The EU's economic priorities
The EU has set several economic priorities for the period to 2020. The main instruments to achieve them are the Europe 2020 Strategy and the Euro Plus Pact. Economic priorities, budgetary discipline and macroeconomic surveillance come together in the European Semester. The maximum amount of the annual EU budget and what it can be spent on are laid down for a period of seven years in the Multiannual Financial Framework.
As the successor to the Lisbon Strategy (the EU action and development strategy for 2000 to 2010) the EU has developed the Europe 2020 Strategy. The Europe 2020 Strategy was prepared in response to:
- the financial crisis, which has revealed structural weaknesses in the European economy;
- the long-term problems the European Commission has been seeking to address for some time: globalisation, impending scarcity of raw materials and the ageing population.
To address these problems, Europe 2020 has set three, self-reinforcing priorities:
- smart growth: developing an economy based on knowledge and innovation;
- sustainable growth: for a resource efficient greener more competitive economy;
- inclusive growth: for a high employment economy delivering economic, social and territorial cohesion.
To achieve these priorities, the European Commission has set targets that each member state has translated into national targets for 2020. The table below shows the European targets and the related targets for the Netherlands.
Europe 2020: European and Dutch targets
|European target||Dutch target|
|1.Work||75% of 20-64-year-olds to be employed||80%|
|2. Research and development||3% of the EU's gross domestic product (GPD) to be invested in research, development and innovation||2,5%|
|3. Energy||greenhouse gas emissions 20% lower than in 1990, 20% of enery from renewables and 20% increase in energy efficiency||greenhouse gas emissions 16% lower than in 2005, 14% of energy from renewables (the Netherlands has not set a target for energy efficiency).|
|4. Education||reducing school drop-out rates below 10%; at least 40% of 30-34-year-olds completing third level education.||school drop-out rate below 8%; at least 45% of 30-34-year-olds completing third level education|
|5. Poverty||at least 20 million fewer people in or at risk of poverty||at least 100,000 fewer people in or at risk of poverty|
More about Europe 2020
Euro Plus Pact
The Euro Plus Pact was adopted in March 2011 to complement the Europe 2020 targets. The countries that signed this intergovernmental agreement are the 19 euro countries plus Bulgaria, Denmark, Lithuania, Poland and Romania. The pact is made up of political agreements designed to:
- foster competitiveness;
- foster employment
- contribute further to the sustainability of public finances; reinforce financial stability.
The participating countries will announce every year what measures they will take in these four areas in the subsequent 12 months.
More information is available:
- on the website of the Council of Ministers of Economic and Financial Affairs of the EU member states and
- in a presentation given by the President of the European Commission, José Manuel Barroso.
In 2010 the EU decided to establish the European Semester to coordinate reporting and monitoring of the EU economic priorities (as laid down in the Europe 2020 Strategy and the Euro Plus Pact) and EU surveillance of budgetary discipline and macroeconomic conditions in the member states. The European Semester is held in the first half of the year so that the member states can take account of the EU's recommendations when preparing their definitive budgets in the second half of the year.
Multiannual Financial Framework
The EU budget for the realisation of its medium-term objectives is laid down in the Multi-annual Financial Framework (MFF).
The total sum for the new framework is € 970 billion, spread out over the period 2014-2020. This is 0.95% of the gross national income (GNI) of all EU member states combined.
Within the MFF, the Cohesion Fund is an important contributor to reach the Europe 2020 objectives. This Fund finances EU policy in the field of job creation and it supports initiatives that improve a country’s competitiveness and economic growth.
- The European Commission website on the Multi-Annual Financial Framework.
- Regulations for the 2014-2020 European structure and investment funds
Pact for growth and jobs
The European Council of 28-29 June 2012 proposed a new pact for growth and jobs. It includes a financial stimulus to achieve the EU's economic priorities as set out in EU2020. A €10 billion increase of the capital of the European Investment Bank (EIB) will boost the Bank's overall lending capacity for the EU by €60 billion.
- Council conclusions Euro Group on the Euro Plus Pact, 28-29 June 2012
- Press release, Remarks by President Van Rompuy, 28 June 2012
- European Investment Bank
Social dimension EMU
To increase the importance of the social dimension of the EMU within the system of EU economic governance, the European Commission proposed to step up the monitoring of developments in the field of social policy and labour market policy, and to make these part of the macro-economic surveillance. To realise this, the Commission proposes for example to add several indicators to the MIP. The Commission’s proposal was adopted by the EU Council on Social Affairs and Employment in December 2013.
The Netherlands welcomes the Commission’s suggestions to strenthen EU social policy, and adds some proposals to the Commission Communication. However, at the same time the Netherlands emphasise that the mandate of this policy area primarily lies with the member states themselves. More harmonisation in this field is therefore not an option.