EU Spring Package focuses on competitiveness, recovery and resilience
Valdis Dombrovskis - Photo © European Union 2024
(BRUSSELS) - The EU Commission put forward its European Semester Spring Package Wednesday, with guidance to enhance the EU's competitiveness and resilience and maintain sound public finances.
"The EU economy held steady through a series of major shocks and it is improving continuously," said EC vice-president Valdis Dombrovskis: "However, longstanding structural challenges are holding back the EU's competitiveness. Today's Semester offers guidance to boost our overall economic resilience, strengthen fiscal sustainability and improve social convergence across all Member States." he added that the Commission would pay particular attention to "speedy implementation of key reforms and investments as set out in national recovery plans".
Structural challenges needed an integrated approach across all policy areas: macroeconomic stability, promoting environmental sustainability, productivity and fairness. The European Semester provides this policy coordination, including the implementation of NextGenerationEU, with the Recovery and Resilience Facility (RRF) at its core, and Cohesion Policy programmes. The European Semester cycle also provides updated reporting on progress towards the delivery of the Sustainable Development Goals and identifies investment priorities for the upcoming mid-term review of Cohesion Policy.
The EU demonstrated economic and social resilience in the face of the COVID-19 pandemic, Russia's war of aggression against Ukraine and the related energy price surges and inflation hikes. Looking ahead, the Spring 2024 Economic Forecast projects GDP growth in 2024 at 1.0% in the EU and 0.8% in the euro area, on the back of a strong labour market and dynamic private consumption. In 2025, growth is forecast to accelerate further to 1.6% in the EU and to 1.4% in the euro area. Meanwhile, inflation is expected to fall from 6.4% in 2023 to 2.2% in 2025.
The 2024 country reports analyse economic, employment and social developments in each Member State and take stock of the implementation of recovery and resilience plans (RRPs) and Cohesion Policy programmes. The reports also identify key challenges, with a particular focus on competitiveness, and priority reforms and investments. Based on this analysis, the Commission proposes country-specific recommendations (CSRs) to provide guidance to Member States on how to tackle those key challenges that are only partially or not addressed in Member States' RRPs.
The Commission assessed the existence of macroeconomic imbalances for the 12 Member States selected for in-depth reviews in the 2024 Alert Mechanism Report. Overall, after the big terms-of-trade shock of 2022, macroeconomic imbalances tended to ease in most Member States.
- France, Spain, and Portugal are no longer experiencing imbalances as vulnerabilities have overall declined.
- Greece and Italy are now found to be experiencing imbalances after experiencing excessive imbalances until last year as vulnerabilities have declined but remain a concern.
- Slovakia is now found to be experiencing imbalances. The vulnerabilities related to cost competitiveness, external balance, housing market and household debt have lingered, and policy action has not been forthcoming.
- Romania is now found to be experiencing excessive imbalances after experiencing imbalances until last year as vulnerabilities related to external accounts, mainly linked to large and increasing government deficits, remain, while significant price and cost pressures have increased and policy action has been weak.
- Germany, Cyprus, Hungary, the Netherlands, and Sweden continue to experience imbalances.
Questions and answers on the 2024 European Semester Spring Package