Employers cautiously welcome European Commission economic forecast and the adoption of the RFF
The Employers' Group of the European Economic and Social Committee takes note of the encouraging economic projections released yesterday by the European Commission in the Winter forecast and welcomes today's signing ceremony of the EU's Recovery and Resilience Facility, which lies at the heart of the EU’s recovery plan.
Whilst acknowledging the encouraging data and the steps taken, the Employers’ Group is still very concerned about the difficult economic situation. Companies and entrepreneurs continue to be very concerned about the future, as they see their reserves drying up and protracted lockdowns continue to hamper their operations longer than expected. Without a rapid solution to the COVID-19 pandemic in Europe and the world, expectations of higher GDP growth are unlikely.
Key challenges remain as not all the Member States will recover at the same pace. This is likely to result in a widening of the gap between member states and within segments of each national economy.
Employers consider that the most decisive political and economic policy for 2021 to be able to "see the light at the end of the tunnel" is the vaccination rollout. Consequently, we urge EU governments and European institutions to take all the right steps to speed up the production and the availability of vaccines, also in light of new coronavirus variants.
The EU's tools related to the economic, social and regional cohesion will prove, more than ever, absolutely crucial. Measures taken since the outbreak have helped the liquidity levels of EU firms. However, now is the moment to strengthen firms' solvency and viability. A surge of insolvencies could have devastating macroeconomic ripple effects, with higher unemployment, more people on welfare, lower taxable incomes, and lower household consumption.
We encourage national governments to allocate valuable resources towards the more productive businesses in the economy. Withdrawing public support too early risks pushing viable companies out of business.
It is equally important to have a clear and updated regulatory framework that gives visibility to long-term investment and promotes public-private collaboration.
A concrete reason of hope and optimism is provided by the fact that the national Recovery and Resilience plans are already reaching the Commission (deadline is at the end of April) and so we can really hope for a proper and meaningful delivery of the Next Generation EU. Here, once again we emphasise that civil society and, employers in particular, must be involved in the drawing up of these national plans to ensure they address the right priorities.
The efficient deployment of these funds will be key to an economic recovery based on sustainable, digital and solid growth. We encourage member states to undertake the structural reforms required to ensure that we embark on a sustainable economic recovery.
The RFF equates to more than 17% of euro area GDP, which is larger than the size of fiscal measures taken by most other similar economies. This is an unprecedented effort but we need to ensure that we get it right when it comes to using these funds in an efficient manner. There is no time to waste.
The Employers’ Group is in full agreement with the strong focus on the green (37% of RRF) and digital (20% of RRF) transitions as a good common plan for a long-term sustainable and inclusive recovery across whole EU. Redeployment and upskilling of those workers who have suffered in the current downturn must be another key focus to assist recovery.
EU employers are facing unprecedented challenges and are fully aware that the months ahead will be difficult ones However, we are ready to play our part to accelerate the recovery, resilience and competitiveness of the European Union which will allow us to emerge stronger from this crisis.