27th February 2015

Economic Policy: Commission discusses 2015 European Semester, publishes country reports

On 25 February, the European Commission published its country reports on all 28 member states as part of the European Semester process. The Commission assessed the macroeconomic situation of each member state and drafted a report that will further be discussed by the Council, as well as individually with each state. Member states will then prepare their reform programs, based on which the Commission will prepare the so-called country-specific recommendations – list of actions that the states should undertake as a priority in the following year. Aside from this, the Commission decided that 16 states experience macroeconomic imbalances. Also the highly debated issue of fiscal deficits of France, Italy and Belgium was discussed by the college of commissioners. The Commission decided that none of the three states violated the budget rules in such a way that sanctions should be called. Especially France openly ignored the Stability and Growth Pact (SGP) rules, the famous 3/60 rule (3% GDP fiscal deficit, 60% GDP public debt). France is under the Excessive Deficit Procedure since years and should have brought its deficit under the 3% of GDP this year. The 2015 deadline was already an extension. When last year the French announced that they will not be able to make it, many member states called for tough stance by the Commission and for sanctions, which are an option under SGP rules. But France indicated that it is willing to comply with the rules, but needs even more time to reform. This led the Commission to assess the fiscal compliance of the member states with some flexibility. Thanks to this, France has avoided sanctions and was granted an extension of the deadline once again. The new deadline is 2017. Some point out, however, that 2017 is an election year in France and therefore it is improbable that this deadline will be respected.

Members of the American Chamber of Commerce in the Czech Republic