Administrative cooperation

In its opinion on 'Additional considerations on the euro area economic policy 2024', the EESC urges closer coordination of national budgetary policies and considers instruments like NextGenerationEU essential for future stability. 

The EESC recommends including similar tools in the EU’s future financial frameworks to ensure resilience and fiscal sustainability. 

The Committee calls for the completion of the Capital Markets Union to prevent investors from migrating to global markets, prioritising financial market stability and consumer protection, and highlights the need to fully implement the Banking Union by addressing regulatory disparities across Member States, creating a common deposit insurance scheme, and mobilising financial resources for European infrastructure projects.

Climate change is an existential threat for the European economy. Therefore, a comprehensive approach is needed. In this context, based on the empirical and data analyses related to the impact of climate change on the real economy, macroeconomic and financial stability is essential. As things currently stand, intensified natural disasters will lead to unprecedented costs that will have an unpredictable impact on public finance.

The European economy is currently on a downward trend. This will lead to lower revenue and, at the same time, higher demand for spending – mainly related to the costs of climate change, higher borrowing costs and negative trends in demographic development.

Climate change is a matter of urgency and demands a green shift in our economies. To achieve the EU's climate targets, a profound modernisation of the capital stock is needed. This entails a massive expansion of public investments. The need for an EU-level investment fund to finance the green transition is also a matter of economic strength and sustainable competitiveness. One central element of closing the financing gap is an investment friendly reform of the EU fiscal rules. While the reform process is still ongoing and is supposed to be finished by the end of this legislature, it is already clear that the fiscal space for public investments at national level will not significantly increase with the reform.

The EESC welcomes the simpler and more transparent economic governance framework, the reduction of the pro-cyclical bias, the improvement in national ownership and strengthened enforcement, the differentiation and more tailored fiscal adjustment path of each Member State, based on a common-risk framework. However, the Committee proposes replacing the requirement obliging any Member State with a budget deficit of over 3% to cut that deficit by an average of 0.5% of GDP annually, and emphasises that the "technical trajectory" should be first in the hands of national governments and, at a second stage, be the result of a technical dialogue with the European Commission In due course. In due time, but by 2026 at the latest, an EU fiscal capacity should be established to meet at least some of the investment needs for common priorities and to allow Member States the fiscal space to meet the fiscal costs of the multiple transitions.

The EESC emphasises that the designing of proposals for new sources of own revenues should be done in context of the budgetary pressures faced by Member States following the pandemic and the ongoing international tensions. This has become all the more important in the current higher interest rate environment. The EESC also emphasises that the second set of own resources measures should be in line with the proportionality and social fairness principles. An EU-wide tax on digital transactions could be potentially considered to increase own resources in case the agreed rules of the OECD/G20 Inclusive Framework are not respected by other major trading partners.