European Parliament resolution on the European economic situation — preparatory report on the Broad Economic Policy Guidelines (2004/2269(INI))
Date: 2005-02-22
Institutions: European Parliament
Subjects: EU Member State, EU employment policy, budget policy, economic policy, labour market, macroeconomics, public finance

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Tuesday 22 February 2005

COMMISSION WORKING PAPER
ON A COMMUNITY FRAMEWORK

MODIFICATIONS BY PARLIAMENT

Modification 24
Point 24

24.
This framework will apply as of its publication in the
Official Journal of the European Union. Its validity will end on
31 December 2007. The Commission may, after consulting the
Member States, amend this framework before 31 December
2007 for important reasons linked to the development of the
common market.

24.
This framework will apply as of its publication in the
Official Journal of the European Union. Its term of validity will
end four years after its entry into force. The Commission may,
after consulting the Member States, amend this framework
before its date of expiry for important reasons linked to the
development of
the common market. The renewal of the
framework shall be subject to a review including an extensive
impact assessment based on factual
information and the
results of wide consultations conducted by the Commission
on the basis of data provided by the Member States. The rel-
evant information shall be made available to the European
Parliament.

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

30.
ments and parliaments of the Member States.

P6_TA(2005)0034

Broad economic guidelines

European Parliament resolution on the European economic situation — preparatory report on the
Broad Economic Policy Guidelines (2004/2269(INI))

The European Parliament,

— having regard to the Commission recommendation of 24 April 2003 on the Broad Guidelines of the
Economic Policies of the Member States and the Community (for the 2003-2005 period) (COM(2003)
0170),

— having regard to the Commission recommendation of 7 April 2004 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)0238),

— having regard to the Commission's autumn 2004 economic forecasts for the eurozone and the Euro-

pean Union (2004-2006),

— having regard to the Communication of 2 February 2005 from the Commission to the Spring
‘Working together for growth and jobs — a new start for the Lisbon strategy’

European Council
(COM(2005)0024),

— having regard to the Presidency Conclusions of the Lisbon European Council of 23 and 24 March
2000, the Göteborg European Council of 15 and 16 June 2001 and the Barcelona European Council
of 15 and 16 March 2002,

— having regard to the Presidency Conclusions of the Brussels European Councils of 20 and 21 March

2003, 16 and 17 October 2003, 25 and 26 March 2004 and 4 and 5 November 2004,

— having regard to the report entitled ‘Facing the Challenge’ by the High-Level Group chaired by Mr Wim

Kok,

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Tuesday 22 February 2005

— having regard to the Communication from the Commission of 11 November 2003 entitled ‘A European
Initiative for Growth — Investing in Networks and Knowledge for Growth and Jobs — Final Report to
the European Council’ (COM(2003)0690),

— having regard to the Opinion of the European Economic and Social Committee (EESC) of 30 October
2003 on the ‘Assessment of the experiences gathered by the EESC to evaluate the economic, social and
employment impact of structural reforms in the EU’ (1),

— having regard to its resolution on 12 March 2003 on the state of the European economy — prepara-
tory report with a view to the Commission recommendation on the Broad Economic Policy Guide-
lines (2), its resolution 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) (3) and
its resolution of 23 October 2003 on the outcome of the Brussels European Council on 16 and
17 October 2003 (4),

— having regard to its resolution of 26 February 2004 on the situation of the European economy —
preparatory report on the Broad Economic Policy Guidelines (5) and its resolution of 22 April 2004
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) (6),

— having regard to its resolution of 26 February 2004 on the preparation of the spring summit 2004 (7),

— having regard to Article 99, paragraph 2, of the EC Treaty,

— having regard to Rule 45 of its Rules of Procedure,

— having regard to the report of its Committee on Economic and Monetary Affairs (A6-0026/2005),

A. whereas growth in the eurozone and the 25-Member European Union is unable sustainably to achieve
its potential and remains weak; whereas household consumption is still faltering and the economic
outlook for 2005 and 2006 remains poor, contributing to a continuing high level of unemployment
which will decline only slowly; whereas, despite the lowest interest rates since the Second World War,
there is little willingness to invest and no change is foreseeable, at least in the short term; whereas the
structural reforms which are, after all, universally regarded as necessary have not been carried out in all
the Member States with the requisite care, and whereas reforms at Community level are making only
slow progress,

B. whereas the Lisbon Strategy requires the mobilisation of all existing instruments, in particular the Broad

Economic Policy Guidelines (BEPGs) and the appropriate use of the financial perspective,

C. whereas the pursuit of sustainable growth must be based on social, employment and environmental
policies which take account of their responsibility towards future generations and of the need to streng-
then social cohesion; whereas social cohesion can only be strengthened if an appropriate level of social
protection and a high level of employment are maintained, in accordance with the objectives set by the
Treaty, and the sustainability of pension systems can be assured only if the competitiveness of the
European economy is improved so that it generates growth, investment and new businesses,

D. whereas the excessive budget deficits in some Member States are a symptom of a lack of structural
reforms and whereas there is a positive correlation between growth and budgetary discipline; whereas
the low interest rates which such discipline makes possible generate the essential confidence of econ-
omic operators in long-term price stability, and thus create the necessary basis for growth and employ-
ment,

(1) OJ C 32, 5.2.2004, p. 103.
(2) OJ C 61 E, 10.3.2004, p. 294.
(3) OJ C 67 E, 17.3.2004, p. 295.
(4) OJ C 82 E, 1.4.2004, p. 592.
(5) OJ C 98 E, 23.4.2004, p. 162.
(6) Texts Adopted, P5_TA(2004)0378.
(7) OJ C 98 E, 23.4.2004, p. 156.

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E. whereas the all-time low interest rates have not restored businesses' confidence in the expediency of

investment,

1.
Regrets the substantial accumulated delays in implementing the Lisbon Strategy, particularly with
regard to structural reforms and the reform of public finances in a number of Member States, which are
partly attributable to the multiplicity of objectives; therefore welcomes the definition of the key priorities by
the Group chaired by Mr Wim Kok; calls on the Member States to be pro-active in implementing the key
priorities; encourages the Commission to focus its efforts on these areas; takes the view that the general
guidelines set out in the 2003-2005 BEPGs have not been incorporated into the economic policies of the
Member States; calls on the Commission to analyse the best performance of Member States and to learn
lessons therefrom; recommends giving greater weight to growth and job creation by means of increased
competition and competitiveness within the Lisbon Strategy;

2.
Recalls that financial stability, the reform of public finances and the low interest rates brought about
by the stability policy of the European Central Bank are the explicit pillars of the Lisbon Strategy; shares the
view expressed by the Economic Policy Committee in its ‘Annual Report on Structural Reforms 2005’ that a
macroeconomic framework supportive of stability and growth is indispensable and that Governments will
reap the full benefits of structural reforms in terms of growth and employment only in an appropriate
macroeconomic environment;

3.
Recommends a simplification and improvement in the coordination of the various instruments avail-
able to the European Union; recommends a reduction in the number of reports and programmes both at
Community and at national level, with the aim of securing greater commitment by Member States; asks the
Commission to step up its efforts to complete the internal market in sectors where there are still protec-
tionist barriers and trade restrictions; also asks the Commission not to slacken its endeavours to secure fair
competition in all sectors;

4.
Supports wholeheartedly the independence of the European Central Bank and considers that any
influence on monetary policy by the bodies determining economic policies would be contrary to the Treaty,
since it would put an end to that independence; proposes the harmonisation of the economic hypotheses
used as a basis for drawing up the budgets and of the budgetary timetables of the Member States of the
eurozone, taking into account the timetable for drawing up the BEPGs and the employment guidelines;

5.
Reiterates its demand that labour market reforms be implemented in such a way as to strike a balance
between flexibility and security; recalls its support for the implementation of policies aimed at encouraging
a spirit of enterprise and initiative, innovation and industrial competitiveness and, in this context, its sup-
port for the objectives of administrative simplification and the removal of obstacles associated with com-
pany taxation by implementing the ‘Monti package’ of fiscal harmonisation measures; stresses finally that
the development of quality jobs will be accompanied by an improvement in labour productivity in Europe;

6.
Considers that increased productivity will not in itself suffice to generate the growth needed to cover
all economic and social needs and to alleviate the consequences of demographic change, particularly with
regard to pension and health systems, and that the implementation of structural reforms cannot be a sub-
stitute for macroeconomic policy;

7.
Is alarmed at the persistence of high unemployment and the poor prospects for increasing employ-
ment, both in the eurozone and in the Union as a whole; urges that a special effort be made to provide
advice and retraining for all those unemployed for more than six months; insists that small and medium-
sized undertakings (SMEs) have a key role to play in job creation and is alarmed at the high number of SME
bankruptcies in 2004, while at the same time deploring the fact that, unlike larger enterprises, SMEs are not
in a position to take full advantage of the favourable financial conditions of the last few years;

8.
Stresses the need to create an environment which promotes a spirit of enterprise and a risk-taking
culture which encourages the creation of new businesses by easing the administrative burden on SMEs, by
simplifying the regulatory environment, by reducing the general level of taxation in the European Union and
by improving access for SMEs to sources of finance, particularly risk capital; proposes reforms designed to

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increase opportunities for SMEs; draws attention to the decisive role that micro-loans may play in assisting
the creation of businesses and jobs; calls for a detailed examination of such instruments, and for them to be
taken into account and promoted at Community level;

Tuesday 22 February 2005

9.
Reiterates its desire to see the Union gradually achieve self-sufficiency in energy by promoting renew-
able sources of energy and encouraging the development of alternatives to oil, such as hydrogen; notes that
while the rise in oil prices in 2004 should not cause any lasting rise in inflation, it will affect confidence, in
particular by directly reducing the purchasing power of households and maintaining uncertainty about
investment decisions at the very time when a slowdown in external demand is expected; considers that the
efficiency of traditional forms of energy, especially those which do not pose a risk to the objectives of the
Kyoto Protocol, must be increased;

10.
Notes that, in all developed countries, households are spending less on ordinary consumer goods and
manufactured goods — even cheaper and better quality goods — and more on health, communication and
leisure, and notes also the considerable importance of the services sector in Europe's GDP and in terms of
employment; considers, therefore, that the slowdown in productivity in this sector is a major factor respon-
sible for sluggish growth in Europe; urges therefore that,
investment and innovation in
information and communications technologies, which play a key role in boosting productivity, should be
promoted; recommends opening up this sector to a greater extent to private operators and encouraging the
spirit of enterprise in it;

in this sector,

11.
Calls on the Member States firmly to support forward-looking investments, by promoting investment
and emulation in research, including basic research, and development, high technology, environmentally-
friendly technologies and trans-European infrastructures and networks and education and lifelong learning;
recommends increasing public funding for science and research; highlights the importance of a climate
which is conducive to the promotion of research and development and of a better integration of product
markets and a more positive attitude of the financial markets towards riskier forms of investment; takes the
view that investment in social services, in particular in childcare, is essential if there is to be genuine equality
between men and women and if female employment is to increase; draws the Commission's attention to the
under-exploitation of many latent skilled jobs in the services sector — which are all the more valuable
because they are essentially local — in both the private sector and the public sector; stresses the need to
invest in and promote jobs in services, in particular educational services, local social services, childcare, care
for the elderly and help in the home; believes that account should be taken of the ageing of the population,
since this will necessarily lead to the working population itself ageing; notes that older workers often have
career problems and are sometimes regarded as too old and too expensive to be promoted or trained;
considers accordingly that it is essential to provide them with tailor-made initiatives such as counselling,
advice and specific training systems;

12.
Notes that intra-Community trade accounts for the bulk of the external trade of the Member States
of the Union, and concludes that the completion of the internal market is necessary in order to contribute
to economic growth and thus the social development of the Union; notes, moreover, that most trade with
third countries is conducted with developed countries where qualifications and salary levels are analogous to
those of the Member States; notes, however, that a growing number of competitors, including China, India
and Brazil, are often managing to supply goods and services of the same quality at more competitive prices;

13.
Considers that the growth of free and fair international trade, founded on equal opportunities, on the
basis of the Doha commitments will both contribute to the development of poor countries and create new
markets for developed countries, and that it is only through growth that developing countries will be able to
increase the income of their population and achieve higher social and environmental standards; calls on the
Commission to take these considerations into account in future BEPGs;

14.
Reiterates its wish to see both national parliaments and the European Parliament more closely
involved in discussions on the BEPGs; considers that this would result in greater democratic accountability
and, above all, mean that Member States would embrace them more wholeheartedly and therefore be more
committed to their implementation;

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15.
Considers that the management of economic policy requires reliable and comparable statistics and
calls upon the Commission to increase the means available to Eurostat to carry out its mission of gathering
and monitoring the statistics of Member States and, within the framework of the OECD and other relevant
international organisations, to press for an improvement in the reliability and comparability of statistics at
international level; believes that the administrative burden and the costs involved in collecting statistics must
not hamper the competitiveness of businesses; calls for the focus to be on key indicators for measuring the
spirit of enterprise;

Instructs its President to forward this resolution to the Council, the Commission, the European
16.
Economic and Social Committee, the governments and parliaments of the Member States and the social
partners.

P6_TA(2005)0035

Public finances in EMU — 2004

European Parliament resolution on Public finances in EMU — 2004 (2004/2268(INI))

The European Parliament,

— having regard to the Commission communication of 24 June 2004 to the Council and the European

Parliament on Public finances in EMU — 2004 (COM(2004)0425),

— having regard to the Commission communication of 3 September 2004 to the Council and the Euro-
pean Parliament on strengthening economic governance and clarifying the implementation of the Sta-
bility and Growth Pact (COM(2004)0581),

— having regard to the Commission communication of 27 November 2002 to the Council and the Euro-

pean Parliament on strengthening the coordination of budgetary policies (COM(2002)0668),

— having regard to the Commission communication of 27 November 2002 to the Council and the Euro-
pean Parliament on the needs and the means to upgrade the quality of budgetary statistics (COM(2002)
0670),

— having regard to the Presidency Conclusions of the Lisbon European Council of 23 and 24 March 2000
and of the Gothenburg European Council of 15 and 16 June 2001, with particular reference to the
agreed strategy on economic growth, full employment, sustainable development and social cohesion,

— having regard to the Presidency Conclusions of the Amsterdam European Council of 16 and 17 June
1997 on the Stability and Growth Pact, to Council Regulation (EC) No 1466/97 of 7 July 1997 on the
strengthening of the surveillance of budgetary positions and the surveillance and coordination of econ-
omic policies (1), and to the code of conduct on the content and format of the stability and convergence
programmes adopted by the Ecofin Council of 10 July 2001,

— having regard to the Statement by the Ecofin Council of 13 September 2004 on the Stability and

Growth Pact,

— having regard to the judgment of the Court of Justice of the European Communities of 13 July 2004 (2)

relating to certain measures taken by the Ecofin Council on 25 November 2003,

(1) OJ L 209, 2.8.1997, p. 1.
(2) Case C-27/04, Commission v. Council.