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14. Recent signs of economic recovery are encouraging and demonstrate that the joint efforts of Member States and EU institutions are bearing fruit. Growth has started to return and there is a modest rise in employment, even though in many parts of Europe, unemployment – in particular youth unemployment - is still at unprecedented and unacceptable levels. Poverty and social exclusion remain major concerns.
15. Thanks to the efforts of the Member States, the correction of macroeconomic imbalances has progressed and public finances continue to improve. The European Council welcomes the abrogation of the excessive deficit procedure for several Member States. The possibilities offered by the EU's existing fiscal framework to balance fiscal discipline with the need to support growth should be used. Given the persistently high debt and unemployment levels and the low nominal GDP growth, as well as the challenges of an ageing society and of supporting job-creation, particularly for the young, fiscal consolidation must continue in a growth-friendly and differentiated manner. Structural reforms that enhance growth and improve fiscal sustainability should be given particular attention, including through an appropriate assessment of fiscal measures and structural reforms, while making best use of the flexibility that is built into the existing Stability and Growth Pact rules. In this context, the Commission will report to the European Parliament and to the Council on the application of the EU governance framework by 14 December 2014, as foreseen in EU law ('6-Pack' and '2-Pack').
17. Against this background, the European Council generally endorsed the country-specific recommendations (CSR) and thus concluded the 2014 European Semester. Their implementation is key to accelerate growth. Based on the principles of national ownership and social dialogue, Member States should respect the recommendations in their forthcoming decisions on budgets, structural reforms and employment and social policies. The Council and the Commission will further monitor CSR implementation and take action as required.
18. The European Council reviewed progress made in the area of regulatory fitness and performance on the basis of the Commission Communication. A lot of progress has been achieved in the implementation of the REFIT programme by the Commission, the other EU institutions and Member States; this has led to an effective reduction of the regulatory burden. The European Council considers that regulatory fitness should remain a priority in the work of the institutions. This requires a strong commitment to regulatory simplification and burden reduction in legislative work and better use of impact assessment and ex-post evaluation throughout the legislative cycle, at the EU and national level.
19. Regulatory fitness measures at the European level should be complemented by initiatives for regulatory fitness by the Member States. In this respect Member States should make full use of regulatory flexibility provisions for the benefit of small and medium-sized enterprises in the implementation of EU legislation.
20. The European Council calls on the Council to proceed to a detailed examination of the Commission Communication. The Commission, the other EU institutions and the Member States are invited to continue the implementation of the REFIT programme in an ambitious way, taking into account consumer and employees protection as well as health and environment concerns.
In the run-up to the October European Council meeting, the European Council asked the Council to further analyse other medium to long-term measures to enhance the EU's energy security, based on the Commission's EESS. The European Council underlined the importance of energy efficiency, further development of domestic production, further implementing and integrating the European energy market based on a regional approach, increasing transparency on the gas market, and on fostering missing infrastructure, to put an end to any isolation of Member States from European gas and electricity networks by 2015. In line with the objective of completing the European energy market by the end of 2014, interconnectivity must be increased, including through further examination of the new interconnection target proposed by the Commission.
23. The European Council will take a final decision on the new climate and energy policy framework, including on further measures aimed at enhancing Europe's energy security and on specific 2030 interconnection objectives, no later than October 2014. All efforts will be mobilised in order to meet this agreed deadline.
25. The European Council adopted the Decision proposing Jean-Claude Juncker to the European Parliament as candidate for President of the European Commission. The President of the European Council will conduct consultations in view of other appointments to be made.
26. It agreed the attached strategic agenda. It invites the EU institutions and the Member States to fully implement these priorities in their work. The agenda will also guide the institutions in the annual and multiannual programming as well as in legislative planning; they should organize their work accordingly. The European Council will ensure the regular monitoring of the implementation of these strategic priorities.
27. The UK raised some concerns related to the future development of the EU. These concerns will need to be addressed. In this context, the European Council noted that the concept of ever closer union allows for different paths of integration for different countries, allowing those that want to deepen integration to move ahead, while respecting the wish of those who do not want to deepen any further.
Once the new European Commission is effectively in place, the European Council will consider the process for the appointment of the President of the European Commission for the future, respecting the European Treaties.
The May 2014 European elections open a new legislative cycle. This moment of political renewal comes precisely as our countries emerge from years of economic crisis and as public disenchantment with politics has grown. It is the right time to set out what we want the Union to focus on and how we want it to function.
The European Council agreed today on five overarching priorities which will guide the work of the European Union over the next five years: stronger economies with more jobs; societies enabled to empower and protect; a secure energy and climate future; a trusted area of fundamental freedoms; effective joint action in the world.
Action in these fields is vital, given the important challenges awaiting our societies. Though the recovery in Europe is gaining pace, unemployment is still our highest concern – especially for young people – and inequalities are on the rise. Meanwhile the global economy is changing fast. In the digital age, the race for innovation, skills and markets forces all our countries to anticipate and adapt in order to thrive. Scarce natural resources, the cost of energy and impact of climate change are major challenges; Europe's current energy dependency is a vulnerability. Across the world, radicalisation and extremism are reasons for concern. Geopolitical stability at our very borders cannot be taken for granted. Demographic trends are challenging, with ageing populations putting additional pressure on our welfare systems and irregular migration flows requiring common answers and concerted action.
Against this backdrop, the first purpose of the Union's work over the coming years must be to equip our societies for the future and to foster confidence.
The countries of Europe are uniquely placed to shape change – both individually and collectively as a Union. Our diversity is an asset, our unity brings strength. In our Union, different degrees of cooperation and integration exist. Our enlargement policy continues to foster democracy and prosperity.
In line with the principles of subsidiarity and proportionality, the Union must concentrate its action on areas where it makes a real difference. It should refrain from taking action when member states can better achieve the same objectives. The credibility of the Union depends on its ability to ensure adequate follow-up on decisions and commitments. This requires strong and credible institutions, but will also benefit from closer involvement of national parliaments. Above all, the emphasis should be on concrete results – in the five following fields.
Our countries are emerging from the deepest economic crisis in a generation. We see efforts and reforms producing results. Yet it is not going to be a return to the promises of yesteryear. Important challenges remain: slow growth, high unemployment, insufficient public and private investment, macroeconomic imbalances, public debt, and a lack of competitiveness. We respect the Stability and Growth Pact. All our economies need to continue to pursue structural reforms. Very clearly, our common strength hinges upon each and every country's success. That is why the Union needs bold steps to foster growth, increase investments, create more and better jobs and encourage reforms for competitiveness. This also requires making best use of the flexibility that is built into the existing
Stability and Growth Pact rules.
The upcoming review of the EU2020 strategy will be a good occasion to bring it fully in line with this strategic agenda. Therefore the priorities we set for the Union for the next five years are to:
• Fully exploit the potential of the single market in all its dimensions: by completing the internal market in products and services; by completing the digital single market by 2015;
• promote a climate of entrepreneurship and job creation, not least for SMEs: by facilitating access to finance and investment; by ensuring more resilient financial regulation; by improving the functioning of labour markets and by shifting taxes away from labour; by reducing unnecessary administrative burdens and compliance costs in a targeted manner, respecting consumer and employees protection as well as health and environment concerns;
• invest and prepare our economies for the future: by addressing overdue investment needs in transport, energy and telecom infrastructure as well as in energy efficiency, innovation and research, skills, education and innovation; by making full use of EU structural funds; by mobilising the right mix of private and public funding and facilitating long-term investments; by using and developing financial instruments, such as those of the European Investment Bank, in particular for long-term projects; by providing the right regulatory framework for long-term investments;
• reinforce the global attractiveness of the Union as a place of production and investment with a strong and competitive industrial base and a thriving agriculture, and complete negotiations on international trade agreements, in a spirit of mutual and reciprocal benefit and transparency, including TTIP, by 2015;
• make the Economic and Monetary Union a more solid and resilient factor of stability and growth: with stronger euro area governance and stronger economic policy coordination, convergence and solidarity, while respecting the integrity of the internal market and preserving transparency andopenness towards non-euro EU countries.