In its annual assessment of the economic and social situation in the Member States, the European Commission today stresses the need to promote investment, pursue responsible fiscal policies and implement well-designed reforms.
Challenges vary significantly across countries and call for appropriate and determined policy action.
This review of country-specific challenges comes against the backdrop of a European economy that is expected to grow for the seventh consecutive year in 2019, but at a more moderate pace. Employment is at a record high and unemployment at a record low. Public finances have also improved across the board, although some countries are still facing high levels of debt. However, challenges remain. Productivity levels remain subdued, population ageing is intensifying and rapid technological change is having a significant impact on labour markets. Real household income remains below pre-crisis levels in some Member States. Youth unemployment has been significantly reduced, but is still unacceptably high in some Member States. At a time of more pronounced global uncertainty, it is crucial that EU Member States step up their action to boost productivity, improve the resilience of their economies and ensure that economic growth benefits all citizens.Following the publication in November of the Annual Growth Survey and the recommendation on the economic policy of the euro area, which set out the priorities at European level, today’s 28 Country Reports zoom in on the national dimension of the European Semester. The reports provide a detailed analysis of country-specific economic and social challenges. They will serve as the basis for discussions with Member States of their national policy choices ahead of their national programmes in April, and will lead to the formulation in late spring of annual Country-Specific Recommendations.
The Commission also launched a discussion on investment challenges and priorities in the Member States and sets out first ideas as to how EU funds, in particular EU Cohesion Policy funds, can help in the forthcoming programming period 2021-2027. This will also serve to ensure greater coherence between the coordination of economic policies and the use of EU funds, which are a significant part of public investment in several Member States. This new focus is reflected throughout the Country Reports and a new annex on the possible use of future EU Cohesion Policy funds is attached to each Country Report.
Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: “The European economy is experiencing its seventh consecutive year of economic expansion. Yet growth is slowing down. Maintaining momentum into the future will require a high level of competiveness, as well as continued upward convergence. To unlock the full growth potential of our economies, we need structural reforms. We also need well-targeted investment to bolster productivity growth across Europe.”
Marianne Thyssen, Commissioner for Employment, Social Affairs, Skills and Labour Mobility, said: “Demographic change and new technologies are reshaping the labour market, while skills shortages are on the rise in many Member States. We need to shift up a gear. Investing in people’s skills, especially lifting the skill levels of the low-skilled, must be our top priority if we are to maintain our living standards.”
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “We have carried out an x-ray of all 28 EU economies, to identify problems and ensure they can be tackled in a timely manner. Many of Europe’s imbalances are being corrected, thanks to both economic growth and policy action, though longstanding challenges remain. With growth easing this year, it is more important than ever that governments act to strengthen the resilience of our economies: reducing debt, boosting productivity, investing more and better, and tackling inequalities. Concerning Greece, the second Enhanced Surveillance Report also published today shows significant progress but also some areas in which further efforts are needed, and I urge the authorities to complete these in time for the next Eurogroup.“
Corina Creţu, Commissioner for Regional Policy, said: “The Country Reports feature an important novelty this year, with a strong focus on investment bottlenecks and regional disparities, and the Commission’s assessment on how future EU funding should be invested in each country. This will help us kick-start the discussion on the Member States’ investment priorities for the next decade and how Cohesion Policy funds can help.“
Progress with Country-Specific Recommendations
The Country Reports assess Member States’ progress in implementing the Country-Specific Recommendations of July 2018. Overall, Member States have achieved some or more progress with the implementation of more than two-thirds of the recommendations issued since the introduction of the European Semester in 2011. Member States have made most progress on the recommendations on financial services, reflecting the priority given to the stabilisation and soundness of the financial sector in the aftermath of the financial crisis. Sound progress has also been achieved with regard to reforms facilitating job creation on permanent contracts and addressing labour market segmentation.In recent years, one of the ways in which the Commission aims to help Member States step up their reform efforts is through its Structural Reform Support Programme (SRSP), which aims to provide technical support to all EU Member States, at their request, to help them design and implement growth-enhancing reforms. This also includes reforms highlighted in the Country-Specific Recommendations.
via European Commission
