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European Semester in 2014

November 2014

Annual Growth Survey for 2015 by the European Commission 

In the Annual Growth Survey for 2015 the European Commission recommends that the EU's economic and social policy in 2015 be focused on three main priorities:

  • investment
  • structural reforms
  • fiscal responsibility

Investment  in the EU is needed to modernise welfare systems, fund education as well as research and innovation, make energy greener and more efficient, modernise transport infrastructure and to roll out far-reaching and faster broadband. To contribute to boosting investment, on 26 November the Commission presented a €315 billion investment plan for 2015-17. The plan, as well as a proposal for a decision to set up a European fund for strategic investments, will be discussed by the Council before it is presented for endorsement by the European Council. 

Structural reforms. At the EU level the Commission recommends deepening the single market, focusing on removing remaining regulatory and non-regulatory barriers across sectors such as energy, telecoms, transport and the single market for goods and services. 

Fiscal responsibility. The Commission recommends pursuing responsible and growth-friendly fiscal policies, in line with the Stability and Growth Pact and taking into account the situation in each member state.

Proposal for the joint employment report by the European Commission 

The report accompanies the annual growth survey. It reviews the employment situation in the EU and the reforms that member states have carried out in 2014 to create jobs and improve social protection systems. 

It also contains a scoreboard of indicators that measure socio-economic divergences across the EU. 

The report concluded that unemployment in the EU is slowly decreasing but remains high, with 24.6 million people (10.1%) being out of a job. Youth unemployment remains high, but shows signs of slow improvement.  

The report will be endorsed by the Council and then presented to the European Council.

Alert Mechanism Report 2015 by the European Commission 

The report shows that macroeconomic imbalances and their major social consequences in the EU remain a serious concern. Slow economic recovery and very low inflation are identified as obstacles to a more pronounced reduction of the imbalances and related macroeconomic risks. 

The Commission will carry out  further in-depth reviews in 16 member states: Belgium, Bulgaria, Germany, Ireland, Spain, France, Croatia, Italy, Hungary, the Netherlands, Portugal, Romania, Slovenia, Finland, Sweden and the United Kingdom.

June 2014

European Council endorses country-specific recommendations

The European Council endorsed the country-specific recommendations and thus concluded the 2014 European Semester. The EU member states are expected to follow these tailored recommendations when drafting their budgets and designing structural reforms as well as in employment and social policies, based on the principles of national ownership and social dialogue. In the European Council's view, implementation of recommendations is key to accelerating economic growth. 

Structural reforms that enhance growth and improve fiscal sustainability should be given particular attention. The leaders highlighted a number of steps that would bring about more growth and jobs. These include:

  • reducing the tax wedge on labour (the difference between the salary costs for the employer and the net salary that an employee receives)
  • reforming goods and services markets
  • reforming public administrations
  • improving the business and innovation environment
  • easing access to finance
  • improving the functioning of network industries (such as energy and telecoms)
  • reforming education

The Council and the European Commission will monitor the implementation and take action as required.

Country-specific recommendations for 2014

Cyprus and Greece are subject to macroeconomic adjustment programmes, so to avoid duplication there are no country-specific recommendations for these 2 countries.

Commission issues country-specific recommendations for 2014-2015

The Commission's 2014 country-specific recommendations focus on actions to boost growth and jobs, while maintaining sound public finances in a post-crisis economy. They review the progress achieved over 2013 and contain guidance on implementing national policies in 2014-2015.

The 2014 recommendations are addressed to 26 countries individually (all of the EU countries, except for Greece and Cyprus, which are implementing economic adjustment programmes) and to the euro area as a whole. 

The Commission concluded that economic growth is gradually returning in the EU, but that this growth remains uneven and fragile. It therefore encourages member states to continue implementing reforms. 

Improvements since 2013:

  • economic growth is returning
  • public finances across the EU are improving
  • implemented reforms in the countries most affected are delivering results
  • budget deficits are decreasing in a number of countries leading to a more balanced macroeconomic situation throughout the EU
  • the employment rate is expected to increase next year 

The Commission identified the main challenges for 2014 as follows:

  • tackling the high level of unemployment
  • shifting taxation away from labour to consumption and environmental taxes
  • boosting private investment
  • increasing the competitiveness of the economy through the implementation of structural reforms
  • continued reduction of public debt

The Commission has also recommended that the Council of the EU abrogates excessive deficit procedure (according to the Stability and Growth Pact) in the following 6 countries: Austria, Belgium, Czech Republic, Denmark, the Netherlands and Slovakia. These recommendations were adopted by the Economic and Financial Affairs Council on 20 July 2014. 

March 2014

Spring European Council

The European Council on 20-21 March adopted conclusions which contain strategic policy guidance to the member states relating to the European Semester. The leaders concluded that 2014 member states' national reform programmes and the stability and convergence programmes should address the issues identified in 2013 country-specific recommendations, as well as in the Commission's recent analysis of macroeconomic and fiscal imbalances, including its in-depth reviews.

Commission concludes in-depth reviews of 17 member states for macroeconomic imbalances

The Commission carried out in-depth reviews in Belgium, Bulgaria, Croatia, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Luxembourg, Malta, the Netherlands, Slovenia, Spain, Sweden and the United Kingdom .

It has identified imbalances in all of those countries, and concluded that Croatia, Italy and Slovenia have built up excessive imbalances. Spain has achieved a significant adjustment over the past year, which allows the Commission to conclude that its imbalances are no longer excessive, although substantial risks remain.

Main cross-country findings

The analysis shows that macroeconomic imbalances, which have been built up over many years, are gradually receding. Economic recovery is gaining ground, although challenges remain.

Among the challenges and vulnerabilities that are common to a number of member states, the Commission underlines the impact of  deleveraging on medium-term growth; the sustainability of private and public debt and of  external liabilities  in a context of very low inflation; the need to ensure an  adequate flow of credit to viable activities  in the vulnerable economies in a fragmented financial system; and the very high level of unemployment  in a number of countries.

The member states are expected to take the findings of the in-depth reviews and the fiscal forecasts into account in their national reform programmes and their stability and convergence programmes.

The member states where excessive imbalances have been identified are expected to set out a comprehensive and detailed policy response. The programmes are assessed in June 2014 to determine whether they provide  an adequate response to the challenges identified.

February 2014

Council conclusions on the annual growth survey for 2014

In its conclusions the Council broadly shares the Commission's analysis of the economic situation and policy challenges in the EU. It recalls the conclusions of the December 2013 European Council on the main areas for coordination of economic policies and reform.

The Commission's annual growth survey for 2014 takes stock of the economic and social situation in Europe and sets out broad policy priorities for the EU and its member states. The survey marks the starting point of the 2014 European Semester.

The Annual Growth Survey identifies the following five broad policy priorities for 2014:

  • pursuing differentiated growth-friendly fiscal consolidation and ensuring long-term sustainability of public finances
  • restoring lending to the economy
  • promoting sustainable and inclusive growth and jobs and competitiveness
  • tackling unemployment and the social consequences of the crisis
  • modernising public administration

Council conclusions on the 2014 alert mechanism report

The Council welcomes the progress made by member states in correcting both internal and external macroeconomic imbalances, in particular in relation to current account deficits, competitiveness, fiscal deficits and the financial sector, thus contributing to rebalancing within both the EU and the euro area.

Further progress is needed, however, to address imbalances that raise concerns about sustainability, including high public and private indebtedness, as well as high external debt levels.

The Commission's alert mechanism report for 2014 calls for in-depth reviews of the macroeconomic situation in the following countries: Belgium, Bulgaria, Croatia, Denmark, Finland, France, Germany, Hungary, Italy, Malta, Luxembourg, the Netherlands, Slovenia, Spain, Sweden and the United Kingdom.

November 2013

European Commission's annual growth survey for 2014

In the annual growth survey (AGS) for 2014, the European Commission recommends that the EU focus on the following 5 priority areas in 2014:

  • pursuing differentiated, growth-friendly fiscal consolidation
  • restoring lending to the economy
  • promoting growth and competitiveness for today and tomorrow
  • tackling unemployment and the social consequences of the crisis
  • modernising public administration

These medium-term priorities are the same as last year, but the survey recommends that their implementation be adapted to the changing economic and social circumstances. The survey also recommends concrete actions for each of the priority areas.

The top priority is considered to be building growth and competitiveness, while the key challenge is to build lasting recovery.

The survey also contains a review of the progress on the 5 priorities achieved by the EU in 2013.

In addition, the Commission has issued an overview of progress in implementing country-specific recommendations achieved by individual member states (the 'staff working document').

European Commission's alert mechanism report for 2014

The 2014 alert mechanism report (AMR) provides an overview of macroeconomic developments in the EU and identifies those EU countries where there could exist a risk for a macroeconomic imbalance. In such a case the Commission will carry out an 'in-depth review' to identify whether or not an imbalance exists and to analyse their potential causes. The results, if necessary,  will feed into recommendations for redressing such imbalances.

In 2014 the in-depth reviews will be carried out in the following countries: Belgium, Bulgaria, Croatia, Denmark, Finland, France, Germany, Hungary, Italy, Malta, Luxembourg, the Netherlands, Slovenia, Spain, Sweden and the United Kingdom.

Countries benefiting from official financial assistance are not subject to this exercise. For the 2014 procedure, those countries are Cyprus, Greece, Portugal and Romania.

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