The Growth & Jobs Pact: A Lot of Talking, A Little Implementation
Zhaneta Kuyumdzhieva, 13 November 2012
At the autumn EU summit, alongside the solution of the big issues related to the future of the euro area and the EU at large, a little unnoticed passed the participation of European Commission President Jose Manuel Barroso who presented to the EU leaders a report about the implementation of the measures, agreed during the summer European Council Growth and Jobs Pact, for which very much insisted French President Francois Hollande as a counterbalance to the austerity measures.
At first reading, the report on the implementation of the Pact leaves an odd feeling of tension. Probably because a quite amateur and superficial content analysis would highlight the usage of rhetoric that reveals urgency, acceleration, enhancement, etc. In the document, the Commission as if says: OK, we have the proposals, we have the means. And because the planned actions in this Pact suggest coordinated efforts at national level, at eurozone level and at EU level, the time for implementation and political will of the government have become the most risky resource. This is why, quite unequivocally and even with nice technical methods (bold over darker background), the commission invites:
1. The European Council to confirm the urgency of the implementation of every aspect of the Growth and Jobs Pact;
2. The member states to pursue the implementation of reforms with courage and determination and in accordance with the country-specific recommendations from June 2012;
3. The European Parliament and the Council to accelerate the adoption of those proposals that boost growth.
According to the report, there are "encouraging progress in several aspects" and "disappointing results in others". One of the successes is the increase of the capital of the European Investment Bank (EIB), as 90% of the resources will be unleashed in March 2013 at the latest. Thus, the EIB lending programme for 2013 will increase significantly the funding possibilities.
One of the ideas, the aim of which is to stimulate investments in the EU, is project bonds, presented for the first time in the European Commission proposal for the budget framework for the next 7-year period. This is one of the fastest adopted proposals in the EU. The first project bonds will be launched in the upcoming months. The expected up to the date of the report (October 18-19) signing of the agreement between the Commission and the EIB is already a fact. It happened on November 7th in Brussels and on this occasion Olli Rehn, vice president of the Commission and monetary and economic affairs commissioner, said: "It is an innovative means of unlocking private investment in infrastructure, enhancing competitiveness and helping to boost growth and job creation. Every euro channelled from the EU budget into the Project Bond Initiative could generate about 20 euros of infrastructure investment, underlining the role of the EU budget as an engine for growth. I am looking forward to the first projects and count on active participation by the stakeholders".
The public institutions that want their project to benefit from the potential of project bonds will have to include that funding option in their tender documentation. Yet the pilot phase of the initiative, totalling 230 mn euros (100 mn euros approved in 2012 with a potential to generate investments worth 1.5-2 bn euros and additionally 130 mn in 2013) from the EU budget, will be dedicated to stimulating capital markets contribution worth 4 bn euros to infrastructure in transport, energy and communication sector.
This month is expected the presentation of the Early Alert Mechanism for 2013, together with the Annual Growth Survey of the EU. The first report under that mechanism was announced earlier this year and was later supplemented by a comprehensive analysis of the condition of 12 countries under the imbalances procedure, among which Bulgaria as well. The problems outlined then are analysed in details in the country-specific recommendations from June this year.
"An agreement is possible by the end of 2012", the European Commission believes on the issue of unitary patent, venture capital funds, social investment funds, simplification of accounting directives, alternative dispute resolution and the TEN-E guidelines (the trans-European energy networks). Ambitious but feasible deadlines are set for the completion of the single digital market and the internal market in the area of energy. In a short term, the Commission will commit to present an individual plan for every member state based upon the recently adopted energy efficiency directives. Similar will be the function of the upcoming (by the end of the year) review of the initiatives for the single digital economy, which will bring clarity what barriers are still hampering their full implementation and what actions need to be undertaken.
Additional efforts will be needed for the successful implementation of the Services Directive, before which there still are illegal barriers, related to company structures and capital, as well as to ensuring access to regulated professions, the report of the Commission says.
"The progress framework is in place, the key now is implementation", is the Commission opinion in terms of jobs creation and sustainable labour market. The Jobs Plan that presented a number of possible actions to improve employment of European citizens, as well as work on the reform of the EURES portal to enhance its potential to turn into an effective tool for human resources selection and finding of jobs, will be supplemented soon by a communication on the rethinking of education and the package for youth employment. The Commission calls for acceleration of work on transferability of pension rights and on its proposal for the rights of commissioned workers.