A4-0184/97

Resolution on the Commission's recommendation for the broad guidelines of the economic policies of the Member States and the Community for 1997 (COM(97)0168 - C4-0190/97)

The European Parliament,

- having regard to its resolution of 19 June 1996 on the Commission's recommendation on the broad economic guidelines for the Member States and the Community for 1996 ((OJ C 198, 8.7.1996, p. 115.)),

- having regard to the Commission's recommendation for the broad guidelines of the economic policies of the Member States and the Community for 1997 (COM(97)0168 - C4-0190/97),

- having regard to the Commission's annual economic report for 1997 (COM(97)0027 - C4-0078/97) and the European Parliament's resolution thereon of 9 April 1997 ((Minutes of that Sitting, Part II, Item 8.)),

- having regard to the White Paper on Growth, Competitiveness and Employment (COM(94)0700),

- having regard to the EC Treaty, and in particular Articles 2, 3a, 102a and 103 thereof,

- having regard to the conclusions of the Turin European Council of 29 March 1996, the Florence European Council of 21 and 22 June 1996 and the Dublin European Council of 13 and 14 December 1996, as well as the speech by President Santer at the Lille G7 conference on employment on 21 April 1996, all of which stipulate the fight against unemployment as a priority task,

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy and the opinion of the Committee on Employment and Social Affairs (A4-0184/97),

A. whereas the number of unemployed will not be reduced significantly, despite the fact that GDP is expected to grow in real terms by 2.3% in 1997 and 2.8% in 1998 and, moreover, supply-side fundamentals are favourable, e.g. buoyant exports and earnings, moderate pay rises, sound investment profitability and a reduction in borrowing costs,

B. whereas public investment, as a proportion of GDP, fell by 0.3% between 1995 and 1997, reaching a historic low, and is expected to stagnate for the 1997/1998 period,

C. whereas more far-reaching proposals for structural reforms would have provided a better basis for the revival of the European economy, and whereas the Commission's recommendations for structural reforms merely mention measures such as the reform of the labour market or the imperfect functioning of the single market,

D. whereas the main obstacles to strong economic and employment growth are the lack of profitability of industrial investment, the high level of production costs, the scale of fiscal and parafiscal levies and the inflexibility of the labour market,

E. whereas the European Union is not in a position to contribute to the modernization of European infrastructure, and whereas its competitiveness and prospects for growth are deteriorating in the medium term as a result,

F. whereas the competitiveness of European industry also depends on technological innovation, the quality of education, vocational training and further training, and on transport and telecommunications infrastructure,

G. whereas any economic policy action must be inspired by the aim to approach a new model of development, as outlined in the last chapter of the abovementioned White Paper on Growth, Competitiveness and Employment,

1. Calls for the broad guidelines to include the coordination of economic policies in accordance with Article 3a of the EC Treaty, on the basis of an appropriate and adequate policy mix combining economic, structural, fiscal, monetary and incomes policies and targeting a medium-term budgetary consolidation which takes account of initial economic conditions, and thereby creates a sound balance between the budget deficit and the encouragement of employment-generating growth;

2. Regrets that the Commission's recommendation merely reiterates the principles upon which the convergence criteria are based, i.e. price and exchange-rate stability and the reduction of public-sector deficits; welcomes the fact, however, that the Commission stresses the need for the efficient use of public resources, in particular with regard to a more effective focus on productive investment;

3. Points out that the Commission's recommendation is concerned more with individual recommendations to the Member States than with a genuine coordination of economic policies on the basis of common objectives, as defined in Article 2 of the EC Treaty;

4. Stresses the fact that well-targeted innovation policies are the most promising key to sound economic development and that strong environmental standards as regards the production of goods and the goods themselves will lead the way to fostering desirable innovation;

5. Calls on the Council to incorporate an active employment policy within the meaning of the European Council decisions taken at Essen and Dublin into the broad economic guidelines for 1997, so that a lasting improvement can be achieved in the conditions for safeguarding and creating gainful employment by means of practical and coordinated measures;

6. Calls for the fight against unemployment to be incorporated into every policy and proposes that, to this end, a Council combining the ECOFIN Council and the Council of Ministers for Employment and Social Affairs should submit recommendations to the European Council stressing the importance of knitting together the broad lines of the economic and employment policies of the Member States and the Community and directing them towards achieving a high level of employment;

7. Calls for the multiannual employment programmes to be developed within the context of the broad guidelines of the economic policies to ensure that these recommendations are applied and followed up in a concrete way as regards the jobs market and employment;

8. Calls for the introduction, as soon as possible, of measures to improve skills, training and further training and to create new jobs in the environmental and cultural fields, as well as in the care services, in collaboration with non- governmental organizations and voluntary associations; also calls for a better environment to be created for micro-enterprises, as an important employment- generating factor in the European Union;

9. Believes that one-man, small and medium-sized businesses (if necessary in conjunction with local or regional authorities and NGOs) could create a great many jobs in the context of a new 'social economy', in particular in the provision of local services in people's immediate environments such as child care and home care, services designed to improve the quality of life, such as safety and public transport, cultural and recreational services and environmental and nature conservancy services; stresses, however, that a great many legislative and regulatory obstacles still impede the provision of such services;

10. Calls on the Commission and the Council to take the measures required to restore confidence so as to reduce the amount of precautionary savings and, in this way, to boost internal demand;

11. Calls on the Council to persuade the Member States to create the conditions which would result in an increase in both private and public investment; in this respect stresses the need for 'benchmarking' for investment;

12. Calls on the Council to require the Member States to make available resources, which are not to be included in budgetary deficits, and which are needed to supplement the Structural Funds in order to implement Community policies for combating unemployment and improving economic and social cohesion;

13. Calls for enhanced public-sector investment which is socially and economically profitable, where such investment can be identified, and which stimulates private investment, and stresses the need for the extension of the Community's financial instruments, such as the EIB, and the introduction of Community bond issues to finance major Community investment projects and to provide financial support for SMEs, in particular, to form part of the broad guidelines;

14. Calls on the Council to accept unreservedly the call made by the European Parliament in connection with the guidelines, and taken over by the Commission, that it finally establish the trans-European communications, transport, energy and environmental networks, actively implement them and, to that end, make use of and extend the European Union's financial instruments;

15. Calls, in particular, for measures to stimulate and encourage R& D by means of appropriate tax concessions (particularly for SMEs), to improve access to and the availability of risk capital for SMEs operating in the R& D sector, and to promote both an effective research infrastructure and close cross- border cooperation between firms, universities and research institutions; calls for improvements in the general environment for SMEs and the conditions for innovation by them, and for start-ups as well as industrial structures in the fields of new materials and environmental technologies;

16. Calls on the Council to take greater account in the broad guidelines of the Member States' mutual economic interdependence which has been brought about by the achievement of the single market and which increasingly limits the effectiveness of purely national economic policies; considers, therefore, that further progress towards enhancing the complementarity of Member States' economic policies is vital in order to achieve synergies in the following areas which are important for the future of the European Union:

- improvements in the economic, social and administrative environment for firms, particularly for small and medium-sized businesses,

- stimulation of innovation, research and technological development,

- adaptation of education, training and further training systems to the technological and social changes of modern times;

- abstention from social, environmental, monetary and tax 'dumping', which are harmful to the Community;

17. Stresses the need for improved coordination and consistency between policies relevant to employment and the economy, by means of an extension of the procedure laid down in Article 103 of the EC Treaty, primarily with a view to ensuring the comprehensive involvement of the European Parliament on the basis of an interinstitutional agreement between the Council, the Commission and the European Parliament;

18. Instructs its President to forward this resolution to the Council, the Commission and the parliaments of the Member States.