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9 March 2017

Benchmarking working Europe 2017: Faltering recovery under threat again

Benchmarking working Europe 2017

Economic forecasts for Europe are looking a little more optimistic, but the measures put in place by the EU to tackle stagnant economic growth and huge European unemployment (deregulatory structural reforms, the Juncker investment plan and the European Central Bank’s quantitative easing) are not satisfactory. This is the conclusion of the first chapter of the joint ETUI/ETUC’s annual analysis of the state of ‘working Europe’ which will be officially launched on Monday 13 March in Brussels.

As usual, the Benchmarking working Europe’ report analyses the European Union’s policies in the areas of macroeconomic policies, labour market and social developments, wages and collective bargaining, and social dialogue and workers’ participation with the help of statistical and comparative data taken from institutional sources.

The subtitle of this year’s publication is ‘overcoming cleavages across the EU?’ raising questions about the effectiveness of current policies to deal with the economic and social divergences within the European Union.

Here are the main findings of the first chapter on the EU’s macroeconomic policies (read the full PDF chapter for more analysis and all the statistical indicators):

  • The economic indicators point to a slight increase in GDP that sets it, in 2016, at just 4.8% above the 2008 peak level. A major driver over this period has been export growth, leaving the EU economy more dependent on external demand.
  • Private consumption remains barely above the pre-crisis level and investment is significantly lower. In addition, the pre-crisis trend towards convergence of GDP per capita has not been restored despite the modest economic upswing, and current policies will not change that any time soon.
  • Quantitative easing does not seem have put an end to deflationary tendencies. The Juncker plan is far from enough to get investment back on track and does not address the divergences in economic levels and social conditions across the EU.
  • Resource productivity has increased in the EU-28, but with marked differences between the member states.
  • Falling investments in renewable energy generations has transformed the EU from a leader into a global laggard on clean energy development.

The European Union is emerging from the crisis that hit almost nine years ago, but only slowly, with only a little help from minor policy changes and leaving deep cleavages within and between countries. A new policy approach is urgently needed that will allow increased investment and expansionary policies in the countries that need them the most’, said ETUI senior researcher Martin Myant.

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