ETUCE comments on outcomes of the public consultation on the Economic Governance Review


On 28 March, the European Commission issued the final report on the summary of responses to the Online public consultation on the review of the EU economic governance framework. The consultation was launched in the frame of the Economic Governance Review to update the package of legislative measures approved during the 2011 economic crisis: after the temporary relief due to the pandemic, this is the first concrete opportunity to radically change the fiscal rules based on austerity. ETUCE submitted its contribution, along with 224 other respondents (44 Trade Unions). This, together with the Communication on fiscal policy guidance for 2023, will inform the design of the new Economic Governance for a five-year period.

The Commissions sets out five key principles for fiscal recommendations for the next national budgetary plans: (a) policy coordination and a consistent policy mix, (b) debt sustainability ensured through a gradual and high-quality fiscal adjustment, (c) sustainable investment to be promoted, (d) medium-term approach to fiscal adjustment, (e) differentiated fiscal strategies.

ETUCE participated in the consultation highlighting the struggle for making Education the heart of the recovery, fostering skills, fairness, and social cohesion according to the principles of the European Pillar of Social Rights, democratising the European Semester. ETUCE affirmed a strong opposition to the ideological drive towards privatisation and marketisation, resulting in increased discrimination, social fragmentation, widening inequality. ETUCE advocated for incentives to public investments and for fiscal rules that ensure full employment of teachers and other education personnel as well as decent salaries and working conditions, increasing the EU’s own resources through a progressive reform of taxation.

ETUCE welcomes that the European Commission acknowledges the request for a gradual path of debt reduction through medium-term Country-specific targets, replacing numerical fiscal rules with qualitative standards and effective counter-cyclical policies, emphasising that the target for the reduction in the debt ratio should be realistic to avoid negative effects on the economy.

About half of respondents to the consultation underscored the need to equip the EU with a central permanent fiscal stabilisation capacity to smooth the economic cycle and increase its resilience through grants financed by EU borrowing, leading to common safe assets. While respondents affiliated with business associations were more inclined to call for stronger tools for enforcement, ETUCE supported a simplification of the reporting mechanism, encompassing the European Pillar of Social Rights, macroeconomic and social imbalances, climate emergency and gender equality.

ETUCE joined two-fifths of respondents advocating for inclusive policy dialogue, starting from a binding rule for more structured Social Dialogues as irreplaceable tools of balanced crisis management. The Belgian-Spanish proposal for Social Imbalance Procedure advanced in the Employment, Social Affairs, Health and Consumers Affairs Council goes in this direction and ETUCE regrets that this specific legislative proposal was not even mentioned in the report.

Four out of ten respondents (trade unions, business associations, public sector, academics) called for further interactions between the Stability and Growth Pact and the Macroeconomic Imbalance Procedures (MIP), including environmental, climate and social goals in MIP surveillance.

The European Commission will provide orientations on the economic governance framework in due time for 2023.