During the Covid pandemic, the S&Ds were the leaders in the Parliament on supporting the strong crisis response with NextGenerationEU. The main tool, the Recovery and Resilience Facility, is the most ambitious EU effort ever to face a crisis and based on unprecedented solidarity. Financed by common European debt, the facility provides grants and loans to the member states proportionate to the needs of each country. It succeeded in both helping member states to manoeuvre through the crisis and laying the foundations for reforms and investments in key European priorities such as climate and digital.
The S&D Group called for a European Unemployment Benefit Scheme, which led to the European Commission proposing the SURE programme to finance temporary national unemployment schemes with loans.
We also campaigned strongly on the revised economic governance framework. The Commission proposals reflect a clear concern for making EU fiscal rules more flexible and allowing member states to combine fiscal adjustments with permanently higher levels of public investment, especially where it is needed for a successful and just transition.
The report on the European Semester for economic policy coordination 2023 – supported by a huge majority in the European Parliament – clearly states that fighting inflation requires not only monetary policy measures, but also an activist economic policy, including fiscal measures. On the initiative of the S&D Group, it therefore advocated a progressive economic policy that aims to achieve economic stability and the protection of the vulnerable.
The long-standing fight of the S&Ds to shift the general focus of economic policy coordination in the European Semester towards a sustainable and inclusive economic model was finally addressed in 2020 when the Commission declared the European Green Deal to be its new growth strategy – moving away from the dogma that economic growth is an end in itself.
The S&Ds have long been at the forefront of reforming the European economic governance framework so that it works for people and the planet. We have always fought against the austerity policies imposed by the conservatives since the financial crisis in 2008 and have called for a fair and inclusive economic structure and coordinated measures at EU level to support the just transition and well-being for all.
The criteria for assessing member states’ performance cannot rest solely on macroeconomic benchmarks, but must also consider social, environmental, geographical and demographic challenges, and the economic starting positions of member states. Therefore, the S&Ds call for the transformation of the annual budgetary coordination procedure – the ‘European Semester’ – into a tool to boost socially and environmentally sustainable investments and inclusive growth.
The principles of the European Pillar of Social Rights (EPSR) and the UN Sustainable Development Goals (SDGs) must be the compass guiding reforms and investments in the future framework. Social rights and environmental targets should have the same importance as macroeconomic targets, with the goal of improving the well-being of people in the EU.
We need to further strengthen the social dimension of the European Semester to ensure that fiscal adjustment programmes do not have negative social consequences and that they allow for the necessary social investment to ensure robust social welfare systems. Mandatory social targets should be adopted to ensure the implementation of the EPSR principles.
The S&D Group calls for an EU permanent fiscal capacity to allow member states to invest in our future and protect citizens in crisis. It should provide macroeconomic stabilisation at EU level, to increase crisis preparedness and set an ambitious public investment agenda to support member states and tackle current and future challenges. We need to ensure that member states are able to deliver the huge investments needed to make our societies and economies more resilient – beyond 2026 and the end of the Recovery and Resilience Facility (a European fund set up to provide member states with the necessary stimulus for investment after Covid-19). Investment in key areas has to be guaranteed, without cutting budgetary resources in other important fields.
Responsible fiscal policies should not only focus on the public expenditure but also on the public revenue that is essential for the sustainability of member states’ public finances. It is therefore necessary to have greater European coordination on the level of taxes and duties in member states, and on fighting tax evasion, fraud and money-laundering.
The European Parliament’s legislative powers have to be extended to the control of the Commission’s decisions and to all areas of the European Semester. The Parliament’s voice is especially crucial in the decision-making on economic policy priorities for the EU and on the country-specific recommendations (the individual recommendations for each member state in the context of the European Semester).
