The country-specific recommendations are documents prepared by the European Commission for each Member State, which analyse its economic situation and provide tailored policy advice on measures that it should adopt over the coming 18 months. They cover the particular challenges that the Member State is facing in a broad range of areas: the state of public finances, reforms of pension systems, measures to create jobs and to fight unemployment, education and innovation challenges, efficiency of the public administration, competition etc. The final adoption of country-specific recommendations prepared by the Commission takes place at the highest level by national leaders in the European Council.
After a severe recession translating into a deep contraction of economic activity between 2007 and 2013, the Italian economy is experiencing a slow recovery as of 2014. These developments should gradually lead to improvements on the labour market. In spite of these positive signals, the Italian economy is still faced with important challenges, which were exposed and exacerbated by the crisis. As highlighted in the 2014 in-depth review presented by the Commission on 5 March 2014, Italy is experiencing excessive macroeconomic imbalances, which require specific monitoring and strong policy action. In particular, the high public debt and weak external competitiveness on the back of sluggish productivity growth continue to weigh on the Italian economy.
Over the last year, Italy's response to the 2013 country-specific recommendations has been mixed and progress has been limited. On the fiscal side, the achievement of the medium-term objective has been postponed. Substantial progress to improve market conditions in the energy sector has been achieved. In addition, the steps to alleviate the tax burden on labour, improve the functioning of the labour market, foster firms' access to finance and improve the efficiency of the public administration go in the right direction but need to go further. Limited action has been taken in the other areas, which has led to a series of challenges becoming more pressing.
In particular, there remains scope for action to restore and sustain sound public finances, in line with the Stability and Growth Pact's requirements. The reform agenda also needs to be taken forward to address important bottlenecks to competitiveness and growth. Swift implementation of the measures adopted also remains an important challenge for Italy. See how Italy compares with other EU Member States in key areas.
2014 European Commission's recommendations in brief
The Commission has issued eight country specific recommendations to Italy to help it improve its economic performance. These are in the areas of: public finances; taxation; efficiency of the public administration; financial sector; labour market and social inclusion; education and training; competition in services; network industries.