Opinion of the Economic and Social Committee on the ' 1996 Annual Economic Report'
Date: 1996-04-24
Institutions: European Economic and Social Committee
Subjects: activity report, economic convergence, economic growth, economic policy, employment policy













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51996AC0539

Opinion of the Economic and Social Committee on the ' 1996 Annual Economic Report'  


Official Journal C 204 , 15/07/1996 P. 0045 





Opinion of the Economic and Social Committee on the '1996 Annual Economic  Report`(96/C 204/15)On 12  March 1996, the Commission decided to consult the Economic and  Social Committee on the '1996 Annual Economic Report`. The Section for Economic, Financial and Monetary Questions, which was responsible for preparing the  Committee's work on the subject, adopted its Opinion on 1  April 1996. The Rapporteur was Mrs  Konitzer. At its 335th Plenary Session (meeting of 24  April 1996), the Economic and Social Committee adopted  the following Opinion by 114 votes to 17 with 17 abstentions. 1. Summary1.1. The Economic and Social Committee is concerned at the current  macroeconomic trends identified by the Commission. After a year of recovery in 1994, in 1995 growth  fell short of expectations despite improved supply-side conditions. The further loss of momentum at  the end of the year, in particular, does not augur well for short to medium-term economic  prospects. 1.2. As stated by the Essen European Council and confirmed by the Cannes Council, equality of  opportunity and the reduction of unemployment remain the most important challenges facing the  European Union and its Member States. In the 1996 Annual Economic Report the Commission too once  again pinpoints the creation of jobs and the reduction of unemployment as the greatest challenges  facing the Community. Sustained, socially and environmentally acceptable, investment-driven growth  is however essential if these economic and social policy requirements are to be met and economic  and monetary union realized. 1.3. The Commission's assessment of economic fundamentals is positive. The Economic and Social  Committee therefore suspects that the reason for stagnating growth is a lack of confidence on the  part of the economic operators, varying in severity from one Member State to another. This is for  example an explanation for the nervous reaction of the financial markets to the weakness of the  dollar in the spring of 1995. This hypothesis is confirmed by the results of recent surveys.  Further confirmation is provided by the highly charged debate in some Member States on the dangers  of economic and monetary union. The upshot is that major investment plans are postponed or  cancelled altogether. 1.4. European policy must therefore perhaps aim more than ever to boost public confidence in  European unification strategy, in order to put the economy back on a healthy growth track and to  tackle outstanding problems. The Economic and Social Committee feels that the main problem  continues to be the virtually unchanged high level of unemployment and its economic and social  consequences. Public confidence will not be re-established unless tangible progress is made towards  the goal - set in the White Paper on growth, competitiveness and employment - of halving the  unemployment rate by 2000. 1.5. The Economic and Social Committee therefore calls on the Commission to promote the European  confidence pact for employment initiated by Commission President Jacques Santer and to develop it  into a European alliance for employment and stability. Leading representatives of all relevant  players in society, and particularly those responsible for monetary policy should be involved in  this alliance with a view to optimum macroeconomic coordination and implementation of medium- and  long-term policies. Such an alliance could ensure improved policy coordination between the European  institutions and between European and national levels, while observing the principle of  subsidiarity. In this way the policies set out in the White Paper could be more rapidly implemented  and public confidence in European policy restored. The Economic and Social Committee stresses its  willingness to give such an alliance its full support and to bring its experience to bear in order  to create possible synergy effects. 1.6. Efforts to achieve convergence must also be stepped up with due concern for the principle of  social balance. Stability and convergence are essential for economic and monetary union, but they  require sustained growth and an improved employment situation. Thus for example, the budget  deficits of many Member States are still too high. Against the current background of weak economic  growth, it should in the short term be borne in mind, with due regard for the situation in  individual Member States, that further contraction of demand as a result of restrictive fiscal  policy would increase the danger of a renewed slide into recession. 1.7. The response to weak economic growth must not, however, be to postpone EMU. In order to meet  the 1999 deadline the nominal convergence criteria of the Maastricht Treaty should be fully  respected and interpreted appropriately rather than mechanically. Moreover, a policy is needed  combining fiscal discipline, economic growth and employment measures, enabling a sufficient number  of Member States to join. EMU will only succeed in the long term if it lays the foundation for  economic and social policy coordination between the participating Member States. 1.8. Finally, the Economic and Social Committee sees a need to improve further the coordination of  economic policy at European level. In particular it feels that there is a need for more structural  measures. More incentives are needed for investment in the technologies of the future and to  promote the manufacture of innovative products, as this is where stable jobs will be created in the  long term. In addition to promoting research and development in Europe, it must be ensured that the  resulting innovative products are manufactured here, as it is only then that any impact on  employment will be felt. 1.9. The Committee's experience suggests that successful innovations take account of technological,  economic, organizational, social and human factors. Consensus-driven participation at all levels,  focusing on the promotion of employment and skills, is particularly important. 1.10. Although over the last few years a wages policy aimed at promoting growth and employment has  been pursued, the hoped-for improvements have not been forthcoming. Against this background, the  Economic and Social Committee rejects any wage-policy tendencies which might endanger the European  economic and social model, but agrees that it would be permissible to relieve the pressure on  low-wage jobs in particular by further reducing non-wage labour costs, if this helps to promote  employment. 1.11. The Economic and Social Committee believes that there is at present a danger of the European  economy moving into recession for lack of internal market demand. On the one hand, real interest  rate trends on the capital markets mean that investment in physical assets is still not  sufficiently attractive in comparison to financial investment. And on the other hand, wages policy  and the continuing high level of unemployment has meant a loss of purchasing power for private  consumers. The ESC calls on the economic operators concerned to carry out a searching analysis of  the situation and to tackle the problems thus revealed. 1.12. The ESC therefore stresses the need for it to draw up without delay an own-initiative Opinion  on employment, competitiveness and the globalization of the economy, in which the problem will be  analyzed in detail and medium-term strategies for the achievement of an employment-intensive and  innovative growth path mapped out. 1.13. In connection with the Intergovernmental Conference the ESC calls for employment to be  enshrined in the revised EU Treaty. 2. 1995 Stock-taking: economy weaker than expected2.1. International background2.1.1. Outside  the European Community economic activity has been on a sustained growth path since 1992. In  1993-1995 the imports of the rest of the world grew even more strongly than might have been  expected on the basis of GDP growth. The state of world demand has thus been generally positive for  European exports (see Table  1). 2.1.2. Europe's economic difficulties can however to some extent be attributed to international  currency turbulence. The pronounced weakness of the dollar, particularly between  December 1994 and   April 1995 gave rise to uncertainties in the European economy. The effects were unevenly felt in  the Member States, resulting in exchange rate changes within Europe. Within the EMS, the Spanish  peseta and the Portuguese escudo were devalued. The Italian lira, the pound sterling and the  Swedish krone also fell. 2.2. The Community economy2.2.1. After an upswing in 1994 the economic situation deteriorated,  particularly in the second half of 1995. The figures show that the growth of the Community economy  was disappointingly slow (see Tables 2 and 3). 2.2.2. The necessary improvement in the labour market situation could therefore not be achieved.  The unemployment rate continues to include a cyclical component and is correspondingly high. In  1995 it also once again proved impossible to bring average new borrowing by Europe's governments  down to the level required by the Maastricht Treaty's convergence criterion. 2.2.3. The Community's average rate of inflation continues to be low. This can be primarily  ascribed to a successful combination of monetary, fiscal and wages policy, the Community's improved  competitiveness and the Member States' progress in setting up independent central banks. The ESC  stresses however that the current weakness of demand must also be regarded as contributing to this  trend. 2.2.4. The Commission's assertion that the situation actually worsened in the second half of the  year is worrying. In the first half of the year the contribution from stocks and investment in  buildings fell sharply, whilst investment in plant and machinery and consumer demand continued to  rise. But in the second half of the year investment generally but also consumer demand were sharply  down. Only export demand can still be described as healthy, although even this lost momentum. 2.2.5. Short- and long-term interest rates fell once again towards the end of 1995, but as a yearly  average they were still up on 1994, so that on the whole they are partly responsible for the  slowing of growth in 1995. 2.2.6. There is no tangible evidence of any relaxation of the tensions in the labour market (see  Table 4). With young people accounting for more than 30 % of the unemployment pool, this is a  substantial waste of human resources and could threaten the EU's economic and social cohesion. The  trend towards lower unit wage costs which has been going on for many years continued in 1995. This  demonstrates quite clearly that supply-side improvements alone are not sufficient to guarantee  employment-policy success. 2.2.7. The survey indicators shown in Table 5 provide food for thought, but suggest that the  economic operators' expectations for the future are generally pessimistic. The sharply lower rate  of growth of planned investment in 1996 expresses this most clearly. 2.2.8. Economic policy-makers thus face the urgent task of breaking the vicious circle of falling  demand and pessimistic expectations. The Economic and Social Committee agrees with the Commission  that merely cranking up demand by means of excessive fiscal measures is not the right approach even  in the current situation. The resulting negative consequences, for example in the shape of higher  government indebtedness, would only further intensify the economic operators' loss of confidence.  This form of demand management also has to be rejected with a view to economic and monetary union. 2.2.9. What is needed, rather, is subtle coordination of the relevant policy areas: fiscal,  monetary, wages and working time policy, as well as labour market and structural policy. Chapters   3 and 4 set out the Economic and Social Committee's views on the possible components of such a  policy mix, on the role assigned to the individual policy areas and on the institutional  implementation of the economic and social strategy. 2.3. The convergence process in 19952.3.1. Nominal convergence2.3.1.1. Despite slower growth, the  Member States' efforts have in some areas been rewarded with improved nominal convergence (see  Table 6 which shows the present position of the Member States with regard to the Maastricht  criteria). 2.3.1.2. Eleven Member States currently meet the price stability criterion established by the  Maastricht Treaty. Of the Member States which do not, Greece still has a high level of inflation  and in Italy inflation was on a rising trend in 1995. 2.3.1.3. For an explanation one must look to the most recent rounds of intra-European devaluations.  Member States with devalued currencies continue to be at a particular risk of inflation. 2.3.1.4. There continues to be no discernible uniform trend in long-term interest rates. In 1995  the gap between Member States with high and low long-term interest rates respectively widened if  anything. The effect of turbulence on the foreign exchanges was thus to increase further the risk  premium attached to long-term government securities. 2.3.1.5. Budget deficits are on average still too high. As net government borrowing as a percentage  of GDP is particularly sensitive to economic performance, slower growth made it even more difficult  to fulfil this criterion. Further efforts are therefore needed to achieve the necessary nominal  convergence. A particular problem for economic policy in this context however is the fact that  restrictive fiscal policy is a two-edged sword: whilst its effect on the confidence of economic  operators, particularly in the capital markets, may result in lower interest rates, thus  stimulating the economy, its effect on the economy as a whole tends to be deflationary because of  the reduction of demand it causes. 2.3.2. Real convergence2.3.2.1. The Member States' real convergence will be assessed here on the  basis of the criteria set out by the Commission in its convergence report. 2.3.2.2. In 1995 unemployment rates continued to vary widely between the Member States (see Table  7). And divergent rates of unemployment endanger the economic and social cohesion of the Member  States. Thus they endanger convergence and cast doubt on the achievement of the goal of a Community  of stability. They are also an obstacle to the completion of the European internal market, which is  essential if EMU is to begin on time. 2.3.2.3. The rate of growth of per capita income also varied greatly between the Member States.  From the point of view of convergence, one problem was that in general low-income countries did not  achieve a higher growth rate than the average, so that in some cases divergences in pro capita GDP  widened further (). 2.3.2.4. As a result of moderate wage settlements in relation to labour productivity trends, unit  labour costs trended downwards throughout Europe. Only in Finland was there a slight rise on the  twelve months. No significant inflationary pressures need therefore be expected from the labour  market. 3. Comments on the various areas of policy3.1. Monetary policy3.1.1. The Economic and Social  Committee agrees with the Commission that there is scope in some Member States for further money  market interest rate cuts, in combination with a restrained fiscal policy and bearing in mind the  different starting situations, without risking a resurgence of inflation. For one thing, in the  present situation there is certainly no danger of demand overshooting. For another, the social  partners are looking for continued moderation in unit wage cost trends. The most recent money  supply trends need to be considered however. 3.1.2. The Economic and Social Committee therefore appeals to the central banks to shoulder their  statutory responsibility for the economy as a whole where no current threat exists to the primary  objective of price stability. 3.2. Fiscal policy3.2.1. The Economic and Social Committee shares the Commission's conviction that  budget consolidation will in the medium term have a positive effect on the economy as a whole. The  Committee emphasizes the need for such consolidation, not only with a view to EMU. 3.2.2. The Committee does not however share the Commission's optimism that a restrictive fiscal  policy will have beneficial effects in the short term. The Commission argues that a restrictive  fiscal policy will create scope for a relaxation of monetary policy and lead to lower long-term  interest rates, so that any contraction of government demand will be offset, even in the short  term, by additional private-sector demand. The Economic and Social Committee does not, however,  believe that the economic players will be able to change their plans at such short notice.  Particularly in view of the current lack of business confidence, firms are not likely to react  favourably to a further fall in public-sector contracts, even if this stagnation of demand is the  medium-term expression of a consolidation of public-sector budgets. 3.2.3. Against the current backdrop of underutilized capacity, further cuts in public-sector demand  will therefore in the short term not be offset by private-sector investment and consumption.  Although the ESC calls for budget consolidation to continue, though with due attention to the  individual situations of the Member States, in the short term it also advocates measures to prevent  recession. 3.2.4. The Economic and Social Committee believes that this kind of strategy will not damage  confidence if credible assurances are given that government demand is being focused still more on  future-orientated areas, with due allowance for structural considerations. 3.2.5. The Union Treaty offers ways of applying the convergence criteria appropriately, in a  non-mechanical way (). The scope allowed by the Treaty should be used particularly in relation to  the fiscal criteria, in order to enable Member States to join at an early stage despite cyclical  economic weakness. 3.3. Wages, employment and labour market policy3.3.1. The Economic and Social Committee stresses  the importance of wages and employment policy for a return to sustained growth and for a high level  of employment. It also points out that over the last few years the social partners have  consistently faced up to this responsibility by exercising restraint in wage settlements. But the  continuous supply-side improvements have not generated corresponding improvements in the labour  market. 3.3.2. The Economic and Social Committee feels that it would be wrong to place too heavy a burden  on wages policy. As in earlier Opinions it points to the link between wages policy and consumer  demand, which is potentially explosive in the current situation. In view of stagnating consumption,  wage restraint should not be carried so far that it curbs growth. Rather, policy should aim to  combat the phenomenon of anxiety-induced saving and thus to stabilize consumer demand. 3.3.3. The Economic and Social Committee agrees with the Commission that any tendency for wages  policy to endanger the European economic and social model would not be conducive to combatting  unemployment. In particular, a further downward extension of wage rates will not help solve the  problems associated with unemployment. It is well known that such an approach merely increases the  number of 'working poor`, while leaving the associated social problems unresolved. 3.3.4. The Economic and Social Committee does however see an opportunity for lightening still  further the burden of non-wage labour costs, particularly those for lower paid jobs, provided that  the employers' side in return announces a binding commitment to measures designed to safeguard and  promote jobs. In this connection, the ESC is in principle in favour of plans by the European  Commission or Member States for an economically and socially acceptable restructuring of the tax  system and of the way social security is funded. It points out however that the starting situations  on which the search for alternative forms of financing would be based differ widely from one Member  State to another. 3.3.5. The Economic and Social Committee believes that there is a need for greater coordination of  broad wages policy at European level, whilst retaining free collective bargaining. When EMU begins,  if not earlier, the important instrument of exchange-rate adjustments will no longer be available  to compensate for different levels of wage settlements. This change must be met, subject to  conscious observance of the principle of subsidiarity, with measures which would include a European  coordination mechanism, using common information and agreements, in order to promote real  convergence between the Member States, and thus sustained growth. 3.3.6. Efforts should be stepped up in the framework of labour market policy to counter tensions  arising from macroeconomically necessary structural change. More active measures should be taken to  encourage the job mobility of workers and to support their regional mobility. 3.3.7. In relation to other aspects of employment and labour market policy, and with reference to  The European employment strategy: recent progress and prospects for the future () and the work of  the Standing Committee on Employment, the Economic and Social Committee points to the need for  increased efforts to comply with the five points drawn up by the Essen Summit (). In particular the  Committee stresses the opportunity for promoting employment through innovative working time policy  (). 3.3.8. In this context, the Committee urges that the objective of equal opportunities be  consistently pursued, particularly in the labour market, despite weak economic growth, and it calls  for strict compliance with the fourth medium-term Community action programme on equal opportunities  for men and women () (see  Table  8, Unemployment in Europe). Gender-balance measures could play an  even larger part in action to stimulate the economy and in the award of public contracts. 3.4. Structural policy3.4.1. Structural policy has an extremely important role to play in  safeguarding and creating jobs. Europe has to compete with other major economic regions for  international 'footloose` capital and direct investment. It must exploit its strengths in order to  attract inward investment flows from innovative markets with a high potential for growth. Europe's  business advantages are basically good workforce skills, a relatively high level of social cohesion  by international standards resulting from the European economic and social model and, to an  increasing degree, a highly developed infrastructure. Further promotion of these strengths and  increased further training for managers will improve Europe's international competitiveness. 3.4.2. Increasingly the challenge facing structural policy is dismantling regional disparities in  order to promote a harmonious growth and employment policy in all the Member States. Apart from the  structural and cohesion funds, other important issues are completion of the internal market, the  start of economic and monetary union on schedule, and the development of trans-European networks  and their financing. 3.4.3. Making better use of human capital remains a priority. First, public investment in education  and training needs to be stepped up with a view to promoting leading-edge skills. Moreover firms  still have scope for developing participation and dialogue arrangements which will help to break  down traditional hierarchies and establish new management concepts, so as to maker better use of  workers' potential productivity. 3.4.4. The Economic and Social Committee calls for action to promote the translation of research  into industrial production and to extend the promotion of R& D to the application of newly  developed ideas to the production process. Only at this stage of the innovation process will  employment opportunities be created, and it is important that these be realized. Private-sector  investment decision-makers should be required to shoulder their social responsibilities and make  innovative investments in Europe if public-sector support has already given a lead. 3.4.5. The Economic and Social Committee stresses that Europe needs an innovation offensive both in  high technology and in services. In this connection it calls on the Commission to implement the  proposals of the Green Paper on innovation () without delay. Policy should be adjusted to offer  innovatory firms, especially small- and medium-sized firms, greater opportunities for development,  as this is where the greatest employment potential is to be found. Economic operators need to  rethink their strategy, particularly with regard to venture capital, creating a new financing  culture and preventing innovation being nipped in the bud. 3.4.6. The Economic and Social Committee suspects that there is unsatisfied demand for local and  regional services. The Committee calls on the Member States to act here by appropriate structuring  of tax opportunities and through regional policy reorientation, whilst however maintaining  sufficient social protection for workers in the sector. 3.4.7. The Economic and Social Committee points to the need to ensure that growth is ecologically  sustainable. In the long term jobs will be secure and competitive only against a background of  environmentally sound and technologically innovative economic management. 4. An alliance for employment and stability4.1. The Economic and Social Committee stresses the  need for still better coordination of macroeconomic policies at European level. It calls on all the  economic players to work together on a coherent economic strategy, on the basis of the White Paper  on growth, competitiveness and employment, with a view to achieving a higher rate of growth and  more employment, whilst maintaining the European economic and social model. Particularly during a  phase of weak growth, conditioned by the pessimistic expectations of market participants, any  inefficiency in the coordination of economic policies would have highly damaging consequences. It  would cause a loss of confidence, further postponement of decisions aimed at improving demand, and  ultimately further slowing of growth, with the inevitable consequences for employment. Progress  towards halving the unemployment rate by 2000, coupled with continuing convergence between the  Member States, is, however, essential for the achievement of economic and monetary union, the  cohesion of the Member States, and ultimately for the retention and development of the European  economic and social model, within the meaning of the first paragraph of Article  117 and Articles  130 and 130a of the EU Treaty. 4.2. The Economic and Social Committee believes that a new initiative to revitalize plans for  European unification on the basis of the White Paper is essential in this difficult economic and  social situation. In order to break out of the vicious circle of pessimism and stagnating demand, a  clear signal should be given to the economic players. The Economic and Social Committee therefore  calls for a European alliance for employment and stability. The primary aim of such an alliance  would be to develop, on the basis of the White Paper, a European economic and social strategy for  combatting the employment crisis, whilst complying with the requirements for stability. In this  connection the Economic and Social Committee welcomes the European confidence pact for employment  initiated by Commission President Jacques Santer. 4.3. The ESC considers it essential that all those responsible for the relevant policy areas  participate in the alliance. This means participation by representatives of the Member States with  responsibility for fiscal policy and employment policy, the central banks and the EMI in the field  of monetary policy, and finally management and labour as the prime movers of wages and employment  policy. The Economic and Social Committee affirms it intention of actively supporting this alliance  and its willingness to contribute in any way. 4.4. An alliance of this kind could facilitate smooth coordination of macroeconomic policies within  the framework of a coherent strategy. In the medium term, concerted measures could be adopted to  compensate for structural tensions in the growth process, to raise the employment-intensity of  growth to make sure that growth is sustainable, and to strengthen Europe's endogenous growth  capacity. New guidelines should be drawn up to this end which, with due regard for the principle of  subsidiarity, could then be translated into specific employment-promoting measures in the Member  States. 4.5. The Economic and Social Committee calls on the Commission to flesh out this alliance or to  develop the European confidence pact for employment initiated by Commission President Jacques  Santer. 4.6. Apart from its material contribution to policy, an alliance of this kind could send a signal  to the public and help to rebuild confidence in the policy of European unification and to curb the  rise of a general mood of resignation. 5. EU Intergovernmental Conference and employment5.1. In view of the current preparations for  review of the Treaties and the wider role which the economic and social interest groups are called  upon to play, both in helping to implement the 'broad guidelines` laid down by the Council and  their involvement in working out an incomes policy, the Economic and Social Committee urges that  its consultation be made compulsory in connection with the harmonization of economic policies  provided for in Article  103 of the EU Treaty. Furthermore, to make the procedure provided for in  this Article more transparent and more democratic, the Commission's right of initiative should be  restored and provision made for the involvement of the European Parliament (). 5.2. The Economic and Social Committee also calls for employment to be made an integral part of all  policy areas in the revised EU Treaty. In view of the acknowledged competence of the ESC and the  social partners in this area procedures should be established for their obligatory consultation. In  this way macroeconomic policy areas can be coordinated and macroeconomic policy adapted in an  economically and socially acceptable way to microeconomic requirements. Done at Brussels, 24  April 1996. The Presidentof the Economic and Social CommitteeCarlos FERRER() See also  table 7, which shows per capita GDP in purchasing power standard, thus excluding the influence of  exchange rate fluctuations.  () EC Treaty, Article  104c, Article  109j, Protocol on the excessive debt procedure.  () Communication from the Commission on trends and developments in employment systems in the EU,  COM(95) 465, 11.  10.  1995.  () See Opinion of the Economic and Social Committee on the 1995 Annual Economic Report, OJ No C  133, 31.  5.  1995, point  3.3.5 on the ESC's position on the Essen Summit points.  () See Opinion of the Economic and Social Committee on Working Time, OJ No C  18, 2.  1.  1996, p.   74.  () See Council Decision, OJ No L 335, 30.  12.  1995.  () COM(95) 688 final, 20.  12.  1995.  () See point 7.7 of the ESC's Opinion on the 1994 Annual Economic Report, OJ No C  195, 18.  7.   1994. APPENDIX 1 to the Opinion of the Economic and Social CommitteeStatistical appendixTABLES  ()>TABLE>>TABLE>>TABLE>>TABLE>>TABLE>>TABLE  POSITION>Explanatory note for table 6: Convergence criteria1. The criterion on price stability is respected when the price performance is  sustainable and when the average rate of inflation, observed over a period of one year before the  examination and measured by means of the consumer price index, does not exceed by more than 11/2  percentage points that of, at most, the three best performing Member States in terms of price  stability. 2. The criterion on the convergence of interest rates is respected when, observed over a period of  one year before the examination and measured on the basis of long-term government bonds or  comparable securities, a Member State has had an average nominal long-term interest rate that does  not exceed by more than 2 percentage points that of, at most, the three best performing Member  States in terms of price stability. 3. The first criterion on the budgetary position is respected when the ratio of the planned or  actual government deficit, defined as the general government net borrowing to gross domestic  product at market prices, does not exceed 3 %, unless either the ratio has declined substantially  and continuously and reached a level that comes close to the reference value; or, alternatively,  the excess over the reference value is only exceptional and temporary and the ratio remains close  to the reference value. The second criterion on the budgetary position is respected when the ratio of gross government  debt, at nominal value outstanding at the end of the year to gross domestic product at market  prices, does not exceed 60 %, unless the ratio is sufficiently diminishing and approaching the  reference value at a satisfactory pace. 4. The criterion on the participation in the ERM is respected when a Member State has respected the  normal fluctuation margins provided for by the ERM without severe tensions for at least the last  two years before the examination. In particular, the Member State shall not have devalued its  currency's bilateral central rate against any other Member State's currency on its own initiative  for the same period. >TABLE>>TABLE>() Source of tables 1-4 and 6: DG II Ameco database,  1995 figures,  November 1995 forecasts but taking account of the most recent information. D: up to 1991 figures for West Germany only (transitional figures to 1992). EUR: up to 1991 includes figures for West Germany only (transitional figures to 1992).  APPENDIX 2 to the Opinion of the Economic and Social CommitteeThe following members or  their representatives voted for the Opinion: Mr/Mrs/Miss: ANDREWS, ATAÍDE FERREIRA, BAEZA SANJUAN, BAGLIANO, BELABED, BENTO GONÇALVES, BERNABEI,  BETELU BAZO, BLESER, BRIESCH, van den BURG, BURKHARD, BURNEL, Vasco CAL, CARROLL, CASSINA, CEBALLO  HERRERO, CHEVALIER, CHRISTIE, COLOMBO, COSTA MACEDO, DANTIN, von der DECKEN, DELAPINA, DE NORRE,  van DIJK, DONOVAN, DRIJFHOUT-ZWEIJTZER, DRILLEAUD, DUNKEL, ELSTNER, ENGELEN-KEFER, ETTL, ETTY,  EULEN, EWERT, FERNANDEZ, FORGAS I CABRERA, FREEMAN, FRERICHS, FUCHS, GAFO FERNÁNDEZ, GAUDER,  GEUENICH, GIESECKE, GIRON, GOTTERO, GREEN, GRUSELIN, HAAZE, HERNÁNDEZ BATALLER, KALLIO, KANNISTO,  KIELMAN, de KNEGT, KONITZER, KONTIO, KOOPMAN, KRITZ, LAUR, LEHNHOFF, LEHTI, LEMMETTY, LINDMARK,  LINSSEN, LOENNBERG, MADDOCKS, MARGALEF MASIÀ, MASUCCI, MAYAYO BELLO, MEGHEN, MENGOZZI, MERCÉ JUSTE,  MERIANO, MERTEN, MOLINA VALLEJO, MULLER, MUÑIZ GUARDADO, NIELSEN Bent, NIELSEN Leif Erland,  NILSSON, NOORDWAL, NYBERG, OLAUSON, PARDON, PELLARINI, PIETTE, PRICOLO, PÉ, QUEVEDO ROJO,  RAMAEKERS, REUNA, RODRÍGUEZ GARCÍA CARO, SANCHEZ MIGUEL, SANDERSON, SANTIAGO, SANTOS, SCHMITZ,  SCHUNK, SEPI, SEQUEIRA, SIGMUND, SIRKEINEN, STROEM, TIXIER, TWIST, TUECHLER, VOGLER, WAHROLIN,  WESTERLUND, WILMS, WRIGHT, ZUFIAUR NARVAIZA, ZOEHRER. The following members or their representatives voted against the Opinion: Mr/Mrs/Miss: ASPINALL, BROOKES, zu EULENBURG, FARNLEITNER, GARDNER, GUILLAUME, JASCHICK, LITTLE,  MOBBS, MORELAND, MORGAN, POMPEN, SARALEHTO, SIMPSON, STOKKERS, STOELLNBERGER, WALKER. The following members or their representatives abstained: Mr/Mrs/Miss: BARROS VALE, BARROW, BEALE, BUNDGAARD, CAVALEIRO BRANDÃO, GHIGONIS, GIACOMELLI,  HAMRO-DROTZ, JOHANSEN, LEVITT, LUNDH, MALOSSE, OSENAT, de PAUL de BARCHIFONTAINE, REGNELL, SOLARI,  VEVER. APPENDIX 3 to the Opinion of the Economic and Social CommitteeThe following amendments,  which received at least one quarter of the total votes cast, were defeated in the course of the  debate: Point 1.3Delete the first two sentences. Insert: 'The Commission's assessment of the economic fundamentals is positive. Overall, there has been  progress in most countries in reducing the rate of inflation, or maintaining low inflation, and  managing public sector finances to reduce excessive Government borrowing. The conspicuous failure  has been in combining these positive features with higher internal rates of economic growth and, as  a consequence, unemployment remains high. The Economic and Social Committee is concerned to  understand the reasons for the stagnation of growth. In part this calls for a longer-term  re-examination of fundamental questions of economic policy. In addition, the Committee suspects  that, in the short term, there is a lack of confidence which is restraining demand in differing  degrees or in different Member States. This is, for example, ...`ReasonThe additional sentences  are to emphasize that the underlying questions about the rate of economic growth should not be  regarded too narrowly as questions of a lack of confidence. There may be a need for a fundamental  review of wider economic issues. This is endorsed in later paragraphs but is not identified in the  Summary. Result of the votingFor: 38, against: 79, abstentions: 12. Point 4.3Amend second sentence to read: 'This means participation by leading representatives of all the relevant groups in society,  including representatives of the Member States with responsibility for fiscal policy, the central  banks and the EMI in the field of monetary policy as well as management and labour, and other  interest groups.`ReasonSelf-explanatory. Result of the votingFor: 52, against: 75, abstentions: 8.