Open letter: The EU's economic rules must allow for the necessary spending on people and climate
Towards the end of October, the Commission will present a proposal for a revised economic policy, including rules on how governments can borrow and spend on social and environmental causes. Ahead of the publication, 180 unions, civil society, think tanks and academics have come together to call for a new set of principles which aim at an economy that works for us all, scales up green public investment and promote human and planet wellbeing.
With the European Commission soon to launch its proposals to reform the EU’s economic governance, especially regarding fiscal rules, there is a unique opportunity to start a fresh chapter in European economic policy-making. This new chapter must ensure the EU’s fiscal rules are consistent with agreed EU macro-economic, social, and environmental goals, and establish a new approach to member state fiscal policies. Therefore, we are calling upon you to ensure the following principles are at the core of the reform:
Build a future-proof economy with jobs for all - Allow fiscal flexibility to target a fully employed economy with decent and well-paid clean jobs available to all.
Fill the green funding gap and make Europe energy independent from fossil fuels - Targeted and scaled-up green public investment is needed to remain below the 1.5 Celsius goal of the Paris Climate Agreement. A reformed fiscal framework should ensure the alignment of Member States’ public spending with the Paris Climate Agreement, as well as other environmental objectives including reducing resource use and zero pollution.
Reinvest in public services and social protection - Social expenditure must guarantee universal access to quality basic public services, as well as a social safety net, so no one falls through the cracks and the care economy is central.
Target human, economic and environmental well-being - Make durable well-being the primary objective of EU economic policy by establishing adequate indicators within the EU’s fiscal policy framework and making sure the rules do not translate again into austerity. Economic growth as a primary objective does not work and governments should rather aim to achieve improved human, economic and environmental outcomes.