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Boosting investment, implementing the Compact for Growth and Jobs

The EU summit decided to launch a new investment action plan aimed at restoring credit flows in the economy. Measures to support SMEs will be a priority, given the important role SMEs play particularly as regards job creation. Entrepreneurship and self employment are to be promoted as well.

 

<p>© Oxlock, Fotolia.com</p>

© Oxlock, Fotolia.com

"In order to help millions of SME's, the biggest employers in our countries, get through the credit crunch in some countries, we will combine funds from the EU budget and the European Investment Bank", said Herman Van Rompuy, President of the European Council.

A new Investment Plan for Europe

The EU's Multiannual Financial Framework (MFF) for the 2014-20 period will be of crucial importance in this regard, as it is expected to help boost growth and jobs across Europe. Both the Commission and the European Investment Bank will be major actors, and the European Council agreed on a number of measures. It welcomed the intention of the Commission and the EIB to implement them as a matter of priority. These measures include

1. increased lending to the economy by the EIB, making full use of the EUR 10 billion recently added to its capital

2. increased use of joint (Commission and EIB) risk-sharing financial instruments to leverage investment in SMEs

3. strengthened cooperation between national development banks and the EIB.

The Commission and the EIB will report back ahead of the European Council's meeting in October.

Implementing the Compact for Growth and Jobs

The Compact for Growth and Jobs was agreed by the European Council in June 2012. It aimed at mobilising €120 billion in order to unlock domestic potential for growth. The compact also indicated some areas of action:  

  • tackling unemployment, especially among young people,
  • modernising public administration and
  • developing e-government services.

While some measures have already borne fruit, more efforts are required, and both the EU and the member states "should do their utmost to ensure that all the elements of the Compact are rapidly implemented", in particular as regards the single market, innovation, the digital agenda, services, energy and tax.

Heads of state and government discussed issues likely to have a major impact both on the rate of economic growth and on competitiveness. As a result, the European Council

  • called for a broad horizontal and coherent approach for a modern European industrial policy accompanying structural change and economic renewal
  • looked forward to receiving, ahead of its meeting in October, a work programme detailing further proposals to reduce the overall burden of regulation and foster competitiveness, while taking into account the need for proper protection of consumers and employees
  • called for continued efforts to make EU and national regulation more efficient, consistent and simple.

European Semester

The leaders generally endorsed country-specific recommendations on budgets, structural reforms and employment and social policies addressed to each member state, thus concluding the 2013 "European Semester" – a six-monthly policy coordination exercise. The member states will now translate these recommendations into decisions, while promoting full national ownership and preserving social dialogue.

Moreover, the European Council welcomed the launch of negotiations on a transatlantic trade and investment partnership with the United States.

 

See also:

 

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