October 29, 2008
Europe will pass through a difficult period during the coming 12-24 months. Unemployment will be up, as economic growth will come to a grinding halt. This is bound to lead to social tensions that cannot be in Europe’s common interest.
It is therefore time to act in view of minimising the negative impact of the global downswing. No individual member state is any longer capable of taking effective action. The EU has to act in unison and demonstrate its citizens that it is capable of protecting their jobs more effectively than individual member states.
The EU has to act without delay. Speed is of the essence in view of the long lead time between a political decision and its impact on the labour market.
The EU finance ministers should rapidly waive the 3 percent limit for budget deficits in 2009 and 2010 for any member state participating in an EU-wide employment programme.
The Commission should urgently define the broad outlines of such a programme, leaving the details to member states to elaborate. Each member state should rapidly submit a draft programme to the Commission and member states for peer review.
The programme should aim at stabilising employment. This should not happen through incentives for boosting consumption, whether cars or household appliances. This would be waste of scarce budget resources. It seems more effective to encourage overdue investments in European housing and infrastructure. The European building stock needs an urgent energetic overhaul. Why not combine the strategic goal of reducing C02 emissions from buildings, by some 30 percent, with the need to create additional jobs in the coming economic slump, and engage in a vast programme of upgrading private and public buildings across the EU?
The EU could support the various national programmes through long-tem EIB loans and, why not, setting aside substantial chunks of the structural funds for the energetic improvement of public buildings, in particular in the new member states.