Resolution on the single currency, employment and growth
Date: 1996-02-29
Institutions: European Parliament
Subjects: economic convergence, economic growth, euro, job creation, monetary union













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51996IP0260

Resolution on the single currency, employment and growth  


Official Journal C 078 , 18/03/1996 P. 0029 





B4-0260, 0261, 0263 and 0269/96Resolution on the single currency, employment and growthThe European Parliament,- having regard to the White Paper on growth, competitiveness and employment and the White Paper on social policy,- having regard to the conclusions of the Essen and Cannes European Councils, the joint Commission/Council (Ecofin and Social Affairs) report on the employment policies of the Member States approved at the Madrid European Council, and the Ecofin report on Member States' adherence to the broad economic guidelines,- having regard to the statement by Commission President Jacques Santer to Parliament on 31 January 1996 introducing the European Pact for Confidence and Employment,A. noting the danger that rising unemployment will jeopardize public acceptance of EMU and make it more difficult for Member States to meet the convergence criteria,B. noting the paradox that the European economy, which is currently strong in terms of its fundamentals, is nevertheless suffering from low consumer confidence, low investment and high unemployment,1. Calls for the terms of the Treaty on European Union for the transition to a single currency to be adhered to;2. Recalls in this respect that, in order to meet the budget criteria set out in the Treaty, Member States are required to have a government deficit that does not exceed 3% of GDP, or which has declined substantially and continuously and comes close to 3% of GDP, or alternatively which exceeds 3% of GDP only exceptionally and temporarily and remains close to 3% of GDP, as well as a government debt which does not exceed 60% of GDP, or is sufficiently diminishing and approaching 60% of GDP at a satisfactory pace;3. Recalls, too, that the Treaty requires that the general economic position be taken into account when assessing whether or not a Member State can be considered to have an excessive deficit;4. Insists that Parliament be consulted on all reports, guidelines and recommendations necessitated by the introduction of the single currency and in particular, following the Madrid European Council, on the reports to be prepared on the relationship between participating and non-participating Member States in the Euro area, given the importance of sustaining and consolidating the single market, and on proposals for achieving durable convergence;5. Believes that the concept of durable convergence must be consistent with existing Treaty provisions and principles and, while including necessary budget discipline for states participating in Stage III, must also include appropriate budget flexibility, budget capacity and appropriate instruments of fiscal policy to react to economic shocks at regional, national and European level and to manage the state of the real European economy over a full business cycle;6. Stresses that, if the fiscal consolidation required to meet the convergence criteria is not to have an adverse effect on employment, it is essential that governments and monetary authorities ensure an appropriate balance of fiscal and monetary policies; it is also essential that existing Treaty obligations concerning economic coordination at European level are met;7. Points to the fact that this balance must be achieved throughout the European Union in 1996 so that, as a result, long-term real interest rates could go down and stimulate investment and growth, particularly in the private sector;8. Emphasizes, too, that since there are strong signs that inflation is under control in the European economy, monetary authorities must ensure that this is reflected in the financial markets;9. Stresses that the negative effects of exchange-rate turbulences in the recent past have resulted in a reduction of investment in Europe and in the loss of several hundred thousand jobs and underlines, in this respect, that EMU is not an aim in itself but contributes to creating a favourable environment for investment and job creation;10. Given that the continuing high level of unemployment undermines the confidence of citizens in the European integration process and particularly in the single currency, stresses that the emphasis should be placed on the role which the EU can play in the fight against unemployment, and on the fact that EMU provides a means of improving employment prospects and maintaining the level of social protection in Europe; asks, in this respect, that the results of the far-reaching analysis of the impact of Community policies on employment advocated by President Santer during his statement to the European Parliament in January 1996 be made rapidly available;11. Welcomes the fact that the Commission is taking its responsibilities seriously by launching the European Pact for Confidence and Employment, stresses the positive impact this initiative should have in terms of bringing citizens closer to the European integration process, and calls on the Member States to respond by speeding up the implementation of structural reforms at national level, and on the social partners to respond by adopting a positive attitude to negotiated measures aimed at creating jobs;12. Stresses that the benefits of these efforts can only be realized through stronger coordination of Member States' fiscal, monetary and structural policies;13. Instructs its President to forward this resolution to the Council, the Commission and the parliaments of the Member States.