Former Prime Minister Alfred Sant said that Europe cannot leave people with the impression that instead of managing markets, it is being managed by markets. Ultimately, the verdict about what we are doing to boost growth and jobs in the EU countries is not given by the markets, but by voters. Dr. Sant, who is the shadow rapporteur of the S&D, was addressing the discussion on the ‘Country-specific recommendations’ in a joint meeting of the Economic and Monetary Affairs committee and Employment and Social Affairs committee in Brussels.
Dr. Sant said that beyond the concerns about immigration, recent election results in Italy, Spain, France and Denmark show voters are less than impressed by Europe’s economic outturn. ‘Unfortunately, our assessments do not focus enough on the divergences that are increasing. Many citizens are experiencing them in their daily lives: divergences between regions within the Union, such as north and south. Precarious work practices such as low pay, job insecurity, lack of access to social security and training are still a reality in many Member States. Sometimes even in these country specific recommendations, we seem to be confusing economic policy coordination and convergence, with convergence in terms of economic performance. Policy convergence as of now may be premature and harmful given the existing divergences.’
Dr. Sant said that the past and present reliance on so-called structural reforms to bring about so-called flexibility in labour markets has had serious social consequences. Beyond the effects of recession, it has cut on living standards. It has injected insecurity in to the lives of millions, young and old. It has failed to reduce unemployment significantly, not least because it has helped to depress demand.
Dr. Sant congratulated the Commission for having streamlined the semester process and refocused the country specific recommendations, not least by reducing their number and concentrating their thrust. ‘In its report, the Commission starts by noting that "growth is returning to the EU" but says that developments leading to it are largely short term. This reminds me of the IMF's verdict regarding how competitiveness is being regained in Europe. It is being done mainly through a reduction in unit labour costs that is greatly dependent on shedding of labour. Indeed, we all are aware of how fragile the current recovery remain.’
During the meeting various MEPs called on the European Commission to pay more attention to national specificities and possible spillover effects on other countries - and the Eurozone as a whole - when deciding on the Country-specific recommendations. They also advocated stepping up the involvement of national parliaments and social partners when deciding on structural reforms so as to strengthen the sense of national ownership. The recommendations will need to be endorsed at this week's European Council summit of EU leaders and formally approved by economy and finance ministers on 14 July.