Instead of focusing on austerity, what the EU needs is an investment strategy that fosters growth and employment. First, EU leaders should modify the composition of the €140bn union budget, away from wasteful expenditure towards productive activities. The common agriculture policy – accounting for over 40% of total resources – should not subsidise agricultural prices, which fuels excess production and hurts developing countries. Rather, it should support investment in smallholding farms and farming cooperatives.
Other examples include the channelling of regional and structural funds as well as education and R&D expenditure into projects with revenue streams in excess of funding costs.Second, the 27 member-states could expand the remit and funds of the European Investment Bank by underwriting increased lending. This could be used for infrastructure and other investment projects that yield a higher monetary return than the borrowing costs.
For more: A new economics for the EU | Adrian Pabst | Comment is free | guardian.co.uk
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