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Brussels urges speedy action to boost post-COVID recovery

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Brussels urges speedy action to boost post-COVID recovery

Valdis Dombrovskis - Photo EC

(BRUSSELS) - The EU Commission issued its autumn economic package Wednesday, aiming to steer EU economies into calmer waters after the COVID pandemic with policy guidance for Europe's collective recovery.

The Commission's autumn economic policy package includes Opinions on draft country budgetary plans (DBPs) for 2021 and policy recommendations for the euro area.

EC vice-president Valdis Dombrovskis urged the EU Member States to set out "ambitious policy agendas in their recovery and resilience plans, to the benefit of all."

"For Europe to bounce back as a competitive force on the world stage,", he added, "we need targeted and temporary fiscal support measures, as well as well-chosen reforms and investments that will drive a fair, inclusive and sustainable recovery. We now need a quick political agreement on the Recovery and Resilience Facility so that it can provide a financial anchor through this storm."

The assessment finds that DBPs are overall in line with Council recommendations of 20 July 2020. Most of the measures support economic activity against the background of considerable uncertainty. Some measures set out in the Draft Budgetary Plans of France, Italy, Lithuania and Slovakia do not appear to be temporary or matched by offsetting measures. Lithuania has submitted its Draft Budgetary Plan based on a no-policy-change scenario and is invited to submit an updated Draft Budgetary Plan.

For Belgium, France, Greece, Italy, Portugal and Spain, given the level of their government debt and high sustainability challenges in the medium-term before the outbreak of the COVID-19 pandemic, it is important to ensure that, when taking supporting budgetary measures, fiscal sustainability in the medium-term is preserved.

Romania has been under the excessive deficit procedure (EDP) since April 2020 due to the breach of the Treaty deficit threshold in 2019. In light of the continued high uncertainty due to the coronavirus pandemic, the Commission considers that no decision on further steps in Romania's excessive deficit procedure should be taken at this juncture. It will reassess Romania's budgetary situation in spring 2021.

The recommendation on the economic policy of the euro area presents tailored advice to euro area Member States on those topics that affect the functioning of the euro area as a whole. This year it also provides policy guidance on the priorities that euro area Member States should pursue in their Recovery and Resilience Plans. The recommendation calls on euro area Member States to make sure that their fiscal policies remain supportive in 2021. It also calls on Member States to reorient fiscal policies towards achieving prudent medium-term positions once epidemiological and economic conditions allow. It encourages Member States to strengthen national institutional frameworks and to implement priority reforms and investments that can make the euro area and its members more sustainable and resilient. Such reforms and investment measures should create the right conditions for the economic recovery consistent with the green and digital transitions. It also calls for the completion of the Economic and Monetary Union and to strengthen the international role of the euro.

European Semester Autumn 2021 Package: background guide

Communication on the 2021 Draft Budgetary Plans

Opinions on Draft Budgetary Plans

Euro area recommendation 2021

Alert Mechanism Report 2021

Proposal for a Joint Employment Report 2021

Communication on the fiscal situation in Romania

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