European Parliament members backs structural reforms to boost economy

The European Parliament (EP) backed the European Commission's (EC) approach to economic growth and job creation on Wednesday.

MEPs were discussing changes to the 'European Semester', an annual process in which the EC issues guidance to EU member states on how they should be reforming their economies.

In a debate lasting more than two hours on member states' economic policies, MEPs voted by large majorities in favour of three separate resolutions endorsing the EC's 'three-pillar' approach, namely, investment, structural reforms and 'growth-friendly' fiscal consolidation.

"Reforms and fiscal consolidation are the right way to reduce unemployment and poverty in the member states most affected by the financial crisis, and help the euro area to return to sustainable growth," said Polish centre-right MEP Dariusz Rosati, who steered the EC's Annual Growth Survey report through Parliament.

EC vice-president Valdis Dombrovskis added that while the Commission expects all 28 EU states to post positive economic growth this year, there were still concerns about the lack of job creation.

In a resolution on the growth survey, MEPs set out recommendations for making Europe more competitive and better able to withstand future crises by starting to integrate capital markets, fighting tax fraud and evasion, completing the EU's internal energy market and making labour markets more efficient.

A resolution on single market governance, drafted by Hungarian MEP Ildiko Gall-Pelcz for the Internal Market Committee, saw MEPs reiterate their call to integrate further the single market in the European Semester talks and urge member states to enable the EC to present country-specific recommendations (CSRs) in national parliaments before they are approved by the EU Council of Ministers.

On CSRs, Rosati said structural reforms across the EU were a "necessary response" to lax budgetary management in some member states before the crisis. He added that the need for changes could be seen in Ireland where reforms were already starting to bear fruit.

MEPs previously debated the implementation of CSRs in 2013, but a subsequent EC report found only 9 percent of relevant reform recommendations for that year had been implemented in full, and "little or no progress" was made on 45 percent of them.

During the debate a number of MEPs called for an end to austerity and greater state spending as a way out of the EU's sluggish economic situation.

However, Roszati reminded the EP that austerity had been a necessary adjustment to excessive spending in the years before the financial crisis. "All those countries that had irresponsible budgetary policies had to make some cuts, while those who had been prudent in their budgetary policies have not had to resort austerity," he said.

He accepted that there were some social costs in implementing reforms, but added: "We have to remember that if wages were growing much faster than productivity before the crisis, we should not be surprised if those wages had to come down to stay in line with productivity." Enditem