Saturday

17th Aug 2019

Brussels to unveil economic plan for next decade

  • R&D spending in Europe in below 2% compared to 2.6% in the US and 3.4% in Japan (Photo: gilderic)

After a decade of the EU's failed efforts to become the world's most dynamic knowledge-based economy, Brussels is laying down a fresh economic vision based on innovation, education and digital technologies. However, it stops short of introducing sanctions to ensure national capitals this time stick to the plan.

On Wednesday (3 March), the European Commission is set to adopt a 10-year economic strategy, dubbed Europe 2020, that warns of a "lost decade" should the 27-nation bloc continue "at a slow and largely uncoordinated pace of reforms."

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The draft document, seen by EUobserver, argues in favour of "smart, green and inclusive growth" - an objective mirrored in five "measurable" targets that should be later translated into national obligations.

The EU should increase its employment rate from the current 69 percent to at least 75 percent by the end of the next decade; should boost its investment in R&D and innovation to some 4 percent of GDP; and stick to its green goals of lower CO2 emissions, more renewables and higher energy efficiency.

In addition, at least 40 percent of Europeans aged 30-34 should obtain a university degree - currently, only 31 percent do so, while some 28 million people (or a quarter of Europeans) should be lifted out of poverty by 2020.

The old continent lags behind the US and Japan when it comes to research spending, education achievements or the development of information and communication technologies. The EU's executive body is, therefore, set to keep an eye on how national governments stick to new tasks.

"The monitoring of progress towards these targets should become an integral part of our economic governance," the paper says.

No sticks, no carrots

The idea of sanctions or incentives - floated by the Spanish EU presidency and opposed by Germany - has not made it into the commission's package, however.

Instead, Brussels is opting for "country reporting" based on "reform programmes" that EU capitals will need to submit for evaluation together with their stability or convergence programmes, which examine country's macroeconomic and fiscal stance.

If a member state fails to "adequately respond to a policy recommendation ... or develops policies going against the advice, the commission could issue a policy warning," says the document. EU institutions now enjoy a stronger say in the area of economy.

What about the money?

But the EU executive is likely to ruffle feathers in some capitals when it comes to discussing financial resources for Europe 2020, particularly the idea that future priorities should be mirrored in the bloc's post-2013 financial multi-annual budget.

"We have insisted that the debate about the 2020 economic strategy cannot be the debate about the European Union's budget," Slovak Prime Minister Robert Fico said at a February EU summit partially devoted to the topic.

According to diplomats, the view is shared by Hungary, Poland, the Czech Republic as well as the Baltic states.

The less developed countries do not see themselves as sufficiently able to absorb EU funds for R&D, innovation and low-carbon technology when compared to their western counterparts. Instead, they argue, the region still needs to put money into basic infustructure in order to boost attractiveness for investment.

"Member states must have the right to choose how they achieve the economic growth," Mr Fico argued, defending current financial tools such as the Cohesion Fund. "Such policies must be part of the 2020 strategy. If not, some countries would be significantly disadvantaged."

No 'one size fits all'

Poland's EU affairs minister, Mikolaj Dowgielewicz, echoed Mr Fico's concerns.

"The proposal does not sufficiently reflect the different development levels of regions and member states and therefore does not respect the underlying factor of economic cohesion in the enlarged EU. The 'one size fits all' approach should be eliminated," he told EUobserver in an interview.

The minister voiced special concern over plans to "green the economy" due to the vast differences in emissions levels between the old and new EU states.

"We should stick to the Cohesion Fund and structural funds, which have well-established and operational delivery mechanisms," he added. "Poland is against creating separate thematic funds to address new challenges."

Brussels, for its part, wants to discuss the different funds' real impact before it tables budgetary proposals next year. In addition, it hopes to design new financial instruments with the participation of the European Investment Bank and the private sector.

The final decision on the new EU strategy is to be taken by the 27 EU leaders on 25 March. Under the bloc's new, post-Lisbon Treaty set-up, member states will have no chance to formally debate the proposals ahead of the summit in sectoral councils of energy or finance ministers, giving the commission extra power to force its ideas through.

Exclusive

Brexit row delays financial products transparency review

A European financial regulatory body set up after the financial crisis is at loggerheads with the European Commission over whether to carry out a transparency review of certain financial products. The reason: Brexit.

Commission defends Mercosur trade deal

EU commissioners defended a far-reaching free trade agreement between the EU and four Latin American countries, against critics who fear it will damage European farmers' livelihoods and the global environment.

EU hesitates to back France over US tariff threat

France has passed a new tax on tech companies that will affect US global giants like Facebook. Donald Trump has threatened retaliatory tariffs over it. The EU commission says it will "coordinate closely with French" on the next steps.

EU banks more vulnerable to shocks than feared

Eurozone banks, such as Deutsche Bank, might be much more vulnerable to a repeat of the 2008 financial crisis than EU "stress-tests" have said, according to a new audit.

News in Brief

  1. Trump turned down: Greenland not for sale
  2. UK Libdems would back Clarke or Harman as new PM
  3. Six countries agree to take 'Open Arms' ship migrants
  4. Gibraltar judge: Iranian ship should be released
  5. Increasing fears of a global recession
  6. Far-right hate crimes on the rise in Germany
  7. EU steel tariffs have 'worked well' so far
  8. Italian court: Migrant rescue ship can enter Italian waters

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. Selmayr did not keep formal records of lobby meetings
  2. EU asked to solve migrant rescue deadlock
  3. Internal EU paper: Second Brexit vote was no longer 'distant dream'
  4. EU has 'zero incentive' to break open 'trilogue' deals
  5. Denmark plans import ban on EU-approved pesticide
  6. US offers Johnson helping hand on Brexit
  7. Italy: New government without Salvini in the making
  8. Brexit row delays financial products transparency review

Stakeholders' Highlights

  1. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  2. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  3. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  4. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  5. Nordic Council of MinistersNordic commitment to driving global gender equality
  6. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  7. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  8. Nordic Council of MinistersNordic talks on parental leave at the UN
  9. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  10. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  11. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  12. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership

Join EUobserver

Support quality EU news

Join us