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How do we handle the economic crisis?

How do we handle the economic crisis?. European and National Economic Recovery Plans CEBRE, 17 June 2009 Giovanni Campi, Senior Policy Advisor, EUROCHAMBRES. 1. European Chambers’ perspective….

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How do we handle the economic crisis?

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  1. How do we handle the economic crisis? European and National Economic Recovery Plans CEBRE, 17 June 2009 Giovanni Campi, Senior Policy Advisor, EUROCHAMBRES

  2. 1. European Chambers’ perspective… • The European CCIs evaluation of their NERPs is generally satisfactory/good (2.5 on a scale from 1 to 5) • The majority of CCIs broadly supports the measures contained in their NERPs, which seem to follow the EERP guidelines • Taking the 10 ‘Actions for Recovery’ of the EERP as a benchmark, all MS have announced actions in those fields: • employment • demand for labour • access to finance for businesses • investments in infrastructure

  3. 1. European Chambers’ perspective (ii) • European CCIs noticed that actions at national level are much less intense in the following fields: • energy efficiency • green products • clean technologies • investments in R&D, innovation and education • Over half of respondent CCIs noticed that measures for green technologies/ products have not been taken in their countries • Many CCIs asked for measures in the following fields: • More guarantee schemes for SMEs • Measures to facilitate access to credit (particularly CEE) • More resources for training, education and flexicurity • Actions to help with late payments

  4. 2. What about the G20 countries?… • On average, the magnitude of the NERPs of the G20 countries is between 1% and 2% of GDP: • Around 0.5% or less: Argentina, Australia, Brazil • Over 2%: China and Canada • The majority of G20 CCIs broadly agrees with the measures included in their NERPs; • G20 CCIs deplore general one-off rebates or actions which do not have at least a short or medium-term perspective (e.g. tax reductions in several countries)

  5. 2. What about the G20 countries? (ii) • Number of measures included in the G20 NERPs (in this order): • Investment in infrastructure • Access to finance measures • Employment measures • Actions to reduce administrative burdens • Increased investment in R&D • Demand for labour • Clean technologies  In some of the G20 emerging economies the NERPs are way less developed (both in magnitude and measures included) compared to most of the developed economies. But, the focus is very similar.

  6. 3. Policy elements… • Measures to sustain short-term aggregate demand and employment BUT not enough competitiveness-oriented/medium-term measures • NERPs fail to implement structural actions related to taxation, social charges and the public administration which would prove instrumental to increase productivity and economic resilience • Not much ‘smart’/green growth measures • Size of the EERP/NERPs does not matter too much, the type of measures included and their implementation do!

  7. 3. Policy elements (ii) • Stabilization of the financial system and provision of affordable credit to the real economy not yet attained (ECB bank lending survey, ECB financial stability report etc) • No or only partial interconnection with the SBA measures • Lack of coordination with legislative ad policy actions which are not directly part of the recovery packages but which benefit the Internal Market • Larger divergences in EU countries’ economic performance in the future

  8. 4. Priorities Today… • Stabilization of the financial system  Access to finance • Late payments; • Safeguard and deepen the Internal Market • Revise plans with priorities more in line with structural improvements and implementation Tomorrow… • Public finances and SGP • Reduce skills mismatch and enhance labour mobility • Stronger fiscal coordination in the euro-area  How to allocate EU resources  EU budget review (but, as for now, that’s another story…)

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