No C 56/56 Official  Journal  of the European  Communities 7.3. 77 
Opinion  on the  fourth  medium-term  economic  policy  programme  of the  Community 
(1976  to 1980) 
The text  referred  to the Committee  has  not been  published  in the Official  Journal  of the 
European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 12 October  1976,  the  Council  referred  the  abovementioned  programme  to the 
Economic  and  Social  Committee  in accordance  with  Article  198  of the  Treaty 
establishing  the European  Economic  Community. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the  above  matter  at its 
143rd  plenary  session,  held  in Brussels  on 24 and  25 November  1976. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Article  198  thereof, 
Having  regard  to Council  Decision  74/120/EEC  of 
18 February  1974  on the attainment  of a high  degree 
of convergence  of the  economic  policies  of the 
Member  States  of the  European  Community  {*), and 
in particular  Article  6 thereof, 
Having  regard  to the request  made  by the Council  of 
the European  Communities  on 12 October  1976  for 
an opinion  on the said  draft  programme, 
Having  regard  to the  decision  taken  by its Bureau 
on 26 October  1976,  instructing  the  Section  for 
Economic  and  Financial  Questions  to draw  up an 
opinion  and  a report  on the matter, 
Having  regard  to  the  report  prepared  by  the 
rapporteur,  Mr  Friedrichs,  and  the  opinion  adopted 
by the Section  at its meeting  on 12 November  1976, 
Having  regard  to the discussions  at its 143rd  plenary 
session  held  on 24 and  25 November  1976  (meeting 
of 25 November  1976), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 39 votes  to 26, with  3 abstentions: 
(i) OJ  No L 63, 5. 3. 1974. 1. Introductory  comments 
1.1. The  Community's  fourth  medium-term  econ-
omic  policy  programme  for the period  1976  to 1980 
was published  in draft  form  on 8 October  1976.  The 
Committee  was  given  the chance  at an earlier  stage  to 
take a look  at some  of the  preliminary  work 
conducted  on  this  programme,  and  during  the 
preparation  of its opinion  it was  able  to refer  to a 
preliminary  draft  of the  Economic  Policy  Committee 
published  on 29 June  1976.  This  enabled  a thorough 
exchange  of views  to be held  among  its members, 
and the  Committee  is very  much  in favour  of having 
such  advance  information.  Since  the final  text  of the 
draft,  which  has  been  summarized  and  explained  in 
part in a newly  added  foreword,  was  very  late  in 
being  published,  the  Committee's  opinion  had  to be 
confined  to the  draft's  broad  lines  and  was  not  able 
to make  a close  examination  of all questions  one  by 
one. The  Committee  regrets  that,  even  though  it 
received  advance  information,  it had  too  little  time 
to study  the draft  as thoroughly  as it no doubt  should 
have  been. 
1.2. The  draft  is divided  into  a foreword,  an 
introduction  and  three  main  parts  dealing  with:  (a) 
the background;  ('b)  medium-term  problems  and 
general  economic  policy  guidelines;  (c) the implemen-
tation  of the  guidelines.  Because  of this  structure, 
numerous  issues  are  repeatedly  approached  from 
different  angles.  The  Committee  attempted  to follow 
this structure  in its opinion.  However,  so as not  to 
make  the  opinion  repetitive,  it has  run  together  a 
number  of points. 
7.3.77 Official  Journal  of the European  Communities No C 56/57 
1.3. The  Committee  considers  that  the medium-term 
economic  policy  programme  cannot  be merely  a 
report  on what  could  be done  in the  EEC,  or a 
literary  exercise.  Instead,  it must: 
— inspire  the various  policies  of the EEC  (industrial, 
competition,  environment,  energy,  research, 
consumer  protection,  etc.), 
— try and  act  effectively  to improve  economic 
structures  (which,  by definition,  ought  to be the 
role of a medium-term  economic  policy), 
— be a guide  for  determined  action  taken  by the 
Community  executive  in accordance  with  the 
political  role  conferred  on it iby the  Treaty  of 
Rome, 
— be worked  out  after  wide-ranging  consultation  of 
social  and  occupational  interests. 
The Committee  therefore  calls  upon  the Commission 
to work  towards  this  objective. 
2. Comments  on the  foreword 
2.1. The  Committee  notes  that  the foreword  is not 
merely  an introductory  summary  of the Commission 
draft.  It was  added  after  the draft  had been  completed 
and goes  beyond  that  document  in style  and  tone. 
Thus,  while  reflecting  the draft's  general  tenor  it also 
gives  on important  points  a clarification  of the 
problems  and  the  Commission's  intentions.  The 
Committee  can therefore  refer  to its comments  on the 
introduction  and  the main  parts  of the document  and 
be brief  here. 
2.2. The  foreword  refers  to the  Tripartite  Confer-
ence  held  on 24 June  1976.  The  Committee  considers 
this conference  to ibe a welcome  attempt,  above  and 
beyond  the  ESC's  permanent  activities,  to promote 
a social  consensus  at Community  level  through  direct 
consultations  with  the two  sides  of industry. 
2.3. The  Committee  supports  the  Commission  in 
considering  that  the medium-term  goals  for employ-
ment,  economic  growth  and  price  stability  should  be 
more  ambitious  than  those  set in the  document.  It 
would  indeed  be desirable  to take  the Commission's 
figures  as minimum  requirements  and  — the  Com-
mittee  would  add  — actually  exceed  them.  Attention 
must,  however,  be drawn  to the relatively  unfavour-
able base  situation.  The  joint  efforts  of all parties will therefore  be needed  to achieve  and,  where 
possible,  exceed  these  objectives. 
2.4. A special  difficulty  impeding  a rapid  return  to 
strong  economic  growth  and  full  employment  lies  in 
the need  for a simultaneous  reduction  in the rates  at 
which  prices  are increasing.  As it has  done  at other 
points  in the  opinion,  the  Committee  would  stress 
how important  it is in this  connection  to create  a 
social  consensus.  It would,  however,  also  underline 
the need  for  the  whole  complex  of economic, 
financial,  monetary  and  credit  policies  to be geared 
to stability.  The  Committee  therefore  welcomes  the 
Commission's  intention  to annually  propose  quanti-
tative  objectives  for monetary  policy  to the  Council 
and check  that  they  are being  observed  (point  12). 
3. Comments  on the introduction 
3.1. The  Community's  fourth  medium-term  econ-
omic  policy  programme  for the period  1976  to 1980 
was drawn  up in circumstances  fundamentally  differ-
ent from  those  obtaining  when  the  previous  pro-
grammes  were  produced.  It is now  more  difficult 
than ever  before  to devise  and  implement  such  a 
programme  given  the background  of the world  econ-
omic  crisis  of 1974  and  1975,  the  still  unsolved 
problems  of inflation  and  unemployment,  the radical 
change  in international  economic  relations  (of which 
the rise  in oil prices  is but one  manifestation)  and  the 
clear  divergences  in economic  policy  and  economic 
development  among  the Member  States. 
3.2. The  Commission  draws  two  conclusions  from 
this situation.  It emphasizes  the  importance  of a 
Community  medium-term  programme  and  points  out 
that it will  be necessary  to review  the  macro-econ-
omic  guidelines  regularly  and  if necessary  adapt  them 
to new  developments  (points  15 and  17). 
3.3. The  Committee  is aware  of the  need  — es-
pecially  in the  present  situation  —  to draw  up 
guidelines  for  a common  economic  policy  for  the 
period  1976  to 1980.  It also  realizes  that  a certain 
degree  of flexibility  is essential  on  account  of 
uncertainty  about  the  future  economic  trend.  A 
regular  review  of the  quantitative  aspects  of the 
guidelines  should,  on practical  grounds,  be carried 
out in the  second  quarter  in conjunction  with  the 
discussion  of the  (broad  lines  of the national  budget 
estimates.  The  Committee  notes  the  Commission's 
No C 56/58 Official  Journal  of the European  Communities 7. 3. 77 
statement  that  the  objectives  will  not  be radically 
changed  unless  extraordinary  circumstances  arise.  It 
asks that  in such  cases  the  Economic  and  Social 
Committee  and  the  relevant  sectors  of society  be 
consulted  again. 
COMMENTS  ON  THE  MAIN  PARTS 
4. Part  I — the background 
4.1. The  Committee  stresses  that  the economic  crisis 
of 1974  and  1975  cannot  be attributed  to any  one 
single  cause.  A whole  series  of domestic  and  external 
factors  led to the  recession  and  shaped  its develop-
ment.  Despite  the  disparate  social,  economic  and 
political  structures  within  the Community,  the Mem-
ber States  have  all adopted  the same  type  of approach 
to the recession. 
This  approach  is centred  on  a determination  to 
comibat  inflation  by curbing  wage  rises  and  public 
expenditure.  Experience  shows  that  this  policy  does 
not provide  a satisfactory  solution  to the employment 
crisis. 
4.2. The  Committee  considers  it vital  to realize  that 
inflation  has not provided  a way  out of the recession 
— on  the  contrary,  inflation  has  aggravated  the 
recession  and  may  even  be its cause.  The  Committee 
stresses  the  importance  of structural  factors  (point 
21), which,  as the  Commission  document  riglhtly 
states  in point  22,  mean  that  inflation  cannot  be 
tackled  merely  by traditional  demand-management. 
Therefore,  if a lasting  success  is to be achieved  in the 
fight  against  inflation,  a monetary  and  credit  policy 
aimed  at stability  will  have  to be combined  with 
structural  measures  to reduce  social  tensions  and  to 
increase  flexibility.  Another  point  to be borne  in 
mind  is that  floating  exchange  rates  are no substitute 
for a domestic  economic  policy  which  takes  due 
account  of the need  for stability  (point  25). 
4.3. The  Committee  considers  that  the  description 
of the  Community's  weaknesses  given  in Part  I B is 
necessary,  but somewhat  over-optimistic. 
4.4. The  Committee  has  frequently  pointed  out  that 
political  will  is the  first,  basic  prerequisite  for  any 
common  policy.  The  recession  has  revealed  the 
existence  of considerable  divergences  in economic policy  within  the Community.  These  divergences  were 
doubtless  present  in the  phase  of general  growth 
which  preceded  the  recession,  but  they  were  not  so 
obvious.  It is clear  that  different  social  and  political 
structures  underlie  the  differences  between  the 
priorities  and  approaches  adopted  iby the individual 
governments.  Certainly,  every  effort  must  be made 
to act in concert  in vital  matters.  This  appeal  to the 
political  will  of the  governments  and  the  nations  at 
large  is all the  more  urgent  since  the  Community 
still has no parliamentary  system  of decision-making. 
Similarly,  joint  action  can  only  come  about  after 
consultations  with  representatives  of economic  and 
social  interest  groups. 
The Committee  would  refer  in this  connection  to 
the Committee's  Opinion  on the  Situation  of rhe 
Community  (*). 
5. Part  II — medium-term  problems  and  general 
economic  policy  guidelines 
5.1. The  Committee  would  draw  attention  to the 
uncertainties  which  still  make  it difficult  to assess 
the base  situation  for  medium-term  policy  in the 
Community.  It is true  that  the  world  economy  is 
appreciably  healthier  than  in 1975,  but  in recent 
months  the  recovery  has  flagged  somewhat.  Several 
months  will  probably  elapse  before  we know  how 
the situation  is going  to develop. 
5.2. At best,  however,  the  economic  upturn  will 
only alleviate  the  problems  facing  the Community. 
It will  not  be  able  to solve  them.  Insufficient 
investment  coupled  with  under-utilization  of 
productive  capacity  and  high  unemployment  in 
recent  years,  plus  the  fact  that  the  recovery  is 
starting  from  a relatively  high  'level  Of inflation,  make 
it difficult  if not  impossible  to recoup  rapidly  the 
growth  lost  during  the recession. 
The Committee  therefore  agrees  with  the Commission 
document  that  'the  major  economic  policy  problem 
during  the coming  years  will  be the achievement  of 
a lasting  return  to full  employment'. 
5.3. The  Committee  considers  that  in the  longer 
term  the  declining  birth  rate  is likely  to play  an 
important  part  in retarding  growth. 
(!) OJ  No C 125,  16. 10. 1974. 
7. 3. 77 Official  Journal  of the European  Communities No C 56/59 
The consequences  as  regards  Member  States' 
medium-term  policies  should  be taken  into  account. 
5.4. To  restore  full  employment  it will  be necessary 
to introduce  a mix  of general  and  structural  measures 
aimed  at promoting  investment  and  growth,  and 
eliminating  regional  and  sectoral  imbalances  in the 
labour  market.  The  Committee  would  refer  to its 
comments  below,  which  relate  particularly  to the 
implementation  of the  guidelines.  It would,  however, 
stress  here  and  now  how  important  it is to curb 
inflation  in the interest  of full  employment. 
5.5. As  regards  the quantitative  guidelines,  the Com-
mittee  finds  itself  unaible  to comment  on the  figures 
for the  individual  Memlber  States,  ,since  it does  not 
have  the necessary  yardsticks.  The  Committee  agrees 
with  the  Commission  that,  bearing  in mind  the 
circumstances,  the figure  of 4 5 to 5%  for  the annual 
average  growth  of GDP  in volume  terms  (point  73) 
is to be regarded  as a minimum  target  even  though 
a major  effort  will  doubtless  be needed  to achieve 
it. It must  be pointed  out  that  the  projected  growth 
rate is not  sufficient  to make  up fully  for the loss  of 
growth  in the  recession  years.  The  projected  trend 
also means  that  the  rate  of unemployment  in the 
Community  will  not  fall  below  3%  of the  working 
population  until  1980.  The  Committee  is unable  to 
consider  these  projections  as being  satisfactory,  though 
it is aware  that  they  reflect  the deep  impact  of the 
recession.  It will  be,  therefore,  particularly  essential 
for the  programme  to give  more  details  alb out the 
'structural'  measures  to be used  to bring  about  full 
employment. 
5.6. The  Committee  regrets  that  a more  ambitious 
target  would  not  be realistic  on account  of the major 
economic  and  social  differences  between  the Member 
States.  This  situation  is,  the  Committee  thinks, 
indicative  of the  difficulties  facing  a common  policy 
in the present  circumstances. 
6. Part  III — the  implementation  of the  guidelines 
6.1. Policy  adjustment  to short-term  economic 
conditions 
6.1.1.  The  Committee  is no longer  so sure  that  it is 
correct  to assume  that  the  Community's  actual 
growth  in 1977  and  1978  will  substantially  exceed 
the growth  rate  that  can  be achieved  in the  medium 
term  (point  91).  In this  connection,  the  Committee 
draws  attention  to its comments  under  5.1 about  the uncertainties  bedevilling  an assessment  of the  base 
situation  for  medium-term  economic  /policy.  At the 
moment  over-heating  seems  to be 'less  likely  than 
an excessive  weakening  of the upswing. 
6.1.2.  The  Committee  endorses  the  stabilization  of 
cyclical  fluctuations,  which  lis sett as a goal  in the 
draift  programme.  Economic  policy  must  be aimed 
at preventing  both  over-heating  and  dramatic  sags  in 
economic  activity,  and  at pursuing  a pattern  of steady 
growth.  Such  a policy  'Would  help  to alleviate  fhe 
tensions  that  lead  to inflation  ,and  unemployment. 
But the Commission  seems  to ibe saying  that  a return 
to stability  and  growth  will  depend  on tan improved 
distribution  of real  incomes  in the future. 
The Committee  is surprised  at the  limit  the  Com-
mission  imposes  on itself,  a limit  that  contradicts 
the structural  diagnosis  it itself  gives  in  the 
introduction.  A coherent  set  of measures  (fiscal, 
budgetary,  regional  policy,  industrial  policy,  price 
and competition  policy,  social  policy)  would  have 
helped  more  to  make  the  Commission's  draft 
programme  homogeneous  and  credible. 
6.1.3.  The  Committee  would  point  out  the  need  to 
ensure  that  higher  company  earnings  are  in fact 
ploughed  back  in the  form  of higher  investments. 
Investment  should  not  be hampered  by a flight  of 
capital.  To enable  investments  to be influenced  land 
employment  targets  to be met,  the  Member  States 
and the  Community  bodies  should  draw  on  the 
experience  gained  with  systematic  prior  notification 
of investments,  as in the case  of the EGSC. 
6.1.4.  As  regards  wage  trends  it is important  that 
it be possible  to amend  collective  wage  agreements 
while  they  are in force.  This  would  allow  the parties 
to such  agreements  to demonstrate  a certain  amount 
of moderation  in their  negotiations,  without  having 
to worry  about  suffering  unjust  losses  during  the 
agreement's  period  of validity.  It must  be borne  in 
mind,  however,  that  firms  need  a reliable  basis  for 
their  forward  planning.  This  means  that  such 
adjustment  machinery  should  be used  primarily  for 
agreements  valid  for  more  than  one  year,  or when 
very special  circumstances  arise. 
6.1.5.  The  Committee  would  stress  that  this  and 
other  questions  concerning  the  shaping  and 
No C 56/60 Official  Journal  of the European  Communities 7.3.77 
implementation  off collective  pay  policies  must  be 
settled  by the two  sides  of industry  on their  own.  It 
is apposed  to any  regimentation  in this  'field.  It is 
for this  very  reason  that  the  'Committee  emphati-
cally  endorses  the  document's  basic  idea  that  a 
'social  consensus'  should  be fostered  by extending 
consultations  and,  on a general  level,  by improving 
information  about  medium-term  prospects,  too.  As 
regards  the  question  of worker  participation  in 
economic  decision-making  processes,  a question 
which  undoubtedly  forms  part  oif this  complex,  the 
Committee  wou'ld  refer  to the  opinion  which  the 
Committee  is currently  producing  on the  'Green 
Paper'. 
6.1.6.  Community  action  in the field  of trade  policy 
is of paramount  importance.  It is necessary  to work 
out a way  to improve  the  current  policy  and,  if 
necessary,  adapt  it to new  experiences.  The  recent 
efforts  of the  Commission  to reach  an agreement 
on trade  with  Japan  are particularly  welcome. 
6.2. Improved  control  of inflation 
6.2.1.  The  document  states  that  the rate  of (inflation 
should  be reduced  step-by-step  to the 4 to 5% mark 
by 1980  (point  75). 
In view  of the widely  diverging  rates  at which  prices 
are rising  in the  Member  States,  the guidelines  for 
the control  of inflation  can  only  ibe very  general  in 
nature.  The  Committee  regrets  chat  the Commission 
did not  make  a bigger  effort  to study  and  make  use 
of the  findings  of a group  of experts  which  it had 
set up to analyse  the causes  of inflation  and  make 
broad  recommendations  on  how  to  solve  this 
problem. 
6.2.2.  With  regard  to the  growth  of incomes  and 
asset  formation,  the Committee  takes  the view  that 
the document  sets  out a number  of measures  which 
are of considerable  importance  for  the  alleviation 
of tensions  in this  field.  Some  of these  measures  are 
generally  valid,  such  as  the  plan  to improve 
knowledge  albout  actual  incomes  and  their 
comparability  (point  94).  Current  statistics  about  the 
distribution  of incomes  are  inadequate.  Greater 
transparency  might  help  to present  the  whole 
problem  of income  distribution  in more  objective 
terms. 
6.2.3.  Improving  the  distribution  of wealth  (point 
95) is also  a general  problem,  which  has been  tackled 
hitherto  with  varying  degrees  of energy  in individual 
countries. The Committee  proposes  that  arrangements  be made 
for an exchange  of experience  in this  field,  to achieve 
cross-fertilization  of ideas. 
6.2.4.  Collective  negotiations  on the  problems  of 
wage  structure  are necessary  in some  Member  States 
(paragraph  94).  These  negotiations  must  secure  a 
satisfactory  wage  level  for both  low-  and  high-wage 
workers. 
The income  structure  of self-employed  workers 
cannot  be included  in these  collective  negotiations.  In 
the Committee's  view  a study  should  be made  of 
this problem. 
It goes  without  saying  that  disparities  between  men's 
and women's  wages  should  be abolished. 
6.2.5.  The  Committee  would  urge  'the Commission 
to revise  this  part  of the  document  thoroughly  in 
order  to make  its  meaning  and  its aims  more 
intelligible.  For  example,  the  'normal  level'  of 
profits,  the 'costs  imposed  by a return  to equilibrium 
growth'  and  the  'equitable  share  of price  increases' 
that is to be borne  by wage  earners  must  be explained 
in greater  detail.  So, too,  must  the precise  meaning 
of the upgrading  of manual  labour. 
6.2.6.  On  the  question  of competition  policy,  there 
is no doubt  that  workable  competition  is an 
important  precondition  of price  stability,  especially 
when  it is possible  to pass  on productivity  gains  to 
a large  extent  to the consumer. 
The Committee  therefore  supports  the  suggestions 
made  on this  subject  (points  96 and  106),  just  as it 
supports  the  promotion  of profitable  small-  and 
medium-sized  enterprises  and  the  extension  of 
consumer  protection. 
6.2.7.  The  Committee  also  holds  the  view  that 
'consumer  protection'  is too  restrictive  a term  to 
describe  what  the  goal  must  be.  The  part  of the 
text in question  should  be  entitled  'consumer 
information  and  protection'  and  should  also  refer 
to the need  for 'consumer  education',  which  should 
commence  as early  as possible. 
6.2.8.  With  regard  to point  105,  the  Committee 
would  point  out  that  major  banners  to free  access 
to all markets  in the Community  lie in the divergences 
7. 3. 77 Official  Journal  of the European  Communities No C 56/61 
in indirect  taxation  and,  in many  cases,  in disparities 
in technical  specifications.  It is in the  consumer's 
interest  to promote  cross-frontier  competition  by 
abolishing  these  differences.  Nobody  wants  cross-
frontier  shopping  expeditions  to  become  more 
widespread. 
6.3. Public  finance 
6.3.1.  In recent  years  there  has  been  a marked 
increase  in the proportion  of GDP  devoted  to public 
expenditure.  A large  number  of people  consider  that 
the ratio  of tax  burden  to net  domestic  product  is 
already  too  high  in several  Member  States.  In this 
context  the  tax  'burden  is taken  to include  social 
security  charges,  even  where  they  take  the  form  of 
insurance  contributions.  Furthermore,  it is clear  that 
in the  years  ahead  the  public  authorities  will  have 
to spend  large  sums  on stimulating  the economy  and 
meeting  the growing  demand  for public  services. 
6.3.2.  In view  of  this  dilemma,  the  document 
suggests  that  puiblic  finance  be gradually  adapted  to 
the new  situation.  It lays  great  weight  on the  need 
to improve  public  finance  efficiency,  on both  the 
revenue  and  the  expenditure  side,  and  as regards  its 
^distributive  impact  (point  109). will require  a marked  improvement  in the conditions 
governing  investment,  with  sales  expectations, 
financing  conditions  and  cost  trends  being  crucial 
here.  The  document  rightly  states  that  by outlining 
positive  and  realistic  goals,  the  Community  can  do 
much  to dissipate  pessimism  and  revive  investment. 
If investment  must  increase  over  the  next  few  years 
at a higher  rate  than  GDP  in order  to achieve  a 
lasting  return  to full  employment,  then  in the Com-
mittee's  view,  investment  should  be guided  towards 
industries  where  the  effect  on employment  will  be 
greatest. 
6.4.2.  In this  connection,  the  Committee  welcomes 
the reference  to the  need  to improve  the  flow  of 
information  about  structural  changes  which  are 
likely  to result  from  changes  in a number  oif domestic 
and external  economic  factors  (point  119).  Studies 
into the  impact  of  structura'l  changes  on  the 
employment  situation  and  the pattern  of employment 
are, however,  also  called  if or here.  The  Community 
is dependent  on exports,  the  developing  countries 
must  be given  market  opportunities  in the  Com-
munity  and  international  competition  is becoming 
keener  and  keener:  as a result  of all these  factors, 
the future  development  of Community  industry  will 
hinge  not  only  on its price  competitivity  but  also 
on its ability  to innovate.  The  Committee  therefore 
emphasizes  the  importance  of the  statements  in 
point  120. 
The Committee  endorses  the  above  findings.  A 
further  increase  in the  tax  burden  might  trigger  a 
number  of irrational  political  reactions,  of which 
there  are  already  examples  in a number  of Member 
States.  In addition,  increased  tax pressure  might  lead 
•to a spread  of tax  avoidance.  This  would  certainly 
not make  for a fair  distribution  of the tax burden. 
6.3.3.  The  Committee  considers,  however,  that  the 
action  taken  in the  light  of these  general  findings 
should  be tailored  to the  specific  situations  in the 
individual  Member  States.  Factors  to be taken  into 
consideration  include  the  mix  of direct  and  indirect 
taxation,  tax  assessment  bases  and  the  scope  for 
introducing  more  just  and  efficient  methods  of 
taxation. 
6.4. Investment,  employment  and  labour  market 
policies 
6.4.1.  In the  Committee's  view,  a medium-term 
growth  rate  of at least  4-5  to 5%  can  be achieved 
only  if investment  increases  faster  than  GDP.  This 6.4.3.  Even  if one  has  to concede  that  unemployment 
cannot  be conquered  in the short  term,  the forecasts 
that unemployment  will  not  fall  below  3%  in 1980 
should  not  be retained. 
This  is why  the  Economic  <and  Social  Committee 
supports  the  objectives  of the  Tripartite  Conference 
of June  1976  concerning  the  overall  restoration  of 
ful'l employment  in the  Community  between  now 
and 1980  at the  latest.  Intensive  efforts  must  be 
made  to improve  the  jobs  situation  quickly.  While 
it is true  that  any  reduction  of the  labour  supply 
must  be studied  particularly  thoroughly  (paragraph 
125) because  certain  measures  are  irreversible, 
reducing  working  hours  would  help  towards 
reducing  unemployment,  apart  from  being  socially 
desirable. 
Moreover,  the  Committee  would  again  like  to 
emphasize  that  bringing  forward  the  age  of 
retirement  — as a move  towards  Community-wide 
alignment  — should  not  be  ruled  out  in certain 
No C 56/62 Official  Journal  of the European  Communities 7. 3. 77 
Member  States.  As the  document  states,  such  early 
retirement  should  be on a voluntary  basis. 
6.4,4.  The  Committee  sees  little  point  in system-
atically  raising  the  school-leaving  age  solely  to 
reduce  the  supply  of laibour.  This  would  merely 
postpone  the  problem  posed  by the  entry  onto  the 
labour  market  of young  people  born  in high  birth-
rate years.  It is also  douibtful  whether  such  a step 
would  really  ,be in the  interests  of young  people. 
The Committee  nevertheless  regrets  the fact  that  the 
document  only  devotes  a short  iand  very  generally 
worded  sentence  to the  need  to provide  sufficient 
training  places.  This  should  be a major  aim  of 
employment  policy  over  the  next  few  years,  and  a 
concrete  Community  programme  should  be worked 
out. 
6.4.5.  In this  connection  it must  not  be forgotten 
that undeclared  work  has  an adverse  effect  on the 
implementation  of a vigorous  employment  policy  and 
makes  it difficult  to maintain  a balance  in public 
finances,  including  the  finances  of social  security 
institutions. 
6.5. Strengthening  the  Community 
6.5.1.  The  Committee  has repeatedly  commented  on 
the unsatisfactory  state  of the  Community  (l), and 
the Commission  document  is also  influenced  by the 
present  institutional  difficulties.  Under  these 
circumstances  it is important,  at least  initially,  to 
put the economy  on its feet  again  and  move  towards 
greater  convergence  of economic  trends  in the Com-
munity.  This  is the  purpose  of the  guidelines.  By 
'guidelines'  the  Committee  understands  a 
recommended  and  partially  quantified  outline  of 
policy  which  needs  to be adapted  to the  special 
features  and  conditions  in the  individual  Member 
States.  By reason  of their  nature,  such  guidelines 
cannot  be mandatory,  but the Member  States  should 
feel themselves  bound  to adjust  their  po'licy  in the 
light  thereof.  The  Committee  considers  that  there 
must  be an annual  check  to determine  whether  and 
to what  extent  the guidelines  are followed,  and  that 
the Council  of Ministers  must  draw  any  necessary 
conclusions  from  the results  of this  check. 
6.5.2.  The  Committee  considers  that  the  guidelines 
laid down  for  competition  policy  and  job  creation 
(») OJ No C 125,  16. 10. 1974  and OJ No C 270,  26. 11. 
1975. call for  some  general  comments.  The  Committee, 
would,  however,  refer  to the Committee  opinions  on 
these  matters  and  to the  opinions  on  regional 
policy,  external  economic  policy,  industrial  policy 
and the  economic  restructuring  of the  Community. 
These  opinions  contain  suggestions  for  practical 
implementation  of the  guidelines  set  out  in the 
programme.  The  Committee  considers  that  the 
guidelines  should  be acted  on as quickly  as (possible. 
7. Final  comments 
7.1. One  feature  of the  Commission  document  is 
that it does  not just  lay down  economic  iand  financial 
guidelines,  but also  goes  into  the political  and  social 
implications  and  conditions  of the  implementation 
of a medium-term  economic  policy.  It is certainly 
true that  establishment  of a social  consensus  on the 
medium-term  aims  and  the  way  they  are  to be 
achieved,  is of crucial  importance  to the  success  of 
the programme.  The  Committee  considers  that  this 
consensus  must  exist  not  only  between  the  State 
and the  two  sides  of industry  but  also  between  the 
State  and  all relevant  sectors  of society.  Very  special 
importance  nevertheless  attaches  to  continuing 
discussion  and  consultation  with  the  two  sides  of 
industry,  since  these  determine  a key  economic 
element  — mainly  wages  — in free  negotiations.  The 
Committee  therefore  underscores  the  relevant 
statements  in the  document.  It would  also  mention 
the special  role  which  it considers  the Economic  and 
Social  Committee  can  and  should  play  in connection 
with the formation  of a consensus. 
7.2. Although  there  is agreement  on the  goals  to 
be pursued  within  the  framework  of the  fourth 
medium-term  economic  policy  programme  and 
although  — as this  opinion  shows  — it has  been 
possible  to reach  a large  measure  of agreement  on 
important  individual  issues,  views  differ  considerably 
within  the  Committee  when  it comes  to assessing 
the document's  ibasic  trend.  On  the  one  hand, 
although  the  draft  speaks  of full  employment  as 
being  a priority  goal,  this  is not  treated  adequately 
as an independent  objective  'giving  rise  to a vigorous 
employment  policy.  It is unacceptable  that  the 
document  considers  a cutback  in the  growth  of 
wages  and  salaries  to ibe the only  way  of dealing 
with the  current  economic  crisis.  On the  other,  full 
employment,  economic  growth  and  stability  need 
to be  seen  as  being  interrelated,  with  full 
employment  representing  the  outcome  of a growth 
policy  that  pays  due  regard  to the need  for stability 
and is backed  up by an employment  policy.  At the 
7. 3. 77 Official  Journal  of the  European  Communities No C 56/63 
moment,  the  preconditions  for  an  increase  in 
investments  must  therefore  be improved  first  and 
foremost. 
7.3. The  Committee  would  underline  in particular  the 
evolving  nature  of the  programme,  which  is stressed 
several  times  in the  document.  It calls  upon  the 
Commission  to  submit  as  soon  as  possible  the 
proposals  which  are  necessary  if — to use  the  Com-
mission's  own  words  — the  reference  framework 
which  the  programme  represents  is to be translated 
info  concrete  economic  policy  measures. 
7.4. The  Economic  and  Social  Committee  confirms 
that it is ready  and  willing  to contribute  to the 
further  development  of this  medium-term  economic 
programme.  The  Committee  expects: — to be consulted  on the  individual  measures  which 
will be decided  on,  on  the  basis  of proposals 
from  the Commission, 
— to have  the  possibility  of:  (i)  reviewing  the 
quantitative  variables  of  the  medium-term 
economic  policy  programme  which  have  been 
revised  and  updated  by  the  Commission;  (ii) 
monitoring  Member  States'  policies  — both  in 
conjunction  with  the  Committee's  opinion  on the 
preliminary  budgets  (examination  of the economic 
situation  in the Community  in the second  quarter). 
Done  at Brussels,  25 November  1976. 
The Chairman 
of the Economic  and  Social  Committee 
Basil  de FERRANTI 
ANNEX 
to the  opinion  of the  Economic  and  Social  Committee 
The following  amendments  were  rejected  during  the discussion: 
Paragraphs  6.1.4  and  6.1.5. 
Run paragraphs  6.1.4  and  6.1.5  into  one.  Let  the first  sentence  stand: 
'As regards  wage  trends  it is important  that  it be possible  to amend  collective  wage  agree-
ments  when  they  are in force.' 
Delete  the remainder  of paragraph  6.1.4  and  continue  with  the rest  of point  6.1.5. 
Reason 
The idea  of sharing  hardships  is difficult  to understand  when  the  policy  aims  to increase  some 
peoples'  income  while  curbing  the development  of others. 
Voting 
For : 28, against:  33, abstentions  : 5. 
Paragraph  6.1.5. 
Delete  the first  and  second  sentences.  Amend  the third  sentence  to read: 
'The  Committee  emphatically  endorses  the  document's  basic  idea  (rest  unchanged).' 
Reason 
Paragraph  94 of the  Commission  document  states  correctly:  'The  fight  against  inflation  requires 
supporting  measures,  one  aspect  of which  must  be better  control  of incomes'. 
No C 56/64 Official  Journal  of the European  Communities 7. 3.77 
In paragraph  7, when  referring  to the  demand  which  'major  social  groups'  make  for a share  of 
the national  product,  the  Commission  states  that  'the  governments  and  the  Community,  acting 
together  with  the  two  sides  of industry,  must  discuss  and  determine  the  necessary  macro-
economic  framework  for this'. 
In order  to achieve  economic  and  social  objectives,  the  authorities  can  call  on the  following 
instruments: 
— budgetary  policy, 
— monetary  and  credit  policy. 
They  also  have  the power  — if this  proves  necessary  to achieve  the objectives  in question  — to 
regulate: 
— prices, 
— dividends, 
— investments, 
— mergers, 
— subsidies, 
— competition  rules,  etc. 
The draft  opinion  also  advocates  the  possiblity  of action  (cf.  6.2.4)  in respect  of self-employed 
persons'  incomes,  in order  to achieve  a better  'wages  structure'. 
It is difficult  to see  why,  given  the  comprehensive  range  of instruments  at the  governments 
disposal  (if necessary  to achieve  economic  and  social  objectives)  the government  should  have  to 
abstain  from  interfering  in collective  bargaining. 
Voting 
For : 14, against:  39, abstentions  : 16. 
Paragraph  6.4.4. 
The first  three  sentences  should  be replaced  by the following: 
The  school-leaving  age  must  not  be systematically  raised  simply  to postpone  the  entry  onto 
the labour  market  of young  people  born  in the  high  birth-rate  years.  This  measure  must  also 
be aimed  at improving  the  quality  of the  Community's  labour  force.  At the  same  time 
measures  must  be taken  to ensure  that  the  existing  production  apparatus  and  the  apparatus 
to be set up in the future  is in line  with  the  new  qualifications  being  acquired  by workers  in 
the Community. 
The raising  of the  school-leaving  age  must  also  not  be seen  only  in terms  of the  conventional 
periods  of education.  An  attempt  must  be made  to incorporate  all the  methods  by which 
people  can  improve  their  general  education  and  vocational  training  throughout  their  lives.' 
Reason 
The EEC  ought  not  to reject  raising  of the  school-leaving  age  absolutely. 
Stress  may  not  be put  solely  on improving  training,  but  it must  also  be ensured  that  the 
production  apparatus  changes  in terms  of a re-evaluation  or a better  evaluation  of labour. 
Lastly,  more  time  should  be given  to training  at every  age. 
Voting 
For : 31, against  : 31, abstentions  : 0. 
7. 3. 77 Official  Journal  of the European  Communities No C 56/65 
The following  parts  of the  opinion  of the  Section  for  Economic  and  Financial  Questions  were 
amended: 
Paragraph  3.3,  third  sentence 
'A regular  review  of the  quantitative  aspects  of the  guidelines  should  be carried  out  in 
conjunction  with  the annual  reports  on the economic  situation.' 
Paragraph  4.4,  fifth  sentence 
'Nevertheless,  every  effort  must  be made  to act in concert,  at least  in vital  matters.' 
Paragraph  6.1.2. 
'Nevertheless,  the  Section  emphatically  endorses  the  stabilization  of cyclical  fluctuations, 
which  is clearly  set as a goal  in the document  (point  90).  The  policy  must  be aimed  at pre-
venting  both  overheating  and  dramatic  sags  in economic  activity,  and  at pursuing  a pattern  of 
steady  growth.  Such  a policy  would  help  to take  some  of the  edge  off the  struggles  over  in-
come  distribution,  and  enable  each  category  of society  to adopt  a medium-term  rather  than 
a short-term  outlook.  A pre-condition  of this  policy  would  be a willingness  to abstain  for the 
moment  from  attempts  to get maximum  shares  of the national  income.' 
Paragraph  6.2.1,  second  paragraph 
'In view  of the  widely  diverging  rates  at which  prices  are increasing  in the  Member  States, 
the guidelines  for  the  control  of inflation  can  only  be very  general  in nature.  The  Section 
endorses  these  guidelines,  but  would  point  to the  urgent  need  for  them  to be made  more 
specific  and  translated  into  concrete  terms  in accordance  with  the  situation  in each  Member 
State.' 
Paragraph  6.2.4. 
The Section  thinks  that  the adjustment  of the wage  structure  (point  94),  which  has  a bearing 
on the question  of self-employed  persons'  incomes,  must  be defined  more  closely  on the basis 
of further  studies.  It goes  without  saying  that  disparities  between  men's  and  women's  wages 
should  be abolished  except  where  they  are  due  to different  qualifications  and  job  require-
ments.' 
Paragraph  6.4.3. 
'It has  to be assumed  that  the unemployment  problem  cannot  be resolved  in the short  term. 
If the trend  projection  proves  accurate,  the unemployment  rate  will  not  drop  below  3®/o  till 
1980.  The  Section  nevertheless  considers  that  a major  effort  must  be made  to improve  the 
employment  situation  as quickly  as possible.  It is correct  to say  that  measures  to reduce  the 
supply  of labour  must,  because  of their  irreversible  character,  be examined  with  special  care 
(point  125).  However,  the Section  would  put even  more  emphasis  than  the Commission  docu-
ment  on the fact  that  bringing  forward  the age  of retirement  (rest  unchanged)  .... 
voluntary  basis.' 
Paragraph  7.3,  last  sentence 
'The  Section  expects  to be consulted  on these  individual  measures,  too.'