For the fourth year, the S&D Group presents as part of its Progressive Economy initiative an independent Annual Growth Survey, written by four independent economic institutes. The iAGS 2016 analyses the economic situation in Europe, compares various scenarios of economic policy and makes recommendations on economic priorities for the year ahead. It highlights that while Europe runs a huge trade surplus against the world, this has come at the price of high unemployment and suppressed domestic investment (see executive summary here). The iAGS 2016 is presented just before the Commission launches the 2016 European Semester by adopting the Annual Growth Survey package and tabling a recommendation for the euro area's economic policy.
S&D Group vice-president for economic and social policies and the European Parliament's rapporteur on the 2016 Annual Growth Survey, Maria João Rodrigues, said:
"Europe's economic recovery remains too slow to significantly reduce our still very high unemployment. Europe is lagging behind the US and other economies due to a lack of investment, weak internal demand and an excessive current account surplus. We call for a coordinated plan for stronger recovery: while some countries keep consolidating their public budgets and their companies struggle to reduce debts, other countries could and should support domestic demand in Europe through much greater investment.
"We cannot build lasting prosperity without investments in education, green energy, migrants' integration or improved security. Europe has under-invested for many years and it must take advantage of low interest rates to break this vicious circle. Only through greater investment can Europe remain successful in global competition. We are lucky that oil is cheap now, but we should invest all money saved on oil into energy efficiency, renewables, new technologies and skills.
"The European Commission has advocated a 'virtuous triangle' of fiscal responsibility, structural reform and mainly private investment. In our view, we need a 'solid square', with domestic demand as the fourth priority. The eurozone is running the largest surplus in the world, but this engine is simply not strong enough for robust growth and high employment.
"The European economy can do much better if we finally start reducing social inequalities. Low and medium-income households would spend or invest every additional euro if they had it, but huge amounts of value created in Europe are lost to tax havens. We expect the Commission to recognise that 'structural reforms' should focus on these kinds of problems: improved tax collection, better public services, and renewed fairness. Europeans must be able to enjoy equal opportunities once again – those who work hard need to have good prospects again, even if they grew up in poor neighbourhoods."