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THE STATE OF THE EUROPEAN UNION
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Labour costs in the euro zone fell by 1.1% in 2014 and by 1.4% in the
EU as a whole, in stark contrast with the very visible increase in business
profits, not to mention the massive support for the financial sector during
the crisis, which amounted to 592 billion euros (4.6% of GDP) between
2008 and 2012 in the EU in the shape of bank recapitalisation and 906
billion euros (7.7% of GDP) in guarantees and liquidity measures (accord-
ing to European Parliament figures). All of it was paid for by the taxpayer.
There was no minimum redress to meet social needs, or a progressive
taxation reform to make it possible. On the contrary, indirect taxes went
up and direct taxation went down.
The challenge facing the Union, then, is very clear. It must spend more
on social and labour rights, it has to invest much more in research, innova-
tion and education and it must raise more cash by broadening tax bases
along progressive taxation lines.
This is surely the best way of ensuring that the incipient growth in
Europe remains on an upward trend and is capable of creating worthwhile
employment.
The other challenges facing the EU, which are set out in the following
report and its recommendations, will only be met adequately under the
umbrella of an economy based firmly on production, jobs and demand.