The Commission sets out its views on the EU’s economic, fiscal and social priorities for the year ahead, building on the guidance from President Juncker‘s 2017 State of the Union address and on the latest economic data from the Commission’s Autumn 2017 Economic Forecast. The 2018 European Semester cycle of economic governance starts against the backdrop of robust economic activity in the euro area and the EU, record high employment rates and unemployment rates declining towards pre-crisis levels. As all Member States contribute to this strong growth momentum, the priority now is to make sure that this lasts and brings benefits to all members of our societies. Structural reforms should focus on creating the conditions to boost investments further and to increase real wage growth to support domestic demand.
Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue said: “For all the reforms of the past years, Europe’s Economic and Monetary Union (EMU) remains uncompleted. This is why we need to use good times now to further strengthen our EMU and make our economies more resilient and inclusive. Next month we will come forward with proposals to reinforce the EMU further. However, strengthening EMU architecture does not replace the need for sound budgetary, economic and social policies at national level. This is the main aim of the European Semester. Today we provide the Opinions on Draft Budgetary Plans and call on Member States that are at risk of non-compliance with the Stability and Growth Pact to take the necessary measures to adjust their budgetary path.”
Commissioner Marianne Thyssen, in charge of Employment, Social Affairs, Skills and Labour Mobility, welcomed today’s agreement and said: “Only days after the Social Summit and the proclamation of the European Pillar of Social Rights, we are presenting a European Semester that puts the Pillar into practice, for a renewed convergence towards better working and living conditions between and within Member States.”
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs said: “The euro area economy is growing at its fastest pace in ten years and its average deficit is set to fall below 1% of GDP next year, from over 6% in 2010. Yet several Member States continue to shoulder high levels of public debt, which constrain their ability to invest for the future. These countries should use this opportunity to further strengthen their public finances, also in structural terms, while those with fiscal space should use it to support investment for the benefit of their citizens.”
Economic growth is accelerating strongly, with the euro area economy on track to grow at its fastest pace in a decade this year. The good performance is propelled by resilient private consumption, robust growth around the world and falling unemployment rates. The economies of all Member States are expanding and their labour markets improving, but wages are rising only slowly. Investment is also picking up on the back of favourable financing conditions and considerably brightened economic sentiment as uncertainty has faded. The public finances of the euro area countries have improved considerably. With Member States in different stages of the economic cycle, today’s guidance stresses the need to strike the right balance between supporting the economic expansion and ensuring the sustainability of public finances, in particularly through reducing high debt levels.
