As political leaders met for the June 28-29, 2012 European Council (see Folio 61), BusinessEurope and UEAPME both released their own proposals to “rescue Europe.” There are of course differences between the two action plans, but both highlight the need to restore confidence.
BusinessEurope calls for a “recovery plan”
BusinessEurope’s action plan features five points. The immediate priority is to save the euro. This rescue mission requires strengthening economic governance by widening the scope of action of the ESM to recapitalize banks, letting the European Central Bank play its role as “lender of last resort” and creating Eurobonds.
The second step consists of improving public finances. Following German and Irish examples, the priority must be given to consolidating national budgets while at the same time reforming job markets (fewer taxes and greater flexibility for dismissal rules).
The third emergency measure is to promote private investment. BusinessEurope has come out in favor of “project bonds” and increasing European Investment Bank (EIB) capital, but is nonetheless hostile to the notion of a financial transaction tax, which would “reduce the attractiveness of the EU.”
“Unleash the single market.” Such is the slogan used to illustrate the fourth point. Europe is not making the most of the single market’s potential. Action is thus needed to create a true digital single market and a unitary patent system, as well as to facilitate worker mobility within the European Union.
The final measure consists of expanding EU external trade. First and foremost, trade negotiations must be launched with the United States, covering trade in goods and services, investment, and protection of intellectual property rights. Similar “ambitious” trade deals with India, Mercosur and Canada are indispensable as well.
For UEAPME, growth and discipline go hand in hand
The European Association of Craft, Small and Medium-Sized Enterprises (UEAPME) believes that European SMEs need the “Growth Pact” adopted at the June 28-29 European Council. The organization emphasizes the notion that economic growth and deficit reduction are “two sides of the same coin.”
UEAPME considers that the budget consolidation and structural reform measures implemented by Member States will not be sufficient to bring the economy back to sustainable growth levels or stabilize financial markets. It advocates an action plan based on four pillars: – implementation of the Fiscal Compact signed by 25 Member States, which must aim first and foremost to restore market confidence by reducing the “fiscal burden created by high yields on public debts;” – pursuit of structural reforms as a precondition for fiscal consolidation; – adoption of growth-supporting measures is paramount; – establishment of a reliable governance structure to ensure implementation of the previous three policies.