The annual growth survey for 2016 proposes that the EU should maintain the same economic and social priorities as last year: re-launching investment, pursuing structural reforms and ensuring responsible public finance policies.
The 2016 alert mechanism report by the European Commission shows that the EU member states continue to make progress in correcting the macroeconomic imbalances identified in previous years. Vulnerabilities associated with high levels of debt remain a source of concern, and surpluses in a number of member states and in the euro area as a whole are likely to remain high over the next two years.
The Commission will carry out in-depth reviews of macroeconomic imbalances in 18 member states: Austria, Belgium, Bulgaria, Croatia, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, the Netherlands, Portugal, Romania, Slovenia, Spain, Sweden and the United Kingdom.
On 17 November 2015 the Presidency of the Council of the EU presented a roadmap for the 2016 European Semester to the General Affairs Council. The roadmap outlines all the main steps relating to the European Semester in 2016 and provides preliminary indications of the focus of upcoming discussions.
The roadmap covers two phases of the European Semester: the first part, with more details, goes up to the March 2016 European Council, and the second, more indicative, for the period between the European Council meetings in March and June 2016.
An updated roadmap will be presented in the spring of 2016.
On 14 July 2015, the Council adopted recommendations for member states' economic, employment and fiscal policies, as well as its opinions on them.
It also issued a recommendation on the economic policies of the euro area as a whole.
The Council also provided explanations in those cases where the text of a final recommendation differed from the draft version proposed by the Commission.
The recommendations were issued to 26 out of the EU's 28 member states. There are no recommendations for Cyprus and Greece, because their economic policies are monitored under macroeconomic adjustment programmes.
At the European Council on 26 June 2015 the leaders generally endorsed the country-specific recommendations.
The Ecofin Council confirmed draft country-specific recommendations and Council's opinions on the member states' economic and fiscal policies on 19 June 2015.
It also confirmed an agreement on the specific draft recommendation to the euro area as a whole. The Council also provided explanations in cases where its recommendations did not comply with the draft proposed by the Commission.
The country-specific recommendations and opinions are to be endorsed by the June European Council, before their legal adoption by the Ecofin Council on 14 July 2015.
At its meeting on 18 June 2015, EPSCO Council discussed employment and social policy aspects of the country-specific recommendations.
Despite the economy improving, ministers identified a number of challenges and risks, especially related to:
They also highlighted the need to strengthen the social dimension of the Economic and Monetary Union and said that employment and social considerations must be treated as a priority to guarantee the stability of the eurozone.
The European Commission issued draft Council recommendations for 26 member states and the euro area on 13 May 2015. The Council adopts the final version of the recommendations in July, following discussions at the Council and endorsement by the European Council.
The 2015 recommendations include boosting investment, implementing structural reforms, pursuing a balanced fiscal policy, improving employment policy and social protection.
In its conclusions, adopted at the Ecofin meeting on 7 May, the Council agreed with the European Commission's assessment that macroeconomic imbalances exist in 16 member states: Belgium, Bulgaria, Croatia, Finland, France, Germany, Hungary, Ireland, Italy, the Netherlands, Portugal, Romania, Slovenia, Spain, Sweden and the UK.
It also agreed that excessive imbalances exist in five member states: Bulgaria, Croatia, France, Italy and Portugal. The Commission will consider whether the macroeconomic imbalance procedure should be started for Croatia and France after having examined these countries' policy measures.
Imbalances in three euro area member states - Ireland, Slovenia and Spain - are considered to require decisive policy action.
Specific monitoring is planned in member states with excessive imbalances and imbalances that require decisive policy action. The Council asked the Commission to prepare the timing and content of such monitoring. (Monitoring in Spain and Portugal will be carried out under the post-programme surveillance to avoid duplication).
Imbalances in Slovenia are no longer considered to be excessive.
The Council underlined that policy action and structural reforms are needed in all member states, particularly those facing macroeconomic imbalances that are affecting the smooth functioning of the Economic and Monetary Union.
The European Commission published its in-depth reviews of macroeconomic situation in 16 member states which in 2015 alert mechanism report were identified as countries experiencing macroeconomic imbalances. (Cyprus and Greece are not subject to the in-depth reviews in the 2015 exercise).
The purpose of in-depth reviews is to examine further the nature of identified imbalances: to see whether they are excessive and require decisive policy action or whether they would warrant a recommendation by the Council to start an excessive imbalance procedure.
European Council, meeting on 19-20 March, endorsed the three priorities of the 2015 annual growth survey:
EU leaders invited the member states to reflect these priorities in their national reform programmes and in their stability or convergence programmes.
The Spring European Council concludes the first phase of the European Semester.
The General Affairs Council on 17 March discussed a synthesis report, which summarises various Council configurations' discussions and conclusions on the 2015 annual growth survey.
Council discussions on the European Semester took place in the context of key political initiatives in each sector, such as the creation of an energy union, the digital single market, and the implementation of the Investment plan for Europe.
Among other things, the report emphasizes the implementation of country specific recommendations as the most pressing issue within the European Semester.
The report will inform the European Semester discussions by the EU leaders in the March European Council.
The Council also took note of an updated roadmap for the 2015 Semester.
At their meeting on 9 March 2015, employment ministers adopted conclusions on the employment and social policy aspects of the 2015 European Semester, including on the joint employment report.
They highlighted the need to:
The conclusions contain a set of policy guidelines for each of these action areas.
The joint employment report, which is drafted by the Employment Committee and accompanies the annual growth survey, analyses the employment and social situation in the EU.
It highlights a number of actions to be taken:
The report will be used as a basis for discussion at the European Council in March.
The Council adopted conclusions on the Commission's annual growth survey and the alert mechanism report for 2015 on 17 February 2015.
The Council broadly shares the Commission's analysis of the economic situation and policy challenges in the EU. It agrees that the priority areas for EU and member states in 2015 should be:
• boosting investment
• renewing commitment to structural reforms
• exercising fiscal responsibility
The Council conclusions set policy guidelines for each of these objectives.
The Council also welcomes the Commission's suggestions to streamline the European Semester and underlines that this would result in increased political ownership, predictability, accountability and acceptance of the process. It would also lead to an improved implementation of the country-specific recommendations and a better comparability of results.
In its conclusions the Council took note that 16 member states will be subject to in-depth reviews of the macroeconomic situation. The aim of the reviews is to determine whether macroeconomic imbalances exist or risk emerging in these countries, and to identify their nature. The results are expected at the end of February 2015, together with the staff working documents in a single analytical document for each member state for the first time.
The Council invites member states to take into account the issues identified in the alert mechanism report while preparing their upcoming national reform programmes and stability or convergence programmes.