Green economy  |  Publications  |  24.05.2012

A Green Investment Pact for economic and fiscal sustainability

To avoid spreading recession across Europe and overcome the current crisis, the Greens/EFA group in the European Parliament are asking for a Green Investment Pact to enable an economic and fiscal sustainability for the future of Europe.

Europe will only successfully emerge from the current economic crisis by deepening economic and political integration on the basis of responsibility, solidarity and commitment to common rules. But Europe needs more than a Fiscal Compact, which does not bring sustainable solutions to the crisis and will damage the livelihoods of many Europeans and deprive essential public services - including healthcare, welfare, infrastructure and education - from necessary funding. Besides the Fiscal Compact has been approved outside the EU institutional framework, thereby putting away the European Parliament.

The Greens/EFA group in the European Parliament are instead advocating for a  Green Investment Pact, combining economic potential with sustainable development, giving the crisis countries a clear perspective and sufficient time to readjust their economies. This pact would be financed primarily through EU own resources, tax revenues and shifting expenditure. It must mainly focus on resource and energy efficiency, which will serve all EU, increasing employment, income equality and quality of the environment.  

As some of the main elements of this Green Investment Pact, the Greens/EFA are pushing forward:

  • a sustainable investment instrument in the Eurozone (e.g. an increase in the capital of the EIB, project bonds, etc.), aimed at mobilising at least 1% of GDP per year from public and private sources over a period of ten years;
  • an increased and reformed EU budget to boost green jobs;
  • an EU financial transaction tax, which a significant part of the revenue should be allocated to the EU budget, thereby reducing national contributions to the EU budget and facilitating national consolidation efforts;
  • a reform of the EU tax policy to include further cooperation in national tax systems to avoid fiscal dumping; and tax incentives for sustainable investments and energy savings;
  • a progressive introduction of Eurobonds starting by the creation of a redemption fund, together with the creation of a credible firewall by granting a banking license to the European Stability Mechanism (ESM), so that it can act as a lender of last resort to Eurozone member states:
  • stricter rules to ensure the stability of the European bank sector and make sure European banks, especially those who benefited from rescue funds, lend to the real economy;
  • sustainable structural reform to strengthen the European economy. Fiscal austerity will not improve crisis countries' competitiveness on the long term. Instead shifting towards a green economy will ensure increased competitiveness and employment;
  • shifting to ambitious environmental regulation (e.g. increasing the EU's 2020 emissions reduction target from 20% to 30%) which would make European businesses' planning easier and bring them back to the forefront of global markets for energy- and resource- efficient products, making European enterprises more competitive.
  • an ambitious Energy Efficiency Directive would reduce current account deficits (crisis countries are heavily dependent on oil imports), and cut down energy costs for households.

 

 

 

 

 

 

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