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The European economy is growing for the seventh consecutive year and is set to continue expanding in 2020, with all Member States' economies growing despite less favourable conditions and global uncertainties. The number of people in employment is at a record high and unemployment at a record low. At the same time, there are still significant differences between countries, regions and population groups. Against this backdrop, the Commission calls on Member States to build on the progress made in recent years. Effective reforms, accompanied by well-targeted investment strategies and responsible fiscal policies, continue to provide a successful compass for modernising the European economy. [...]
The 2019 country-specific recommendations
Today's recommendations give guidance to Member States to respond adequately to persisting and new economic and social challenges and to deliver on their shared key policy objectives. The content of the recommendations reflects the overall priorities set out in the Annual Growth Survey 2019 and the 2019 recommendation on the economic policy for the euro area issued in November. They draw on the detailed analysis of the country reports published in February and the assessment of the national programmes presented in April. The slowdown in global growth reinforces the need to pursue structural reforms, prioritising those aimed at sustainable and inclusive growth. Member States should advance social convergence in line with the European Pillar of Social Rights. In line with the euro area recommendation, Member States should also proceed towards a more symmetric rebalancing across the euro area and continue their efforts to strengthen the Single Market and deepen Europe's Economic and Monetary Union.
The country-specific recommendations for 2019 include a stronger focus on identifying and prioritising investment needs at national level and pay special attention to regional and territorial disparities. This is in line with the thorough analysis of investment needs and bottlenecks identified for each Member State in the country reports published earlier this year and should serve to prioritise the use of EU funds in the next long-term EU budget, or multiannual financial framework 2021-2027.
Progress in implementing the recommendations
Since the start of the European Semester in 2011, Member States have made at least some progress implementing more than two thirds of the country-specific recommendations issued to them.
Most progress has been achieved in financial services and employment policies, whereas recommendations to broaden the tax base, in healthcare, and competition in services, show a particularly low implementation rate.
In view of the remaining economic and social challenges and downside risks to the economic outlook, stronger reform implementation across the board is crucial to strengthen the resilience of the EU economies.
Macroeconomic imbalances continue to be corrected
Progress in correcting macroeconomic imbalances continues, but further policy action is required. Some Member States continue to record private and public debt at historically high levels, which reduces the room for manoeuvre to address negative shocks. Some other Member States see signs of possible overheating related to the dynamic house price growth and raising unit labour costs. All Member States require further measures to enhance productivity, boost investment, and promote potential growth.
In February, the Commission concluded that 13 Member States were experiencing imbalances (Bulgaria, Croatia, France, Germany, Ireland, Portugal, Spain, the Netherlands, Romania, and Sweden) and that three countries of these were experiencing excessive imbalances (Cyprus, Greece, and Italy). As in previous years, these imbalances require continued specific monitoring under the Macroeconomic Imbalances Procedure (MIP).
Guidance and decisions under the Stability and Growth Pact
Based on the assessment of the 2019 Stability and Convergence Programmes, the Commission has taken a number of steps under the Stability and Growth Pact. The Commission recommends that the Excessive Deficit Procedure (EDP) be abrogated for Spain. Once the Council takes this decision, all the excessive deficit procedures dating from the crisis will be closed. In 2011, 24 Member States were in the corrective arm of the Pact.
The Commission also adopted reports for Belgium, France, Italy and Cyprus under Article 126(3) of the Treaty on the Functioning of the EU (TFEU), in which it reviews their compliance with the deficit and debt criteria of the Treaty. For Italy, the report concludes that a debt-based EDP is warranted.
Hungary and Romania have been subject to Significant Deviation Procedure since 2018 and 2017 respectively. The Commission today addressed a warning to Hungary and Romania that a significant deviation was observed in 2018 and recommends to the Council to recommend they correct the significant observed deviation.
The Commission also adopted today the third report for Greece under the Enhanced Surveillance framework that was put in place following the conclusion of the European Stability Mechanism stability support programme. The report notes that Greece has made a reasonable start to the post programme environment since August 2018, but finds that reform implementation in Greece has slowed in recent months, and that the consistency of some measures with commitments given to European partners is not assured and poses risks to the achievement of agreed fiscal targets. [...]
European Economic Forecast Spring 2019
Opening remarks by Vice-President Dombrovskis on the European Semester 2019 Spring Package
Opening remarks by Commissioner Moscovici on the European Semester 2019 Spring Package
Speaking points by Commissioner Thyssen on the 2019 European Semester Spring Package