Dombrovskis – Moscovici- Photo EC
(BRUSSELS) – Spain and Portugal were given one more year to correct their excessive deficits after the European Commission published its Spring economic package Wednesday.
Both countries were under threat of sanctions for failing to correct their excessive deficits. However, this was not the right time, this was “not the right moment, economically or politically, to take this step”, according to Economic Affairs Commissioner Pierre Moscovici. He did, however, say the Commission would be revisiting its decision in early July.
Belgium, Finland and Italy were also put under caution by the Commission to “remain vigilant on their public debt levels, with a clear rendez-vous in the Autumn for Italy”. While Slovakia and Malta are made aware of the need to “deliver the fiscal effort required under the Preventive Arm (the same applies to Hungary outside the euro area).”
Ireland, Cyprus and Slovenia, however, were congratulated for the progress they achieved in restoring their public finances to health.
In its 2016 country-specific recommendations (CSRs), the Commission set out its economic policy guidance for individual Member States for the next 12 to 18 months. In addition to efforts already identified and ongoing at European level, this guidance focuses on priority reforms to strengthen the recovery of Member States’ economies by boosting investment, implementing structural reforms and pursuing fiscal responsibility.
The Commission this year proposed fewer recommendations with a focus on key economic and social priorities identified in its Annual Growth Survey 2016. It also provided more time and more opportunities to engage and communicate with Member States and stakeholders, “to strengthen national ownership”.
Euro Commissioner Valdis Dombrovskis said the economic package emphasised structural reforms needed to strengthen the EU’s economic recovery. “Modernising labour, product and service markets, making it easier to do business, for example by reforming public administration and making tax systems fairer and more efficient, would help open up more job and investment opportunities in the EU.”
On the fiscal side, the Commission reported that the aggregate deficit level in the euro area was set to fall to 1.9% this year, down from a peak of 6.1% in 2010, helped also by the ongoing recovery.
On reform, the Commission reported that while reforms are under way in most EU Members States, there were still ‘blockages’, which need to be removed in order “to create growth, investment and create jobs and opportunities in education, research and education.”
Further information:
Overview table of Member States in the European Semester
Country-specific recommendations 2016
