# C_2017207EN.01000101.xml

| 30.6.2017 | EN | Official Journal of the European Union | C 207/1 |
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30.6.2017

EN

Official Journal of the European Union

C 207/1

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Resolution of the European Committee of the Regions — The European Commission’s Annual Growth Survey 2017

(2017/C 207/01)

| Submitted by the PES, EPP, ALDE, EA and ECR political groups |
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Submitted by the PES, EPP, ALDE, EA and ECR political groups

Submitted by the PES, EPP, ALDE, EA and ECR political groups

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR),

| — | having regard to the European Commission’s Communication on the Annual Growth Survey 2017 (1) and to the start of the 2017 European Semester; |
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having regard to the European Commission’s Communication on the Annual Growth Survey 2017 (1) and to the start of the 2017 European Semester;

1

| — | having regard to the European Parliament’s resolution of 26 October 2016 on the European Semester for economic policy coordination: implementation of 2016 priorities (2); |
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having regard to the European Parliament’s resolution of 26 October 2016 on the European Semester for economic policy coordination: implementation of 2016 priorities (2);

2

| 1. | welcomes the Annual Growth Survey’s (AGS) focus on investment, structural reform and responsible public finances but would have expected a stronger focus on the implementation of the Sustainable Development Goals as one of the pillars of a European economic, social and environmental strategy after 2020; |
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1.

welcomes the Annual Growth Survey’s (AGS) focus on investment, structural reform and responsible public finances but would have expected a stronger focus on the implementation of the Sustainable Development Goals as one of the pillars of a European economic, social and environmental strategy after 2020;

| 2. | notes that several indicators — GDP, investment, job creation, employment and activity rates — signal that the recovery of the EU economy is ongoing despite increasing uncertainty worldwide; shares however the Commission’s view that there is no scope for complacency, since unemployment rates are still too high in many regions of Europe and several cumulative years of under-investment (the ‘investment gap’) weigh heavily on Europe’s competitiveness and cohesion; |
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2.

notes that several indicators — GDP, investment, job creation, employment and activity rates — signal that the recovery of the EU economy is ongoing despite increasing uncertainty worldwide; shares however the Commission’s view that there is no scope for complacency, since unemployment rates are still too high in many regions of Europe and several cumulative years of under-investment (the ‘investment gap’) weigh heavily on Europe’s competitiveness and cohesion;

| 3. | is concerned that existing imbalances within the EU and the Euro area pose a major challenge for growth and cohesion and that convergence among and within Member States has stalled in many cases; stresses that disparities within Member States are a major source of economic and social disparities, which are further increasing in the EU, and regrets that they are not addressed in a structured manner in the AGS; |
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3.

is concerned that existing imbalances within the EU and the Euro area pose a major challenge for growth and cohesion and that convergence among and within Member States has stalled in many cases; stresses that disparities within Member States are a major source of economic and social disparities, which are further increasing in the EU, and regrets that they are not addressed in a structured manner in the AGS;

| 4. | underlines that a European pillar of social rights, which must respect the principles of subsidiarity and proportionality, could make a major contribution to the coordination and upward convergence of social standards and strengthen the democratic legitimacy of the EU; |
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4.

underlines that a European pillar of social rights, which must respect the principles of subsidiarity and proportionality, could make a major contribution to the coordination and upward convergence of social standards and strengthen the democratic legitimacy of the EU;

| 5. | calls on the Commission to put forward a proposal for a fiscal capacity for the Eurozone open to all Member States coupled with a budgetary impact analysis (3); |
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5.

calls on the Commission to put forward a proposal for a fiscal capacity for the Eurozone open to all Member States coupled with a budgetary impact analysis (3);

3

Relaunching investment

Relaunching investment

| 6. | welcomes the result of the first year of the EFSI in terms of the amount of investment it managed to activate; is concerned however by the uncertain results of the EFSI in respect of additionality, by the unbalanced geographic distribution of the projects it has funded and by the lack of detailed and transparent information surrounding it; notes that these concerns are shared by the European Court of Auditors (4) and the independent evaluation published by the Commission (5); stresses that projects should be eligible for EFSI support as of a project value of EUR 10 million so that local and regional authorities should make more use of the EFSI, including through investment platforms, and regrets that many of them still lack information on it; is convinced that addressing the problems of administrative capacity which often prevent the local and regional authorities from making use of the EFSI should be seen as a priority in the context of the European Semester; |
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6.

welcomes the result of the first year of the EFSI in terms of the amount of investment it managed to activate; is concerned however by the uncertain results of the EFSI in respect of additionality, by the unbalanced geographic distribution of the projects it has funded and by the lack of detailed and transparent information surrounding it; notes that these concerns are shared by the European Court of Auditors (4) and the independent evaluation published by the Commission (5); stresses that projects should be eligible for EFSI support as of a project value of EUR 10 million so that local and regional authorities should make more use of the EFSI, including through investment platforms, and regrets that many of them still lack information on it; is convinced that addressing the problems of administrative capacity which often prevent the local and regional authorities from making use of the EFSI should be seen as a priority in the context of the European Semester;

4

5

| 7. | welcomes the AGS reference to the existence of obstacles to investment at local and regional level; regrets however that the analysis of obstacles to investment launched in the 2016 European Semester, and to which the CoR has contributed by way of an analysis of such obstacles at territorial level (6), is not followed up in the 2017 AGS; considers it important that measures to deepen the single market are recognised as having an important role in improving the overall investment environment at EU level and removing obstacles to investment at national, regional and local level; |
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7.

welcomes the AGS reference to the existence of obstacles to investment at local and regional level; regrets however that the analysis of obstacles to investment launched in the 2016 European Semester, and to which the CoR has contributed by way of an analysis of such obstacles at territorial level (6), is not followed up in the 2017 AGS; considers it important that measures to deepen the single market are recognised as having an important role in improving the overall investment environment at EU level and removing obstacles to investment at national, regional and local level;

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| 8. | stresses the contribution given by the ESI Funds to investment, highlighting that 61 of the Country-specific Recommendations for 2016 are taken up in cohesion policy programmes at the country level; shares the view that the ESI Funds could be used in combination with the EFSI, while stressing that the ESI Funds are the EU’s main investment tool, and are aimed at increasing cohesion, as stated in the Treaties; |
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8.

stresses the contribution given by the ESI Funds to investment, highlighting that 61 of the Country-specific Recommendations for 2016 are taken up in cohesion policy programmes at the country level; shares the view that the ESI Funds could be used in combination with the EFSI, while stressing that the ESI Funds are the EU’s main investment tool, and are aimed at increasing cohesion, as stated in the Treaties;

| 9. | welcomes the AGS reference to the need for the benefits of globalisation to be distributed fairly and to, increase the legitimacy of trade policy; highlights also the weight of citizens’ concerns and the need for the European Union and the parliaments and governments of its Member States and regions to retain their room for manoeuvre and democratic discretion, thus also safeguarding the public’s democratic opportunity to exert influence; is of the opinion that the Commission should take a stronger stand, when negotiating and concluding trade agreements, for retaining European quality standards and national regulations and standards in areas such as environmental, animal, climate, data, health and consumer protection, in order to ensure that trade agreements can produce fair and transparent results; |
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9.

welcomes the AGS reference to the need for the benefits of globalisation to be distributed fairly and to, increase the legitimacy of trade policy; highlights also the weight of citizens’ concerns and the need for the European Union and the parliaments and governments of its Member States and regions to retain their room for manoeuvre and democratic discretion, thus also safeguarding the public’s democratic opportunity to exert influence; is of the opinion that the Commission should take a stronger stand, when negotiating and concluding trade agreements, for retaining European quality standards and national regulations and standards in areas such as environmental, animal, climate, data, health and consumer protection, in order to ensure that trade agreements can produce fair and transparent results;

| 10. | welcomes the AGS recognition of the role that clear guidance regarding the application of State aid rules on public funding of infrastructure plays in facilitating the financing of the real economy; stresses that a major part of this funding concerns services of general economic interest (SGEI) and calls on the Commission to widen the scope of SGEIs to take new challenges into account; |
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10.

welcomes the AGS recognition of the role that clear guidance regarding the application of State aid rules on public funding of infrastructure plays in facilitating the financing of the real economy; stresses that a major part of this funding concerns services of general economic interest (SGEI) and calls on the Commission to widen the scope of SGEIs to take new challenges into account;

Pursuing structural reform

Pursuing structural reform

| 11. | notes that structural reforms are key factors for enhanced competitiveness, which is ever more needed to promote sustainable and inclusive growth and jobs in a context of global trade and competition; |
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11.

notes that structural reforms are key factors for enhanced competitiveness, which is ever more needed to promote sustainable and inclusive growth and jobs in a context of global trade and competition;

| 12. | welcomes the recognition of the important role of public procurement in enhancing competitiveness and innovation and stresses that a large share of public procurement is carried out by local and regional authorities; stresses that efforts aimed at improving administrative capacity to deal with public procurement should be directed specifically towards local and regional authorities; |
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12.

welcomes the recognition of the important role of public procurement in enhancing competitiveness and innovation and stresses that a large share of public procurement is carried out by local and regional authorities; stresses that efforts aimed at improving administrative capacity to deal with public procurement should be directed specifically towards local and regional authorities;

| 13. | stresses that SMEs, start-ups and entrepreneurship should be supported by facilitating access to finance, providing incentives for R & D, reducing administrative burdens and keeping better regulation high on the agenda; stresses the need to ensure that SMEs in all sectors, including service providers, can take part in global value chains, inter alia, by supportive industrial and regulatory policy; |
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13.

stresses that SMEs, start-ups and entrepreneurship should be supported by facilitating access to finance, providing incentives for R & D, reducing administrative burdens and keeping better regulation high on the agenda; stresses the need to ensure that SMEs in all sectors, including service providers, can take part in global value chains, inter alia, by supportive industrial and regulatory policy;

| 14. | stresses that the lack of administrative capacity of the public administration at all levels, and in particular at local and regional level, is an obstacle to the implementation of structural reforms and that the Commission should issue a single strategic document coordinating all streams of EU-funded technical assistance for improving administrative efficiency, including the Structural Reform Support Programme; |
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14.

stresses that the lack of administrative capacity of the public administration at all levels, and in particular at local and regional level, is an obstacle to the implementation of structural reforms and that the Commission should issue a single strategic document coordinating all streams of EU-funded technical assistance for improving administrative efficiency, including the Structural Reform Support Programme;

| 15. | is pleased that the Annual Growth Survey refers to prioritising investment in human capital. In particular, underscores the importance of boasting the roll-out of the Youth Guarantee and tackling youth unemployment, as this is still high in many regions and local communities; |
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15.

is pleased that the Annual Growth Survey refers to prioritising investment in human capital. In particular, underscores the importance of boasting the roll-out of the Youth Guarantee and tackling youth unemployment, as this is still high in many regions and local communities;

Ensuring fiscal expansion and responsible public finance

Ensuring fiscal expansion and responsible public finance

| 16. | welcomes the debate about a positive fiscal stance for the Euro area as a whole which would necessarily need to be coupled with the implementation of structural reforms; |
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16.

welcomes the debate about a positive fiscal stance for the Euro area as a whole which would necessarily need to be coupled with the implementation of structural reforms;

| 17. | stresses that local and regional authorities are interested in the full use of the flexibility allowed by the Stability and Growth Pact; reiterates its request that investment made by local and regional authorities under the ESI Funds be excluded from the calculations of the deficit and debt ceilings in all EU countries; |
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17.

stresses that local and regional authorities are interested in the full use of the flexibility allowed by the Stability and Growth Pact; reiterates its request that investment made by local and regional authorities under the ESI Funds be excluded from the calculations of the deficit and debt ceilings in all EU countries;

| 18. | stresses the need to ensure sound public finances and the limitation of public debt at all levels of government; as part of this overall effort, stresses that the composition of public expenditure should be improved, in the light of the OECD principles for effective public investment across levels of government; is engaged in launching a monitoring exercise on the implementation of such rules; invites the Commission to take action to promote fiscal decentralization across the EU, which, according to available evidence, would help in improving the effectiveness of public spending; |
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18.

stresses the need to ensure sound public finances and the limitation of public debt at all levels of government; as part of this overall effort, stresses that the composition of public expenditure should be improved, in the light of the OECD principles for effective public investment across levels of government; is engaged in launching a monitoring exercise on the implementation of such rules; invites the Commission to take action to promote fiscal decentralization across the EU, which, according to available evidence, would help in improving the effectiveness of public spending;

Improving the governance of the European Semester

Improving the governance of the European Semester

| 19. | notes that more than half of the Country-specific recommendations concern structural reforms which can only be addressed in partnership with local and regional authorities; stresses therefore that the limited involvement of local and regional authorities is one of the reasons for the lack of effectiveness and ownership of economic policy coordination under the European Semester, as is shown by the modest levels of delivery on the structural reforms outlined in the Country-specific recommendations; |
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19.

notes that more than half of the Country-specific recommendations concern structural reforms which can only be addressed in partnership with local and regional authorities; stresses therefore that the limited involvement of local and regional authorities is one of the reasons for the lack of effectiveness and ownership of economic policy coordination under the European Semester, as is shown by the modest levels of delivery on the structural reforms outlined in the Country-specific recommendations;

| 20. | welcomes the fact that the European Semester Officers seconded by the Commission to the Member States are already cooperating with local and regional authorities in some Member States. This should be the standard approach in all Member States; |
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20.

welcomes the fact that the European Semester Officers seconded by the Commission to the Member States are already cooperating with local and regional authorities in some Member States. This should be the standard approach in all Member States;

| 21. | regrets that the role of local and regional authorities is not acknowledged in the AGS and that country specific recommendations don’t take into account the fact that many competences are exclusive to the regional level; stresses that it is preparing an opinion proposing a Code of Conduct on the involvement of local and regional authorities in the European Semester; welcomes the support for this proposal expressed by the European Parliament; requests that EU institutions debate the proposal as soon as it is published; |
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21.

regrets that the role of local and regional authorities is not acknowledged in the AGS and that country specific recommendations don’t take into account the fact that many competences are exclusive to the regional level; stresses that it is preparing an opinion proposing a Code of Conduct on the involvement of local and regional authorities in the European Semester; welcomes the support for this proposal expressed by the European Parliament; requests that EU institutions debate the proposal as soon as it is published;

| 22. | notes that several country-specific recommendations call for structural reforms whose implementation may take much longer than one year, so that measurement of implementation after one year may underestimate the progress achieved, which might be both misleading and discouraging for the national and sub-national levels of government involved; invites, therefore, the Commission and the Council to draft the country-specific recommendations in a way that allows fair and transparent measurement of progress in their implementation; |
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22.

notes that several country-specific recommendations call for structural reforms whose implementation may take much longer than one year, so that measurement of implementation after one year may underestimate the progress achieved, which might be both misleading and discouraging for the national and sub-national levels of government involved; invites, therefore, the Commission and the Council to draft the country-specific recommendations in a way that allows fair and transparent measurement of progress in their implementation;

| 23. | instructs the President to forward this resolution to the Commission, the European Parliament, the Maltese Presidency of the Council and the President of the European Council. |
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23.

instructs the President to forward this resolution to the Commission, the European Parliament, the Maltese Presidency of the Council and the President of the European Council.

Brussels, 8 February 2017.

The President of the European Committee of the Regions

Markku MARKKULA

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(1)  COM(2016) 725 final.

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(2)  http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+TA+P8-TA-2016-0416+0+DOC+PDF+V0//EN

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(3)  See CoR draft opinion on Fiscal capacity and automatic stabilisers in the Economic and Monetary Union, rapporteur: Carl Fredrik Graf (EPP/SV), ECON-VI-018, due for adoption at February 2017 CoR plenary session.

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Fiscal capacity and automatic stabilisers in the Economic and Monetary Union

(4)  ECA, ‘EFSI: an early proposal to extend and expand’, Opinion No 2/2016.

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(5)  https://ec.europa.eu/priorities/publications/independent-evaluation-investment-plan_en

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(6)  7th CoR Monitoring Report on Europe 2020 and the European Semester http://portal.cor.europa.eu/europe2020/pub/Documents/2016/7mp.pdf

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