12 February 2013

ECOFIN Council conclusions on the Annual Growth Survey 2013

I THE 2013 EUROPEAN SEMESTER

The Council:

2. EMPHASISES that the growth and debt challenges confronting the EU economy continue to be serious, and that improving confidence and reviving economic growth, ensuring debt sustainability and improving competitiveness, while creating conditions for sustainable growth and jobs in the longer-term, are the main priorities at the current juncture; and UNDERLINES that this requires coherent national responses that will take into account interactions between different policies as well as spill over effects between Member States.

Continued efforts are needed especially in the area of breaking the vicious cycle between weak financial systems, tensions in the sovereign debt market and low economic growth. In view of the duration of the economic and financial crisis and prospects of a slow recovery, STRESSES the need to sustain fiscal consolidation and ensure debt sustainability, while resolutely addressing the underlying causes of the crisis, thereby preparing the ground for robust sustainable economic growth and a notable reduction in unemployment.

3. CALLS ATTENTION to the progress made in 2012, but UNDERLINES that there is no room for complacency. Significant steps are being taken with regard to the consolidation of public finances, which is contributing to reducing high debt levels and tensions in financial markets. Structural reforms have also contributed to reducing macro-economic imbalances in both the EU and the euro area, in particular in vulnerable Member States. Adjustment in external positions appear to significant extent structural and the gains in competitiveness, if sustained, are set to support the export contribution to rebalancing and further adjustment going forward. Current account surpluses in euro area Member States have also been reduced, though less than deficits, while maintaining the surplus with non-EU countries and competitiveness vis-à-vis the rest of the world.

4. UNDERLINES that the horizontal macro-economic and fiscal guidance provided in 2012 remains overall valid1; and RECALLS that strong emphasis should be put on implementation of earlier reform commitments, in particular those set out in National Reform Programmes and underlined by country-specific recommendations.

5. In this respect and in line with the integrated surveillance framework of the Europe 2020 strategy and the Integrated Guidelines, CALLS ON Member States to present a comprehensive response with concrete, detailed and ambitious and effective measures to fiscal, macro-economic and structural challenges, taking into account national starting positions, in their Stability or Convergence Programmes and National Reform Programmes; and ENCOURAGES the Commission to propose ambitious, relevant, well-targeted and evidence based country-specific recommendations on this basis, building on and refining recommendations delivered in 2012, taking into full consideration reforms already undertaken in countries as a response to previous recommendations.

6. EMPHASISES that euro area Member States are in a specific situation due to their stronger financial and economic inter-linkages and the resulting spill-overs and UNDERLINES that a prerequisite for growth and adjustment is to continue on the path of fiscal consolidation and structural reforms and to reverse financial fragmentation, to improve financing conditions for investors, especially in the vulnerable countries and to encourage the inflow and efficient allocation of capital to support adjustment; further RECALLS that the reform momentum is supported by the on-going efforts to strengthen EMU governance based on deeper integration and reinforced solidarity in the euro area as agreed by the European Council in December 2012, with the immediate priority of implementing the reformed economic and fiscal governance and financial regulation and developing the banking union; and STRESSES the importance of developing possible further measures and a time-bound roadmap at the June 2013 European Council.

7. REITERATES the importance of the entry into force and strict implementation of measures strengthening economic governance, notably the six pack legislation and the Treaty on Stability, Coordination and Governance; RECALLS that the entry into force of this Treaty creates an obligation on the Member States that are bound by the Treaty to ensure, with a view to best-practise benchmarking, that all major economic policy reforms that they plan to undertake will be discussed ex-ante and, where appropriate, coordinated among themselves; WELCOMES progress made on the Commission's proposals for further strengthening of euro area surveillance (the 2-pack); and CALLS FOR swift agreement with the European Parliament on the 2-pack and timely implementation of the new governance framework.

See full conclusions for:

II FISCAL AND MACRO-ECOOMIC POLICY ORIETATIONS

• Pursuing differentiated growth-friendly fiscal consolidation
• Restoring lending to the economy
• Promoting growth and competitiveness

III MOBILISIG EU LEVEL GROWTH DRIVERS

Full conclusions

Commenting at the ECOFIN press conference, VP Rehn said:

The Commission fully supports the Council conclusions as agreed today on the Annual Growth Survey. The AGS has a very strong focus on the need to boost competitiveness, particularly in view of the decline in manufacturing employment in Europe over the past decade: 2.5 million jobs in our four largest Member States alone have been lost. We need to reverse this downward trend. And we can do so, provided we stay on the reform course. Not reform for its own sake, but reform for the sake of restoring sustainable growth and job creation.

As the AGS and Council conclusions underline, this means investing in education and training, and continuing reforms in our labour markets to remove obstacles to job creation. It means supporting entrepreneurship and investment and completing the single market. It means finishing the job of financial repair to boost the flow of credit to SMEs and households. It means supporting public investment, as has recently been done with the capital increase of the European Investment Bank. And it also means designing smart regulation that achieves societal and environmental objectives without hampering job creation and competitiveness.

All of these policies for growth will be reflected in the country-specific recommendations, which the Commission will present in the coming spring. And I trust that they will feature prominently in Member States' national reform programmes. In fact, making effective use of the European Semester will be a crucial test of Europe's credibility and determination to stay the reform course.

Full statement

© European Council