New Fiscal Rules Face Criticism from CES as Reforms Called for to Strengthen Economic and Social Resilience in Europe
The Economic and Social Council (CES) has voiced concerns over the new European fiscal rules that were recently approved. The council believes that these rules do not adequately address the challenges faced by the previous system, as they remain complex, procyclical, and lack investment protection. To address these shortcomings, a report released by the CES proposes recommendations such as achieving the Banking Union, deepening financial integration with the Capital Market Union, defining an industrial policy, and issuing joint public debt (eurobonds) to strengthen Europe’s resources system.
The CES highlights the importance of creating a new recovery fund to support technological and green investments in Europe. The report also reflects on the new fiscal rules which aim to limit annual public deficits to 3% of GDP and keep public debt below 60%. The CES president, Antón Costas, emphasizes that Europe must decide whether to adopt a rigid or compassionate approach within these fiscal rules, especially in light of upcoming European Parliament elections.
The council advocates for reforming European mechanisms with budgetary capacity, reinforcing investment mechanisms at the European level, and complementing national fiscal policies to tackle current macroeconomic challenges. Additionally, it calls for balancing the new fiscal framework with monetary policy and completing the Banking Union to ensure financial stability and economic resilience in the EU.
Furthermore, deepening financial integration is crucial for advancing the Capital Market Union and mobilizing private capital for innovation and investments. A common industrial policy is necessary to enhance EU competitiveness globally while promoting economic activity while ensuring cohesion and territorial linkages. Lastly, addressing child poverty is essential to achieve economic and social returns in Europe.
In conclusion, according to CES report’s recommendations can help navigate through complexities of new fiscal rules – promote economic recovery – ensure sustainable growth in EU economically resilient while supporting investments effectively at an international level.
