Verbatim report of proceedings

Wednesday, 24 February 2016 - Brussels

European Semester for economic policy coordination: Annual Growth Survey 2016 - European Semester for economic policy coordination: employment and social aspects in the Annual Growth Survey 2016 - Single Market governance within the European Semester 2016 (debate)

  Valdis Dombrovskis, Vice-President of the Commission. – Madam President, honourable Members, this morning the College of Commissioners held an orientation debate on the European semester, including country reports and developments in the macroeconomic imbalances procedure.

We will publish the country reports on Friday, and decisions in the context of the Macroeconomic Imbalances Procedure will be taken in the next few weeks. The country reports follow the policy guidance provided by the 2016 Annual Growth Survey and the recommendation on the euro area last November. The 2016 European Semester is more streamlined than in the past: it integrates the euro area and national dimension and puts stronger emphasis on employment and social performance, convergence and support from the European structural investment funds and technical assistance to the implementation of reforms.

This year we decided to streamline the Macroeconomic Imbalances Procedure, moving from six to four categories, namely: no imbalances; imbalances; excessive imbalances; and excessive imbalances within the corrective arm of the Macroeconomic Imbalances Procedure. To put country reports in a broader economic context: the EU economic recovery is still ongoing but risks have visibly increased over the past few months, with negative external developments starting to feed into European financial markets and confidence indicators. Unemployment has been falling, but it remains high in a number of countries, particularly unemployment among young people and long-term unemployment. The adjustment of macroeconomic imbalances has advanced but is far from complete. In particular, high levels of private and public debt still act as a drag on growth in many Member States. This situation must be seen as an incentive to redouble the efforts to implement policies that support growth and stability.

In this respect we have many good examples of reforms in our Member States but also see that progress is uneven across Member States and different sectors. Further progress can be made with the close involvement of national parliaments, social partners and other stakeholders in the design and implementation of reforms. It is necessary to strengthen the effectiveness and ownership of reform efforts in the Member States. Publication of the country reports earlier than in the past serves this goal. It provides more time to engage in an in-depth dialogue with Member States and key stakeholders before the Commission publishes country-specific recommendations.

The role of the European Parliament in the European Semester has evolved over time. Ways to strengthen it further are being explored in line with the Five Presidents’ Report on completing economic and monetary union and the communication of October 2015 on steps towards completing the EMU.

I am convinced that it is of the utmost importance to have an exchange of governance milestones like the country reports, and I am very much looking forward to discussing these with you. The findings of the country reports, the outcome of the Commission’s analysis of our exchanges as well as the stability and convergence programmes and national reform programmes will pave the way for the 2016 country-specific recommendations, which the Commission will issue in May.

Now to come specifically to the three reports we are discussing today, to start with the Stihler report. I would like to thank the rapporteur, Ms Stihler, and welcome the contribution of the European Parliament on single market governance as part of 2016 European Semester. Structural reforms are needed to facilitate the reallocation of resources across companies, sectors and regions in order to increase productivity and competitiveness. It is necessary to go further in the process of reform, setting the foundations for a more competitive and resilient European economy. This can be achieved through reforms such as opening the product and services markets that would boost the EU internal market, and through structural reforms to eliminate barriers to the free circulation of goods and services. The Commission is working to reduce the high number of restrictions in product and services markets in many EU Member States. Improving the functioning of these markets is essential to renew the economic fabric of the EU and to ensure that EU companies adopt and successfully integrate into the increasingly global value chains.

Now to move the Rodrigues report. I would like to thank Ms Rodrigues for this report and it concurs with the views of the Commission on a wide range of issues. The Commission welcomes the support for the 2016 Annual Growth Survey and for the priorities it identifies, as well as for the advanced timing and content of the recommendation of the euro area. The Commission shares the importance of making more effort at national level to implement structural reforms effectively. It also shares the need for close coordination to achieve more robust economic recovery, to support sound public finances and address macroeconomic imbalances. The emphasis on promoting convergence towards the best performers in the euro area is also at the core of the Commission’s work.

Finally to the Ribeiro report: once again, thank you to the rapporteur. The European labour market is showing some positive signs. Unemployment is still high in many Member States, but it is gradually decreasing. Employment is growing in most sectors and for all age groups. More young people are back in jobs or taking part in education and training. Our efforts to fight against youth unemployment are beginning to bear fruit. We are also seeing the first signs of divergences among the Member States starting to decrease. Because of the crisis, more people have fallen into poverty, but also we see some first signs of progress. The promotion of better social standards and upward social convergence within the EU is a priority. The European Pillar of Social Rights will be an important vehicle to restore social convergence.

The Commission is paying more attention to employment and social developments in the European Semester. First, the 2016 Annual Growth Survey package puts social fairness at the heart of economic recovery. Second, in line with a new start for a social dialogue, the involvement of social partners in the European Semester is strengthened throughout the consultations at EU and national level, and in addition, the new employment guidelines call on Member States to involve social partners in the design and implementation of the reforms. Third, the analysis of new employment indicators in the Macroeconomic Imbalances Procedure allows for a better understanding of the employment and social consequences of imbalances in some Member States.

Several Member States have pursued reforms in the labour market and there are visibly positive effects, not least through increasing employment rates. However, these reforms should be continued, to stimulate growth and to create a positive environment for the creation of quality jobs.

Once again Madam President, Madam Minister, honourable Members, thank you and I am looking forward to a productive debate.