Employment, Social Affairs & Inclusion

News 02/06/2021

European Semester Spring Package: Paving the way for a strong and sustainable recovery

The European Commission has today presented the European Semester Spring Package, which focuses on providing fiscal guidance to Member States as they continue the process of gradually reopening their economies.

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This guidance aims to help Member States strengthen their economic recoveries, making the best possible use of the Recovery and Resilience Facility (RRF), the key instrument at the heart of NextGenerationEU. The European Semester has been adapted this year, given the links to Member States’ recovery and resilience plans, laying out the investments and reforms that the RRF will finance.

Fiscal policy guidance and the continued application of the general escape clause

The activation of the general escape clause of the Stability and Growth Pact in March 2020 allowed Member States to react swiftly and adopt emergency measures to mitigate the economic and social impact of the pandemic.

On March 3 2021, the Commission’s Communication on fiscal policy clarified that the decision to deactivate the general escape clause should be taken based on an overall assessment of the state of the economy based on quantitative criteria, with the level of economic activity in the EU compared to pre-crisis levels as the key quantitative criterion. On the basis of the Commission’s Spring 2021 Economic Forecast, the general escape clause will continue to be applied in 2022 and is expected to be deactivated as of 2023.

Fiscal policy needs to remain supportive in 2021 and 2022. Member States should avoid a premature withdrawal of support and make full use of the RRF funding. The implementation of investments and reforms within the RRF will help to support the economic recovery, foster higher potential growth and employment, reduce imbalances and improve public finances. In 2022, national fiscal policies should become increasingly differentiated, while all Member States should preserve investments to support the recovery. Once conditions allow, Member States should pursue policies to ensure fiscal sustainability in the medium term.

Employment Guidelines

Employment Guidelines set common priorities for national employment policies with a view to making them more inclusive and fair. The Guidelines, adopted in October 2020, were updated to integrate the environmental sustainability and digital dimensions, reflecting the Stronger Social Europe for Just Transitions Communication and integrating the UN Sustainable Development Goals (SDGs). They also addressed the consequences of the COVID-19 crisis, providing specific guidance aimed at mitigating the employment and social impact of the crisis.

Given their continued relevance, the Commission proposes to carry over the current Employment Guidelines to 2021, underlining the role of the new EU headline targets set with the European Pillar of Social Rights Action Plan and the policy guidance emerging from the Porto Social Summit.

Next steps

The Commission invites the Eurogroup and Council to discuss the package and endorse the guidance offered today. It looks forward to engaging in a constructive dialogue with the European Parliament on the contents of this package and each subsequent step in the European Semester cycle.

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