Italian Prime Minister Mario Monti underlined the theme in a speech rejecting “deficit-generating, demand-side growth”, which he said would endanger Europe’s new fiscal settlement.
Monti explicitly ruled out “Keynesian economic stimuli”, but he added: “We must not neglect that structural reforms might not deliver growth alone, there could be no growth, we need demand to be there.”
Belgium - a nation-wide growth initiative
The Italian premier said that longer-term financing initiatives designed to boost infrastructure should be considered, involving mixtures of private and public funding.
His speech reflected similar calls for a “pact for growth” from Belgian Prime Minister Elio di Rupo, who told delegates that Belgium was in the process of implementing a nation-wide fact-finding exercise to investigate how best to implement growth stimuli across the country’s fractious regions.
Council President Herman Van Rompuy told delegates that growth was Europe’s “highest priority” and announced that an informal dinner for European leaders to discuss the issue could be convoked before the next scheduled Council summit in June.
On skills and growth, the main theme of the conference, Van Rompuy said that the European budget for 2014-2020 could be leveraged to deliver results.
“Even if the EU budget is capped at 1% of each member states' GDP, this will generate one trillion euros over the 2014-2020 period,” he claimed, adding on labour shortages and mismatches: “We must do to work what Erasmus has done to studies.”
Convergence of opinion around ideas for a growth pact comes amidst a delicate negotiation between François Hollande – widely expected to win the French Presidency next week – and Angela Merkel, which seems likely to result in a new pact to boost growth in Europe if the Socialist comes out on top.
"We are not the consolidation Taliban," German Deputy Finance Minister Thomas Steffen told a conference on Wednesday (25 April) in Berlin. Hollande, meanwhile, has sent reassuring signals to Merkel that he will not try to re-open the fiscal compact, nor seek changes to the mandate of the European Central Bank (ECB) as he had threatened.
Even the ‘hawkish’ ECB President Mario Draghi is now calling for a "growth compact" on top of the fiscal compact.
Elsewhere at the summit, Monti reflected the general mood of delegates in a call to tackle skills by promoting serious apprenticeships a new flexicurity model of labour geared towards more fluid labour markets.
Barroso – determination in the face of pessimism
Set against worsening economic conditions, leaders attempted to cool fraying nerves in the business community.
Speaking at the close of the conference, Commission President José Manuel Barroso pleaded for business leaders to support European-level initiatives on a domestic level and to show determination in the face of Europhobia.
Barroso told delegates that determination was the skill he believed most necessary in his role, adding: “What bother me is not the eurosceptics or Europhobes, those who reject Europe. What really concerns me is the pessimism of those in favour of Europe, who seem to be permanently in despair. Be proud of what we have achieved, and what can be achieved.”