group vice-president for economic and social affairs, Maria João Rodrigues, said:
"The way to bring Europe's economy to a more solid ground is through more public investment and stronger domestic demand. The world economy is slowing down, the eurozone is running a big surplus, exporting capital rather than investing it at home, interest rates are extremely low and at the same time we face unprecedented security problems and a humanitarian challenge. The logical solution is to invest – here and now, in the energy transition, in education, in security and in the reception and integration of migrants. We cannot forever rely on low oil prices and high exports driven by a weak euro if we want a sustainable economic recovery.
"This week, the Commission was mainly assessing if member states comply with budgetary rules, and found improvements, which is welcome. However, when the Commission presents the Annual Growth Survey and the draft euro area recommendation next week, we expect a much stronger vision for the eurozone as a whole and greater encouragement of necessary public investment. This will pay off economically, socially - and the eurozone will also reduce its debts faster if it grows faster. The eurozone has a big investment gap and we cannot afford not to invest now. The flexibility of the Stability and Growth Pact must be used to its fullest extent."
