European Parliament resolution on the Commission recommendation on the 2004 update of the Broad Guidelines of the Economic Policies of the Member States and the Community (for the 2003-2005 period) (COM(2004) 238 — C5-0183/2004—2004/2020(INI))
Date: 2004-04-22
Institutions: Committee on Economic and Monetary Affairs, European Parliament
Subjects: EU Member State, economic convergence, economic growth, economic policy, macroeconomics

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Deplores the exploitation of the ‘Zana trial’ by those who wish to impede the reform process in

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Turkey;

Stresses that this case is symbolic of the gap which exists between the Turkish judicial system and

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that of the European Union;

5.
Condemns the breaches of the rights of defence which have occurred during the new trial against
Leyla Zana and others, such as the presence of the State Prosecutor in all the rooms where the judges were
required to take decisions concerning the accused, the failure to acknowledge the right of the accused to
be released in accordance with the ECHR judgment of 17 July 2001, and the inability of the defence to
check the veracity of the accusations made by the State Prosecutor;

Calls for the immediate abolition of the State Security Courts, and calls on the Turkish parliamentary

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and governmental authorities to take practical steps to deal with this issue;

Hopes that the Turkish final Court of Appeal will quash the sentence imposed on Mrs Zana and the

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three other former Turkish MPs of Kurdish origin;

8.

Calls on the Turkish authorities to grant an amnesty to all those imprisoned for their political views;

Instructs its President to forward this resolution to the Council, the Commission and the Turkish

9.
Government and Parliament.

P5_TA(2004)0378

Broad guidelines of economic policy

European Parliament resolution on the Commission recommendation on the 2004 update of the
Broad Guidelines of the Economic Policies of the Member States and the Community (for the
2003-2005 period) (COM(2004) 238 (cid:1) C5-0183/2004(cid:1)2004/2020(INI))

The European Parliament,

(cid:1) having regard to the Commission recommendation (COM(2004) 238 (cid:1) C5-0183/2004),

(cid:1) having regard to Article 99(2) of the EC Treaty,

(cid:1) having regard to the Commission report on the implementation of the 2003-2005 Broad Economic

Policy Guidelines (COM(2003) 170),

(cid:1) having regard to its resolutions of 12 March 2003 on the state of the European economy (cid:1) prepara-
tory report with a view to the Commission recommendation on Broad Economic Policy Guidelines (1)
and of 15 May 2003 on the Commission recommendation on the Broad Guidelines of the Economic
Policies of the Member States and the Community (for the 2003-2005 period) (2) and to its resolution
of the 23 October 2003 on the outcome of the European Council meeting held in Brussels on
16/17 October 2003 (3),

(cid:1) having regard to the Commission’s Spring Economic Forecasts 2004-2005 for the euro area, the

European Union and the Acceding and Candidate countries,

(cid:1) having regard to the Commission report to the Spring European Council (COM(2004) 29),

(cid:1) having regard to its resolution on the situation of the European economy, report on the broad guide-

lines for economic policies of 26 February 2004 (4),

(cid:1) having regard to its resolution on the Spring Summit: follow-up to Lisbon of 26 February 2004 (5),

(1) OJ C 61 E, 10.3.2004, p. 294.
(2) OJ C 67 E, 17.3.2004, p. 295.
(3) P5_TA(2003)0459.
(4) P5_TA(2004)0116.
(5) P5_TA(2004)0114.

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(cid:1) having regard to the Presidency conclusions of the Lisbon European Council of 23 and 24 March
2000, the Gothenburg European Council of 15 and 16 June 2001 and the Barcelona European Coun-
cil of 15 and 16 March 2003,

(cid:1) having regard to the Presidency Conclusions of the Brussels European Councils of 20 and 21 March

2003, of 16 and 17 October 2003 and of 25 and 26 March 2004,

(cid:1) having regard to the Communication from the Commission ‘A European Initiative for Growth, Invest-
to the European Council

ing in Networks and Knowledge for Growth and Jobs, Final Report
(COM(2003) 690)’,

(cid:1) having regard to the opinion of the European Economic and Social Committee on the Assessment of
the experiences gathered by the EESC to evaluate the economic, social and employment impact of
structural reforms in the EU (ECO/109, CESE 1406/2003),

(cid:1) having regard to the report of the Committee on Economic and Monetary Affairs (A5-0280/2004),

A. whereas growth in word trade has experienced a strong rebound of 5 % in 2003 and is expected to
accelerate to almost 8 % in 2004-2005, whereas world GDP growth is estimated to have been at 3,7 %
in 2003 and world economic activity should expand at 4,5 % in 2004,

B. whereas regional distribution of world growth widened in 2003, with stronger-than-expected con-
tributions coming from the USA, the CIS, OPEC, Asia and the acceding countries; whereas the
recovery in the US is expected to continue with growth at 4,2 % in 2004, whereas the economic
outlook for Asia (excluding Japan) remains in the vicinity of 7 % in 2004-2005 with striking growth
rates in India and China, and Latin America is expected to double its growth rate in 2004,

C. whereas the world-wide growth rebound is still fragile, especially in the USA, where the present
monetary and fiscal policy may well prove not to be sustainable over a long period, and may result
in a difficult and painful phase of fiscal consolidation,

D. whereas the European Union is experiencing the most protracted period of weak growth since the
second world war, with three years of economic slowdown and stagnation or even recession in some
larger Member States, whereas, by contrast with the average growth rate of the world of 3,7 % of GDP,
the European Union’s growth rate has been just 0,8 % and the Euro area growth rate only 0,4 % of
GDP in 2003,

E. whereas the Commission forecasts three years in a row a rebound to average growth rates of 1,7 % to
1,8 % for the Euro area and 2 % for the EU; whereas for the Euro area, the recent rebound is mainly
driven by a surge in the growth of exports, while domestic demand has so far been negative due to
low private consumption and three quarters of a downward trend in investment that was only broken
in the fourth quarter when investment finally picked up;

F. whereas the new Member States have expanded on average at 3,5 % of GDP in 2003 as accession

unleashed favourable growth dynamics;

1.
Approves the Commission’s position that the Broad Economic Policy Guidelines 2003-2005 remain
valid but must be more focused on structural reforms, investment and more and better jobs, welcomes the
European Action for Growth and calls for additional measures complementing the initiative at national
level, in particular in the fields of human resources, R & D and innovation;

2.
Repeats its conviction that application of the Stability and Growth Pact is needed to bring Europe’s
economy more swiftly back into balance; urges those Member States whose budget is not in surplus or is
at least in balance to undertake all necessary steps to achieve these aims;

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3. Welcomes the focus in this update on the integration of the ten new Member States into the econ-
omic policy co-ordination framework and the completion of the existing strategy with the inclusion of
country-specific recommendations for the ten new Member States;

4.
Points out that the current EU budget spending of 0.8 % of GDP may be exceeded, insisting that
there is room to spend as much as 1,24 % of GDP 2004-2006 and still keep within the present financial
perspective 2000-2006 and the Lisbon objectives, and retain full promotion of the European Structural
Funds with all Lisbon objectives during the second phase of the programme period 2000-2006;

5.

Calls on the Council to take account of the following modifications:

COMMISSION RECOMMENDATION

MODIFICATIONS BY PARLIAMENT

Modification 1
Part I, Chapter 1, Title

1.

The existing strategy remains valid.

1.
The existing strategy remains valid, BUT MUST BE
MORE FOCUSED ON STRUCTURAL REFORMS, INVEST-
MENT AND MORE AND BETTER JOBS.

Modification 2
Part I, Chapter 1, paragraph 2

Against the background of the results of a first assessment of
the follow-up given to the 2003-2005 BEPGs as presented in
the Implementation Report and the guidance from the Spring
2004 European Council,
this recommendation updates and
completes the existing strategy. No major policy adjustments
are deemed necessary that would warrant a change in the
general guidelines. The focus in this update is on the inte-
gration of the ten new Member States into the existing econ-
omic policy coordination framework.

Against the background of the results of a first assessment of
the follow-up given to the 2003-2005 BEPGs as presented in
the Implementation Report and the guidance from the Spring
2004 European Council,
this recommendation updates and
completes the existing strategy. The general guidelines 2003-
2005 remain valid but must be focused even more on boost-
ing economic growth resulting in job creation and productiv-
ity growth. In view of the prolonged phase of economic slow-
down and the disappointing growth rates and speed of
recovery as compared to other regions in the world, Europe
must strengthen internal economic growth and increase the
focus on strengthening economic, social and environmental
sustainability. This will not only help to reduce Europe’s vul-
nerability to the negative impacts of the appreciation of the
Euro and other external shocks and risks such as inter-
national terrorism but also facilitate the integration of the
internal market and the real economic convergence of all
Members States, including the 10 new Member States in the
internal market. The second focus in this update is on the inte-
gration of the ten new Member States into the existing econ-
omic policy coordination framework.

Modification 3
Part I, Chapter 2, Title

2.

IMPROVED ECONOMIC BACKGROUND.

IMPROVED ECONOMIC BACKGROUND SLOWLY
2.
LEADING TO A RECOVERY IN THE EUROPEAN UNION

Modification 4
Part I, Chapter 2, Paragraph 4

Overall, economic developments are in line with the prevailing
expectations when adopting the medium-term economic policy
strategy: the economy is recovering, albeit at a moderate pace,

Overall, economic developments are in line with the prevailing
expectations when adopting the medium-term economic policy
strategy: the economy is recovering, albeit at a moderate pace,

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COMMISSION RECOMMENDATION

MODIFICATIONS BY PARLIAMENT

that

and the outlook for 2004-2005 does not point to any macro-
economic imbalances requiring a policy change. At the same
time, the forecast illustrates the still slow adjustment capacity
of the EU economy and the low level of potential growth. It is
therefore essential
the improving economic conditions
should be fully seized upon to make decisive progress in clos-
ing the ‘delivery gap’ in terms of discrepancy between envis-
aged and eventually adopted structural reform measures. The
current pick-up in economic activity could be further under-
pinned by sound macroeconomic policies and by determined
implementation of all the growth-enhancing economic reforms
outlined at the 2003-2005 BEPGs.

that

and the outlook for 2004-2005 does not point to any macro-
economic imbalances requiring a policy change. At the same
time, the forecast illustrates the still slow adjustment capacity
of the EU economy and the low level of potential growth. It is
therefore essential
the improving economic conditions
should be fully seized upon to make decisive progress in clos-
ing the ‘delivery gap’ in terms of discrepancy between envis-
aged and eventually adopted structural reform measures. The
current pick-up in economic activity could be further under-
pinned by sound macroeconomic policies and by determined
implementation of all the growth-enhancing economic reforms
outlined at
the 2003-2005 BEPGs. More emphasis should
however be put on investment in education, skills, lifelong
learning, innovation, research and development, and in an
industrial policy with a special focus on SMEs, renewable
energy and environmentally friendly technology.

The Environmental Technology Action Plan should be
speedily implemented.

Furthermore, with the enlargement, social and regional cohe-
sion are now even more central to the Lisbon Agenda. Stra-
tegies that have a decisive impact on real economic conver-
gence, the reduction of the informal sector, social exclusion
and the eradication of poverty must be reinforced.

Investments aimed at enhancing growth could also be
financed by an improvement in the collection of public reve-
nues, focusing on the widespread problem of tax fraud, which
deprives Member Sates of considerable fiscal resources. The
Commission should work with Member States to establish a
co-operation and benchmarking system to combat tax fraud
and unfair tax competition;

Negotiations on appropriate and equitable measures leading
to an increase in the adaptability of workers, flexibility in
standard contracts and more security in non-standard con-
tracts, attracting more people to and keeping more people in
employment, increasing the overall flexibility of the labour
market and increasing investments in human resources are
keys to achieving economic and social success.

Modification 5

Part I, Chapter 3, Section 3.1, paragraph 2

The new Member States will need to seek a strong synergy
between the necessary structural reforms and macroeconomic
policies that underpin stability. Exchange rate regimes consti-
tute an important part of the overall economic- and monetary
policy framework and should be oriented towards achieving

The new Member States will need to seek a strong synergy
between the necessary structural reforms, investment and mac-
roeconomic policies
that underpin stability and growth.
Exchange rate regimes constitute an important part of the
overall economic and monetary policy framework and should

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real- and sustainable nominal convergence. Participation in
ERM II, at some stage after accession, should help those endea-
vours. A credible monetary policy will allow for a further
decline in long-term interest rates that is conducive to both the
much needed high level of investment and fiscal consolidation.

be oriented towards achieving real and sustainable nominal
convergence. Participation in ERM II, at some stage after acces-
sion, should help those endeavours. A credible monetary policy
will allow for a further lowering of long-term interest rates con-
ducive to both the much needed high level of investment and
fiscal consolidation.

Modification 6

Part I, Chapter 3, Section 3.3, paragraph 3

Overall, sound economic policies make an important contribu-
tion to social sustainability as jobs play a vital role in lifting
people out of poverty and social exclusion. In the new Member
States, additional emphasis must be put on modernising social
protection systems and improving the skills of the work force,
with a view to increasing participation rates and improving
mobility. The low employment rates of both young and older
workers require special attention in this respect. Pronounced
regional disparities need to be addressed, notably by ensuring
efficient investments and an appropriate wage differentiation
(reflecting differences in productivity). In addition, the business
environment has to be improved, particularly by capacity
building measures in public administration. This should also
enhance the efficiency in the use of EU Structural and Cohe-
sion funds.

Overall, sound economic policies make an important contribu-
tion to social sustainability as jobs play a vital role in lifting
people out of poverty and social exclusion. Like the present
Member States, the new Member States must put additional
emphasis on modernising social protection systems and
improving the skills of the work force, with a view to increas-
ing participation rates and improving mobility. The low
employment rates of both young and older workers require
special attention in this respect. Pronounced regional disparities
need to be addressed, notably by ensuring efficient investment
and appropriate wage differentiation (reflecting differences in
productivity). In addition, the business environment has to be
improved, particularly by capacity building measures in public
administration and measures in support of lifelong learning.
This should also enhance efficiency in the use of EU Structural
and Cohesion funds.

Modification 7

Part I, Chapter 3, Section 3.3, Paragraph 4

The substantial investments in energy and transport infrastruc-
ture that are needed in most of the new Member States aim at
reducing the environmental impacts of energy and transport
use and improving energy efficiency. Such investments will be
crucial as their energy intensities exceed those of current
Member States by a factor of almost 4, see Table 3, in spite of
improvements of as much as 6 % per year over the last decade.
In particular, it will be essential to take full account of the costs
of environmental damage in investment decisions, including by
reducing energy subsidies and introducing appropriate taxes
and charges, for example for energy consumption and/or trans-
port use.

The substantial investments in energy and transport infrastruc-
ture that are needed in most of the new Member States must
be focussed on reducing the environmental impacts of trans-
port, energy use and production as well as improving energy
efficiency. Such investments will be crucial as energy intensities
exceed those of current Member States by a factor of almost 4,
see Table 3, in spite of improvements of as much as 6 % per
year over the last decade. In particular, it will be essential to
take full account of the costs of environmental damage in
investment decisions,
including by reducing energy subsidies
for non-renewable forms of energy and introducing appropri-
ate taxes and charges for such energy resources, for example
for energy consumption and/or transport use. Current Member
States must dramatically increase their efforts to fulfil the
‘Kyoto commitments’ of reducing greenhouse gas emissions
by 8 % by 2010.

Instructs its President to forward this resolution to the Council and Commission, and the govern-

6.
ments and parliaments of the Member States.