European Parliament resolution on the Commission communication on the contribution of public finances to growth and employment: improving quality and sustainability  (COM(2000) 846 - C5-0172/2001 - 2001/2082(COS))
Date: 2001-10-04
Institutions: European Parliament
Subjects: budget policy, economic growth, employment policy, public finance, stability pact

C 87 E/228

Official Journal of the European Communities

EN

11.4.2002

Thursday 4 October 2001

16.
Calls also on the national parliaments, in the form of their respective competent committees, the
Commission, the presidency of the Council and the Eurogroup, and the European Central Bank to hold an
annual meeting during a European Parliament part-session at the time of the preparation of the broad
economic policy guidelines in order to discuss them;

17.
Considers that for their part the national parliaments should draw up an annual assessment of the
implementation of the broad economic policy guidelines in their country and of their participation in the
coordination of the economic policies of the Member States of the euro area, which they could debate
annually with the European Parliament;

18.
Instructs its President to forward this resolution to the Council, the Eurogroup presidency, the
Commission, the European Central Bank and the governments and parliaments of the Member States and
candidate countries.

8. Growth and employment: improving quality and sustainability

A5-0306/2001

European Parliament resolution on the Commission communication on the contribution of public
improving quality and sustainability (COM(2000) 846 ,
finances to growth and employment:

C5-0172/2001 , 2001/2082(COS))

The European Parliament,

& having regard to the Commission communication (COM(2000) 846 & C5-0172/2001),

& having regard the Conclusions of the European Council held in Lisbon on 23/24 March 2000 (1),

& having regard to Rule 47(1) of its Rules of Procedure,

& having regard to the report of the Committee on Economic and Monetary Affairs and the opinion of

the Committee on Budgets A5-0306/2001,

A. whereas the over-extension of public expenditures in continental Europe over the past thirty years has
forced European governments to raise their taxes to an unbearable level, sapping potential growth in
the process,

B. whereas, facing the problems of uncertain financing of tax reform, brisk growth of spending or poss-
ible budgetary target overruns, the three biggest states of the euro area risk falling short of the provi-
sions of the Stability and Growth Pact, which sets as an objective a position ‘close to balance’ or ‘in
surplus’,

C. whereas the failure of public investment to revive economic growth on a sustainable basis in Japan
should induce policy-makers to operate with the utmost caution when designing such measures,

D. noting with interest from the Commission report that the so-called decline of public investment in

Europe may be purely statistical,

E. whereas many European governments have relaxed their budgetary efforts since 1998, relying mainly

on cyclical receipts and UMTS proceeds to reduce public deficit and public debt,

F. whereas the 60 % threshold of public debt provides already considerable room for Member States
wishing to invest, and crossing this threshold bears the risk of being cornered into an unsustainable
fiscal position in a medium to long-term perspective,

(1) SN 100/00.

11.4.2002

EN

Official Journal of the European Communities

C 87 E/229

Thursday 4 October 2001

G. whereas raising the employment participation rate in Europe is a major challenge for the years to

come,

H. whereas the Stockholm European Council called on the Council regularly to examine the long-term
sustainability of public finances, including the pressures that can be expected to result from demo-
graphic changes, and to do so in the framework both of the Broad Economic Policy Guidelines and
the Stability and Convergence Programmes,

I. whereas many Community programmes and measures, financed by the general budget of the Euro-
pean Union provide, through the principle of co-financing, for incentives at a national, regional and
sometimes even local level, and often serve as an example for similar measures at those levels,

Calls on the Commission and the Member States, despite the changed economic situation, to con-

1.
tinue to promote a knowledge-based and competitive economy with the objective of full employment;

2. Welcomes expressly the Commission communication, which for the first time, in accordance with
the mandate from the Lisbon European Council, acknowledges the part played by public finances and their
contribution to achieving the new strategic goal of promoting growth and employment;

Points out that, in addition to public finances, numerous other factors influence growth and job-

3.
creation long-term, and that those objectives can only be achieved by way of a balanced policy mix;

4.
Reminds Member States, especially bigger ones, that their budgetary consolidation process is not
over, and that attempts to loosen the budgetary stance are risky for the international credibility of the
whole euro area and would signal to the outside world that structural reforms in Europe are only slowly
making headway;

Calls on the Member States to stick to the engagements they have endorsed in the stability and

5.
convergence programs updated and validated by the Council in February/March 2001;

6. Welcomes the fact that the presidency conclusions of the European Council at Göteborg have clari-
fied that the objectives of a budget in balance or surplus have to be measured with figures calculating the
structural deficit; it is therefore consistent, as decided when adopting the Stability and Growth Pact, to
demand that automatic stabilisers should be allowed to work and that pro-cyclical fiscal policy should be
avoided; this may not be misinterpreted as a genuine spending licence when the fiscal position of a
Member State is not sustainable;

7.
Demands that Member States, in their convergence and stability programmes, present not only nomi-
nal deficit figures but also figures for the structural deficits excluding in the calculation the effects of the
business cycle on expenditure and revenue;

8. Warns national governments that even a temporary loosening of the fiscal stance may ruin a decade
of painful budgetary adjustment and that the commitment of the accession countries to build sound public
finances in the run-up to the EU may be weakened by such a deviation;

9.
Supports the general tone of the Commission report, welcoming in particular the Commission’s
attempt to define what would be a sustainable tax cut through four criteria: budgetary position ‘close-to-
balance or in surplus’, no pro-cyclical measures, account must be taken of the level of government debt
and long-term budget sustainability, and tax reform should form part of a comprehensive reform package
(i.e. to improve incentives for employment and entrepreneurial activity);

10.
Calls on the Member States to implement a responsible financial policy to support a long-term
sustainable and continuous upturn that can contribute substantially to employment and balanced budgets;

11.
Calls on the Commission to pursue its efforts by creating a ‘code of conduct’ designed to guide
national governments when they design tax cuts, and to intensify its efforts, in cooperation with national
finance ministers, to reach a common understanding of the responsiveness of tax revenues and public
spending to variations in each economy’s business cycle; draws attention to the need to put an end to
unfair tax competition in the interests of a functioning internal market;

C 87 E/230

Official Journal of the European Communities

EN

11.4.2002

Thursday 4 October 2001

Emphasises that ‘making work pay’ should be the priority for fiscal policies to tackle the employ-
12.
ment issue and to solve the so-called ‘structural problems’
in Europe; underlines in this respect that
decreases in labour taxes should target especially the lower end of the labour market, in order to increase
incentives to go back to work, and not VAT increases which have adverse effects on inflation, but without
running counter to efforts to coordinate tax systems across Europe and include an ecological component
in them;

13.
Calls, in the same context, for social, fiscal and administrative obstacles which keep women or older
people from returning to or remaining at work to be abolished, in order to give a greater section of the
workforce access to the labour market;

14.
Underlines that not only the size but also the quality of public investment determine its contribu-
tion to economic growth and employment; public investment must be properly targeted to reflect econ-
omic and social priorities and be efficiently managed;

15.
Considers that an increase in public and private spending in education and in research and devel-
opment is a necessity for the successful transition to the knowledge society, but underlines that this should
be coupled with structural reforms in the corresponding fields; encourages public research institutes and
universities to embark on partnerships with the private sector to optimise the existing amount of resources
devoted to education and research;

Urges Member States to guarantee appropriate occupational training for all young persons, and to
16.
ensure by way of appropriate support measures that young people are enabled to make a smooth transi-
tion to working life;

Regrets that the Commission proposal to include a paragraph about long-term sustainability of
17.
public finances in the stability and convergence programs falls short of providing an adequate answer to
ageing-related problems; calls instead on the Council and the Commission to extend current Stability and
Growth Pact requirements by setting new, individual targets for each country, taking into account the level
of hidden liabilities implied by an ageing society; proposes that such targets should be reached by 2005;

18.

Instructs its President to forward this resolution to the Council and the Commission.

9. Competition policy (2000)

A5-0299/2001

European Parliament resolution on the Commission’s XXXth Report on competition policy 2000
(SEC(2001) 694 , C5-0312/2001 , 2001/2130(COS))

The European Parliament,

& having regard to the Commission report (SEC(2001) 694 & C5-0312/2001),

& having regard to the written reply of the Commission to its resolution of 24 October 2000 on the
Commission’s twenty-ninth report on competition policy (SEC(2000) 720 & C5-0302/2000 & 2000/
2153(COS)) (1),

& having regard to its resolution of 21 September 2000 on the Commission communication on com-

petition rules relating to horizontal cooperation agreements (C5-0304/2000 & 2000/2154(COS)) (2),

& having regard to the Communication by the Commission relating to the revision of the 1997 notice

on minor agreements which do not fall under Article 81(1) of the Treaty (SEC(2001) 747) (3),

(1) OJ C 197, 12.7.2001, p. 96.
(2) OJ C 146, 17.5.2001, p. 106.
(3) OJ C 149, 19.5.2001, p. 18.