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Priorities at EU level : the Annual Growth Survey

Annual Growth Survey 2014 – EU economic priorities

The Annual Growth Survey launches the European Semester by setting out the broad EU economic priorities for the year to come. It is the first step in the annual cycle.

The biggest challenge now facing Europe's economy is how to sustain the recovery that is now underway. This is the main message of the 2014 Annual Growth Survey pdf - 306 KB [306 KB] български (bg) čeština (cs) dansk (da) Deutsch (de) eesti keel (et) ελληνικά (el) español (es) français (fr) hrvatski (hr) italiano (it) latviešu valoda (lv) lietuvių kalba (lt) magyar (hu) Malti (mt) Nederlands (nl) polski (pl) português (pt) română (ro) slovenčina (sk) slovenščina (sl) suomi (fi) svenska (sv) adopted by the Commission. Its adoption kicks off the fourth European Semester of economic policy coordination in an environment where growth is beginning to return and Member States are making progress on correcting the imbalances that developed before the crisis. That is why the Commission maintains its balanced strategy for growth and jobs, and its focus on five main priorities over the coming year:

  1. 1. Pursuing differentiated, growth-friendly fiscal consolidation
  2. 2. Restoring lending to the economy
  3. 3. Promoting growth and competitiveness for today and tomorrow
  4. 4. Tackling unemployment and the social consequences of the crisis
  5. 5. Modernising public administration.

This year the AGS is also accompanied by a Staff Working Document pdf - 247 KB [247 KB] български (bg) čeština (cs) dansk (da) Deutsch (de) eesti keel (et) ελληνικά (el) español (es) français (fr) hrvatski (hr) italiano (it) latviešu valoda (lv) lietuvių kalba (lt) magyar (hu) Malti (mt) Nederlands (nl) polski (pl) português (pt) română (ro) slovenčina (sk) slovenščina (sl) suomi (fi) svenska (sv) assessing the implementation of previous country-specific recommendations, which are published by the Commission and endorsed by Member States each spring/summer.

The Semester process makes sure that Member States keep their budgetary and economic policies in line with their EU commitments (debt and deficit commitments under the Stability and Growth Pact, economic reform plans enshrined in their 2013 country-specific recommendations, and the long-term growth and jobs targets in the Europe 2020 strategy).

The Annual Growth Survey will feed into national economic and budgetary decisions, which Member States set out in Stability and Convergence Programmes (under the Stability and Growth Pact) and National Reform Programmes (under the Europe 2020 strategy) in April. These programmes form the basis for the European Commission's proposals for country-specific recommendations in May 2014, which are adopted by the Council.

For the first time this year, euro area countries have also sent their draft national budgets to the Commission for its opinion on how they fit with the countries' commitments. The Commission's assessments will soon be made public, and will be discussed by the Eurogroup.

Focus on employment and social policies

The draft Joint Employment Report pdf - 2 MB [2 MB] български (bg) čeština (cs) dansk (da) Deutsch (de) eesti keel (et) ελληνικά (el) español (es) français (fr) hrvatski (hr) italiano (it) latviešu valoda (lv) lietuvių kalba (lt) magyar (hu) Malti (mt) Nederlands (nl) polski (pl) português (pt) română (ro) slovenčina (sk) slovenščina (sl) suomi (fi) svenska (sv) , attached to the Annual Growth Survey, assesses the social and employment situation in the EU.

This year the report points out that there are some encouraging signs that unemployment has stopped growing. However it remains too high, which means that improving the resilience of labour markets and boosting job creation in fast-growing sectors are key employment priorities for the year to come.

This year, for the first time, the Joint Employment Report includes a scoreboard allowing for better and earlier identification of major employment and social problems. The Commission is also publishing the European social partners' views (Joint declaration pdf - 339 KB [339 KB] ,  ETUC pdf - 259 KB [259 KB] , BusinessEurope pdf - 262 KB [262 KB] , CEEP pdf - 87 KB [87 KB] , UEAPME pdf - 215 KB [215 KB] ).

Early warning on economic risks

The Alert Mechanism Report (AMR) screens EU economies for potential economic risks. It acts as an early warning system for imbalances such as housing booms or banking crises, indicating which countries warrant more in-depth analysis to determine whether imbalances exist.

The 2014 Alert Mechanism Report pdf - 308 KB [308 KB] български (bg) čeština (cs) dansk (da) Deutsch (de) eesti keel (et) ελληνικά (el) español (es) français (fr) hrvatski (hr) italiano (it) latviešu valoda (lv) lietuvių kalba (lt) magyar (hu) Malti (mt) Nederlands (nl) polski (pl) português (pt) română (ro) slovenčina (sk) slovenščina (sl) suomi (fi) svenska (sv) has found that Member States are making progress in correcting the imbalances that built up before the crisis. A number of Member States have reduced their deficits and achieved significant improvements in cost competitiveness but further progress is needed to reduce excessive debt and improve the net international investment position of the most indebted economies. The Alert Mechanism Report recommends an in-depth review of developments in 16 Member States, which have different challenges and potential risks that could spill over to the rest of the euro area and wider EU. The AMR does not prejudge the results of these reviews, which aim to assess whether imbalances exist, and whether previously identified imbalances persist or are being unwound.

Read about the changes to the Macroeconomic Imbalance Procedure scoreboard pdf - 2 MB [2 MB] and the Statistical Annex to the AMR pdf - 2 MB [2 MB] .

Boosting growth through the single market

The Single Market Integration Report analyses how the single market is functioning in key areas with the greatest growth potential, i.e. services, networks and digital economy. It points out where there may be gaps in implementation of common EU legislation in these areas.

The Commission’s second annual Report on Single Market Integration pdf - 653 KB [653 KB] Deutsch (de) français (fr) finds that while progress has been made in reforming the financial, digital and transport sectors, there is still work to be done to implement EU legislation on energy and services.

Budgetary surveillance during the European Semester

New rules for the euro area

Draft budget plans: Under new rules which came into force in 2013 (known as the Two Pack), euro area countries are required to submit draft budget plans to the Commission by 15 October each year, before they adopt their actual budgets.

- The European Commission has published its opinions on the 2014 plans submitted by 13 countries, giving an early signal of whether they are meeting their medium-term budgetary commitments.

- Based on the draft budget plans, the Commission has, for the first time, assessed the budgetary situation in the euro area as a whole (the Commission communication and its annex ).

Focus on structural reforms: The Two Pack rules provide for extra surveillance of euro area countries with excessive budget deficits (above 3% of GDP). The Commission has given its opinions on the Economic Partnership Programmes submitted by Spain, France, Malta, the Netherlands and Slovenia, which set out plans for structural reforms with a budgetary impact, designed to correct their deficits in a lasting way.

Next steps: The Commission's opinions are discussed by euro area finance ministers (the Eurogroup). In line with the new common budgetary timeline introduced by the Two-Pack, budgets have to be adopted by national parliaments by 31 December each year.

Following up the Excessive Deficit Procedure

All EU countries that breach the debt and deficit rules laid down in the Treaty are placed in the Excessive Deficit Procedure and subject to regular surveillance (every three or six months).

- The Commission has assessed the action taken by seven Member States that received new recommendations and deadlines on their deficits in June: Belgium, Spain, France, Malta, the Netherlands, Slovenia and Poland.

- The Commission has also sent reports to the Council assessing the reasons for an actual or forecast breach of the debt and deficit rules by Croatia, Lithuania and Finland.

Next steps: it is up to the Council to make a final decision on the action required in each case. The Commission continues with its surveillance of budgetary developments in all Member States throughout the year.

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