Maltese MEP Alfred Sant told the Committee on Economic and Monetary Affairs (ECON) of the European Parliament that their aim should be that of convincing more and more European citizens that what is of concern to them, is of concern to ECON. Dr Sant tabled a report on the recommendations by the European Commission to EU member states as rapporteur on behalf of S&D on the European Semester Cycle with the title "European Semester for economic policy coordination: implementation of 2016 priorities" which he prepared during the last weeks. This was the first exchange of views on the report at committee level. The report will be finalised in September after further discussions with representatives of the other political groups who will present their amendments and will be voted for adoption on 11 October 2016.
Dr Sant emphasised that the report should concentrate mostly on the need to increase public and private investments in Europe, encouraging measures that can increase investments. “A major reason why economic growth in Europe has lagged behind expectations is that investment has lagged, and still lags.” Acknowleding that disagreement prevails about why this has happened, the S&D rapporteur said, “It is in the interests of our constituents to seeing the investment situation improve without in any way abandoning what we believe in.”
Dr Sant said there is the argument that within the eurozone, by virtue of the very existence of the euro, structural imbalances are such that they by definition, necessarily inhibit investment and eventually consumption. “The point remains: in the past, investment in this suboptimal context was stronger than it is now. So, could we at least try to reach those past levels, since experience shows they are reachable?”
Another point at issue is public investment, said the Maltese MEP, which too has lagged. Public investment in the EU is still well below the levels reached by the US, which masks its public investment under defence, Research and Development (R&D) and other appropriations at both federal and state levels. “Should this not be a matter of concern?” asked Dr Sant who said that the investment most needed is private. But arguably, private investment rides on the back of public investment. The less public investment there is, the less chances there will be of enough business confidence to generate greater volumes of private investment.
Dr Sant said uncertainties prevail regarding pan-European economic policies, such as on energy, the environment, banking union within the eurozone, not to mention immigration. Beyond that, there are of course political uncertainties, heightened by Brexit, but certainly arising also from other political issues still pending.
Another point at issue vis à vis investment, relates to small and medium industries. “Up to not so long ago, we were told that some of the bigger problems smes were facing when setting out new projects, arose from the rigidity that banks applied to their requests for loans and other facilities. Alternative explanations now claim that the real problem is reduced demand which motivates nobody to invest in new ventures, least of all smes. My own personal feedback from smes is that the problem is still the rigidity of bank credit, which in Europe, no matter what we say and wish about a capital markets union, remains the most important avenue to project financing available to smes.”
Dr Sant told ECON that MEPs from all political groups should try to table meaningful proposals on investment as a way forward based on the Country Specific Recommendations (CSRs) that the Commission has put together. “Which is why we’ll be looking forward to the amendments that are being made. I look forward too to a fruitful discussion on the matter at hand with the shadow rapporteurs,” the Maltese MEP told shadow rapporteurs of other political groups.