My second point is that we cannot make job creation the real priority without changing the prevailing macroeconomic paradigm. The model of economic and monetary union we inherited did not create strong foundations for either economic prosperity or social cohesion. Instead it has brought us the so-called process of ‘internal devaluation’, which contradicts many of the principles the EU should stand for. We need to build a genuine “EMU 2.0”, reshaping not only the general macroeconomic model but also the macroeconomic dimension of employment policy.Many adjustments are necessary to correct existing macroeconomic imbalances and reallocate labour to more productive and sustainable activities, these adjustments cannot be one-sided, and aggregate demand must not be ignored in this process. Our economies will only pick up if there are enough people working, earning and spending. In other words, we need to remember that putting people to productive work creates growth. We also have to restore labour’s share in total income.
This is why, in the April 2012 Employment Package, we have sought to rebalance the EU’s employment strategy to develop the demand side of it.
In particular, the Package focuses on stepping up job creation by using a mix of policy measures acting on the demand side, such as cost determinants (taxes, subsidies, wages), EU structural funding and development of key job-rich sectors, notably the green economy, ICT and healthcare sectors.
A good starting point for deploying demand-side measures is to consider what the economic and social needs over the coming years will be, and whether enough labour is employed to address these needs.