The third European Semester of the policy coordination has reached its most important moment, as the European Commission issued country-specific recommendations. These recommendations are based on a detailed analysis of the economy of each Member State and should help governments boost their competitiveness and find an easier path of geting their economies back on track.
Most of the European economies experience singificant problems in tackling rising unemployment, especially of their youth. Flexible and effective labour market and job creation are a major challenge, as the Europe´s growth has fallen to negative numbers again in the first quarter of 2013.
The European Commission also admitted that vulnerability of European economies is still very high, thus the fiscal consolidation should continue, but not unconditionally, as it should not harm or retard growth policies. Country-specific recommendations mostly focus on priorities adopted by the EC and Member States in March 2013: pursuing differentiated growth-friendly fiscal consolidation, restoring normal lending to the economy, promoting growth and competitiveness, tackling unemployment and the social consequences of the crisis and modernising public administration.
In addition to the European Semester recommendations, the Commission has also adopted a number of decisions under the Excessive Deficit Procedure, reflecting the latest developments in Member States that are expected to bring their government deficit below the EU's 3% of GDP threshold.
Currently there is an Excessive Deficit Procedure ongoing fo 20 EU Member States – all except Bulgaria, Germany, Estonia, Malta, Finland and Sweden. However, the EC decided to abrogate the EDP for Italy, Latvia, Hungary, Lithuania and Romania and start the EDP for Malta. In addittion, Commission also recommended to extend the deadlines for correcting the excessive deficit for France, Spain, Poland and Slovenia by two years and for Portugal and Netherlands by one year, as countries struggle with sluggish, if any growth and soaring unemployment. All the recommendations are now to be discussed at the ECOFIN Council meeting on 21 June in Luxembourg.
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31st January 2018
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