Welfare, Wealth and Work for Europe: From individual policy lines towards a strategic European Approach

Wien (OTS) - One of the focus points of this year's European Forum Alpbach is the relevance of economic growth. Taking up this discussion, a press conference with the title "Restarting growth in Europe urgently required - But differently this time" takes place in the Pressezentrum of Alpbach the 3rd of September 2015, at 10:30 a.m. At this press conference the first tentative conclusions of the "Welfare, Wealth and Work for Europe" project - funded within in the 7th EU Framework Programme to investigate options for and feasibility of a new socially balanced and ecologically sustainable growth path for Europe - are communicated by Karl Aiginger (project coordinator, WIFO) together with Mathilde Mesnard (OECD) and Gunilla Almgren (UEAPME). The press conference is moderated and summarised by Franz Fischler, who has been actively involved in the project from the beginning as member of the WWWforEurope Policy Board. This project suggests new innovative game-changing measures for economic policy with the intention to restructure the future of the European economy.

Background of the project

After an extremely successful process of unification, culminating in a joint currency for 330 million people, Europe needs a new strategy which pro-actively pursues an ambitious "high road to competitiveness". The long-lasting financial crisis, problems in neighbouring countries and the handling of the Greek crisis have exacerbated the need for a consistent, longer-term strategy.

The four-year research program WWWforEurope presents research results on strategy and governance, specifically focusing on the goals of economic dynamics, social inclusion and ecological excellence. It uses a network of 33 European research groups, as well as high ranking policy and scientific boards, to produce evidence and discuss options. It offers the results to the scientific community, international organisations (OECD, European Commission), European-based and national policy makers and stakeholders representing social partners and civil society.

A vision for Europe 2050

As a tentative vision for Europe in the globalised world of 2050 WWWforEurope proposes:

By 2050 Europe will have become a role model for a dynamic, open and pluralistic economic area characterised by limited income differences, absolute decline of emissions and resource use and positive spillovers to neighbours and the world at large.

Dynamics include that a broad set of economic and social values will have been reached for more and more people and that economic choices are widening. People are learning (including changes in preferences, behaviour and institutions) how to reach welfare goals and life satisfaction individually as well as within society. The limits of the planet are respected; absolute emissions are significantly reduced to a greater extent than needed from an individual European perspective, so as to allow developing countries to have more scope for economic development and poverty prevention. Unemployment is low; income spreads are limited to democratically determined levels.

Average incomes are growing slowly, but more quickly in countries and regions with lower per capita income and for individuals with lower incomes. Working time is reduced, mainly on an individual basis, so that personal choices can be pursued, but with a general downward trend. More money and time is spent on education, societal goals and leisure or cultural activities.

Summarising the strategy lines delivers the following central focal points of the project:

- Stronger dynamics based on innovation and skills, measured by Beyond GDP goals

- Less income disparity, higher employment

- Europe as a world leader in environmental technology and renewables

- Stable financial sector (smartly regulated, plus financial transaction tax); reduced taxes on labour, higher environmental and property taxes

- Open region and societies, taking advantage of globalisation/heterogeneity, cooperation with neighbours

Only "high-road competitiveness" works for Europe

WWWforEurope promotes a high-road strategy for Europe and investment in change, where the ultimate aim of 21st century Europe has to be to move to Beyond GDP goals as a broader measure of performance. Economic policies should be about developing capabilities instead of being preoccupied with costs. From this perspective, ecological and social goals become at least as important as cost competitiveness and labour productivity. This concept permeates WWWforEurope research work.

Five "capabilities" have been identified as strategically important drivers of success: education, innovation, institutions, an activating social policy and ecological ambition. Because outcome competitiveness (the "performance" of an economy) is measured not by the export surplus but by the attainment of a set of economic, social and ecological goals, the intrinsic content of the term "competitiveness" is radically changed from price (or cost) competitiveness to the "ability of a region to provide Beyond GDP goals". This redefinition provides a game changer from an inadequate - backward-looking strategy to a forward-looking one.

Europe needs a two-stage strategy

A two-stage strategy is needed for Europe. In the long run, economic growth will be lower and performance can and should be measured by a broader set of goals requiring less growth. Europe can and should try to lead in this transition to new societal and ecological goals and can make social and ecological innovation its competitive advantage. In the short and medium run (first stage), Europe needs more dynamics, proactive cooperation with neighbours and higher dynamics (including growth) with respect to lowering unemployment, correcting financial balances, reducing debt and coping with immigration. However, it is all-important that policy in this first phase does not pursue policy as usual, but invests in long run change. WWWforEurope therefore calls the first stage "consolidation and reprogramming". The success of the second stage - called "socio-ecological transition" - depends on the firm determination of European policy that this process starts now. The decoupling of emissions from economic dynamics as well as the decoupling of work from growth require immediate fundamental changes in institutions and infrastructure, in order to yield success in 2050.

Although the aim of WWWforEurope's work is to provide a menu of analyses and policy recommendations from which policy makers should choose, the overriding, all-encompassing message is clear: it is an ambitious strategy to promote a socio-ecological transition towards a less growth-centred and more welfare oriented model. It is not without trade-offs and not easy, but it is also both necessary and feasible.

Rückfragen & Kontakt:

For further information, please contact (from 12 p.m.) Dr. Margit Schratzenstaller, Tel. +43 664/2256630, Margit.Schratzenstaller@wifo.ac.at.