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Investment is not a cost but an asset for our future – this is what President Juncker explained last week in front of the European Parliament. He went beyond words and was concrete about what he meant; any contribution from EU countries to the EU investment plan will not be taken into account when the Commission assesses national budget deficits and debts. In other words, that money will not be seen as “spending”, “expenditure”, or “a cost” – it will be taken out of the account book when assessing increases in budget deficit or the national debt. This small step could change quite a lot in the way we run our economies.

This is a great opportunity for the EU to set foot on a new path to respond to our dire social situation; but there are three issues to be fixed in order to move ahead and to invest in a cohesive future.

One, if the President Juncker is true to his commitment to a “Triple A” social rating, he needs to talk about “social investment” in his investment plan and not “public expenditure” for funding our schools and welfare systems. The investment plan proposed last week missed an opportunity to include strong social investment for inclusive growth and to achieve the Europe 2020 strategy, including drastically reducing poverty and social exclusion.

Two, the Commission needs to consider investment not only for its European plan, but also at national level. It should have serious discussions with member states on what the latter consider to be an investment for their future. Once there is a common agreement on what investment is and what it is not, then we can jointly consider it to be an asset for our future, rather than a cost.

Three, is the Commission ready to conduct a social impact assessment of the investment to be made at EU level? This would help the EU to avoid situations we have witnessed at national level, such as the growth strategy in the UK that I wrote about last week, which see poverty increase despite a rise in jobs and growth.

The time for the switch from expenditure to investment is now; policies for energy, telecoms and transport are certainly ready for this change. The EU needs to work harder to achieve the same for social policies, and we look forward to working with decision makers towards this end.

Let’s engage!

Pierre Baussand, Director