Autumn Package: Encouraging analysis on social challenges in Europe, but clearer conclusions on public investment missing

In particular the Autumn Package‘s Annual Sustainable Growth Survey (ASGS) puts forward a correct analysis of many of the disruptive impacts that the Covid pandemic, digitalisation and green transitions have and will have on labour markets, employment, job functions and working conditions. It rightly stresses the need for a just transitions, comprising a focus on re- and upskilling, the provision of quality jobs and the fight against poverty and the related need to investments in this area. The accompanying Joint Employment Report, too, emphasises the need for a fair, inclusive and sustainable recovery.

CESI Secretary General Klaus Heeger said: “We are generally encouraged by the tone of this year’s Autumn Package. During the last years, it has been getting increasingly social even if by now attention must be paid that it does not overly focus on green and digital topics at the expense of social ones. A focus is needed on workers who are facing financial hardship as a result of the Covid pandemic turmoil and financial insecurities as a result of green-digital disruptions in labour markets.”

The ASGS takes this analysis further to call for “a coordinated and sustained effort over several years is necessary to ensure a persistent and sizeable increase in private and public investment proportionate to the needs of the twin transitions and economic, social and territorial cohesion.“

Klaus Heeger said: “Generally, the urgency of investment is duly noted but a very clear message misses on the need for a strong public service agenda in Europe and the need to invest massively in the resilience of public services and its personnel – as a lesson learned from the Covid pandemic. This is very unfortunate.”

He added: “We agree with the European Commission’s assessment that higher public investments should be financed also by means of better tax compliance. However, the Commission fails to conclude on what is the main challenge in this: For better compliance and a more effective collection of taxes, next to better tax legislation and cooperation between administrations, more personnel is needed in tax authorities to keep pace with the evolving creative strategies of evaders and avoiders to circumvent taxes.”

He concluded: “Moreover, just increasing revenues through better tax collection will not suffice. The European Commission already announces plans to phase out the escape clause of the Stability and Growth Pact in 2023. Under current EU fiscal rules, this would mean that Member States will face substantial difficulties in investments on the expenditure side. A clearer call would have been vital to assert them that EU rules will not inhibit them from investing in workers and citizens until a sustainable and socially fair modern economy is achieved.”