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.
The Dutch economy is emerging from recession with more supportive trends in disposable income and, albeit with a lag, employment. On the back of the improved economic outlook and several consolidation packages, the headline budget balance is set to improve substantially. As highlighted in the 2014 in-depth review presented by the Commission on 5 March 2014, the Netherlands continues to experience macroeconomic imbalances, which require monitoring and policy action. In particular, macroeconomic developments regarding private sector debt and ongoing deleveraging, coupled with remaining inefficiencies in the housing market, deserve attention.
The Netherlands has made some progress in implementing the 2013 country-specific recommendations. Substantial progress has been made in the area of public finances. Some progress has been made concerning the long-term sustainability of public finances and the labour market. By contrast, only limited progress has been made in response to the recommendation on the housing market. Further measures remain necessary in those areas.
The immediate policy challenge for the Netherlands is to restore confidence and foster growth while stabilising public finances and supporting continued balance-sheet adjustment at a measured pace. Within the fiscal constraints, measures to promote innovation and safeguard growth-enhancing expenditure are crucial for a balanced adjustment. Managing the transition in the housing market also represents an essential aspect of such a strategy. There remain considerable challenges when it comes to fiscal policy and the labour market. See how the Netherlands compares with other EU Member States in key areas.
2014 European Commission's recommendations in brief
The Commission has issued four country-specific recommendations to the Netherlands to help it improve its economic performance. These are in the areas of: public finances; housing market; pensions and long-term care; labour market and wage-setting.