Thursday

29th Feb 2024

Brussels sets out new economic strategy for EU

  • The financial crisis has wiped out many of Europe's gains over the last decade, said Barroso (Photo: European Commission)

The European Commission set out its long-awaited proposals for a new European economic strategy on Wednesday (3 March), saying the current financial turmoil highlighted the need for stronger economic co-ordination within the bloc.

The crisis has "exposed fundamental weaknesses and unsustainable trends that we cannot ignore any longer," said commission President Jose Manuel Barroso. "The bottom line is that Europe has a growth deficit which is putting our future at risk."

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With the EU's former strategy - the "Lisbon Agenda" - widely derided for its weak implementation mechanisms and excessive list of targets, the commission has put its faith this time in the greater powers handed to it by the Lisbon Treaty, and a stripped-down list of objectives.

The Europe 2020 communication lists five EU goals, to be subsequently broken down into national targets, which the EU executive body hopes EU leaders will agree to at a summit later this month.

By the year 2020, the commission wants to see 75 percent of the population aged 20-64 in employment, three percent of the EU's GDP invested in research and development, and the successful implementation of the bloc's environmental goals, including a 20 percent reduction in CO2 emissions.

In addition the document says 40 percent of the younger generation should obtain a degree or a diploma, and 20 million less people should be at risk of poverty.

"We warmly welcome the target on poverty reduction," Conny Reuter, president of Social Platform, which represents social NGOs, told EUobserver. "The questions is whether the member states will accept the target."

Enforcement

Analysts also agree that member states' political will and the commission's ability to ensure implementation will be vital to the strategy's success.

The commission has proposed that national capitals report back on their progress in achieving the strategy's targets in the last quarter of each year, at the same time as national capitals submit their Stability and Convergence reports dealing with fiscal issues.

The suggestion has already met resistance, however. In a letter to Mr Barroso earlier this week, German Chancellor Angela Merkel objected to suggestions that the new economic goals should be closely linked to supervision of the Stability and Growth Pact.

Ms Merkel wrote that she had not agreed to this connection and believed it would "unnecessarily politicise" budget supervision, reported the Financial Times Deutschland.

Lisbon Treaty rules, enabling the commission to provide "policy warnings," have also proven controversial in a number of member states.

Andre Sapir, a senior fellow at the Brussels-based Bruegel think tank, told this website that, while he supported warnings for macro-economic threats to the EU economy as a whole, he was not in favour of them being used at the micro-economic level.

"Spain currently has high unemployment. Are you really going to issue a warning to that country to change its labour laws?" he said. "The commission would have to issue warnings all the time, and they would therefore have much less value."

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