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EU bids to surf growth wave

May 08 2012 12:49

Brussels - Surfing a wave favouring growth policies after Francois Hollande's presidential victory, the European Commission refreshed its pitch on Tuesday for a big increase in the EU budget.

"While the return to lasting growth will take time, a turnaround can be achieved by the end of this year if the necessary decisions are taken now," Commission president Jose Manuel Barroso said in an annual 'Europe Day' message.

Re-packaging a string of proposals going back 18 months - seeking to leverage vast public and private investment especially in energy, transport and digital infrastructures - Barroso said national governments urgently need to "decide now."

The Commission wants to throw €50bn at these areas over the rest of the decade - although much of this is dependent on greater private funding also coming forward and based on new pooled EU "project bonds."

Three key dates lie on his horizon: May 11, when the Commission will publish new growth and other economic forecasts; May 30, when national and eurozone-wide action plans will be issued in Brussels; and June 28-29 when EU leaders gather for their final summit of the political season.

With Hollande's election in France, and a push tentatively backed by Italian premier Mario Monti for big-ticket, EU-level investment to be classed differently in national deficit accounting, Barroso is using a voter backlash against the austerity of the past two years to try and raise the European Union's budget.

He has already asked for a 6.8% or €9.0bn increase next year to €138bn and an overall EU outlay of more than a trillion euros between now and the end of the decade.

Bigger member states - led by Britain and including Nicolas Sarkozy's France - have already rejected the 2013 figure and also want to slash €100bn from the total for the 2014-2020 budgetary cycle.

However, Barroso says only pooled EU spending can ensure an infrastructure overhaul delivers a platform for sustainable medium-term growth.

In his speech, he cited barriers to road, sea and rail transport as well as electricity and gas markets that make a mockery of the single European market.

He dusted down Commission research arguing that superfast broadband and other digital infrastructure could add €11bn a year to EU gross domestic product.

Barroso also argued that changes to labour taxation could create tens of millions of jobs in the green economy, health services and the information technology and communications sectors.

"This is clearly aimed at Francois Hollande," said an EU source, admitting a list of priority projects already identified "do not contain any new ideas."

"We know states have no money at national level to prime growth, so we need to use money available at the European level."

eu  |  francois hollande  |  europe debt crisis



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