The European Trade Union Institute (ETUI) has some sobering statistics on the state of Europe for working people, and some solid proposals on how to deal with issues.
The European Commission’s autumn forecast from November 2016 (European Commission
2016a) predicts GDP growth slowing to 1.5% in 2017, with employment
increasing by only 0.9%. These modest forecasts reflect concerns over possible economic
uncertainties elsewhere in the world and over the UK’s preparations to leave
the EU. The European Commission has been worried enough to argue for the benefits
of a slightly expansionary fiscal policy across the euro area countries, albeit with no
means to ensure its implementation. This, it hopes, will supplement the effects of its
investment plan and the ‘structural reforms’ implemented in recent years in a number
of countries. Unfortunately, these measures will bring very few benefits.
The key to sustained recovery should be fiscal policy, both to stimulate internal
demand and to create the basis for a more serious investment plan.
The European Commission’s rhetoric and accompanying policy measures reflect neither the depth of the problems nor the extent of policy change required to tackle them. There has been a verbal recognition that past policies have failed and that a big change is needed if GDP and employment growth are to be restored and maintained, but this has led only to half-hearted and uncoordinated responses. The key to supporting sustained growth is a switch to expansionary policies, raising demand through higher public spending and higher pay