COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK 2020 European Semester: Country-specific recommendations
Date: 2020-05-20
Institutions: European Commission, Secretariat-General
Subjects: EU Member State, economic policy, economic recovery, economic reform, employment policy, epidemic, infectious disease, single market, stability pact, stability programme

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 20.5.2020  COM(2020) 500 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK  2020 European Semester: Country-specific recommendations  
 
 
INTRODUCTION  

The  European  Union  is  facing  an  unprecedented  economic  shock  resulting  from 
the  COVID-19  pandemic.  Healthcare  and  confinement  measures  and  the  consequent 
impacts on production, demand and trade have reduced economic activity and resulted 
in higher unemployment levels, a steep fall in company earnings, higher public deficits 
and widening disparities within and across Member States. 

A  strong  coordinated  European  economic  response  is  crucial.  It  is  necessary  to 
minimise 
the  crisis,  any 
fragmentation  of  the  Single  Market,  and  significant  economic  divergence  and 
imbalances within the EU.  

the  negative  economic  and  social  consequences  of 

Competitive  sustainability  as  presented  in  the  Annual  Sustainable  Growth 
Strategy is at the heart of Europe’s social market economy. Member States should 
continue  to  focus  on  the  four  dimensions  of  competitive  sustainability:  economic 
stability, 
sustainability  and  productivity  and 
competitiveness, as well as place specific emphasis on health. Such an economic agenda 
would  help  the  EU  and  its  Member  States  to  achieve  the  United  Nations  Sustainable 
Development Goals and be on track for climate neutrality in 2050. 

fairness,  environmental 

social 

Particularly in times of crisis, the Single Market has proven its value by ensuring 
that  essential  products,  services  and  workers  reach  those  in  need.  However,  its 
integrity has been seriously impaired by some national  measures aiming  at  containing 
the  spread  of  the  pandemic.  To  maximise  its  potential  for  the  economic  recovery,  the 
gradual lifting of the restrictions will have to go hand in hand with efforts to strengthen 
the Single Market and increase its resilience for the future.  

The European Semester is particularly necessary now, given the size of the shock 
and the unprecedented nature of the economic policy measures1 being adopted by 
Member  States.  Ensuring  effective  economic  policy  coordination  in  the  EU  is  of 
utmost  importance.  The  Semester  allows  Member  States  to  discuss  their  policies, 
exchange  best  practices  and  agree  on  a  common  way  forward,  in  line  with  the 
Commission  Communication  of  13  March  2020,  the  Roadmap  towards  a  European 
recovery of 24 April.  

This year’s Semester process reflects that Member States have to focus both on the 
immediate  measures  to  tackle  and  mitigate  the  socio-economic  impact  of  the 
pandemic  and  on  the  measures  to  restart  the  economic  activity  in  a  safe  way. 
Urgent priorities concern investment in health-related issues, income support to affected 
workers, liquidity to firms (in particular Small and Medium Enterprises) and measures 
to support a symmetric recovery and preserve the integrity of the Single Market.  

In  restarting  the  economy,  Member  States  should  concentrate  in  a  recovery 
strategy  that  sets  the  path  for  the  green  and  digital  transition  in  line  with  the 
European green deal. Moving towards a more sustainable economic model, enabled by 
digital  and  clean  technologies,  can  make  Europe  a  transformational  frontrunner.  A 
particular  focus  should  be  given  to  those  investment  projects  that  are  at  an  advanced 

1 https://ec.europa.eu/info/files/policy-measures-against-spread-coronavirus_en 

1 

 
                                                 
stage  of  development  and  could  be  front-loaded  with  the  support  of  the  various 
initiatives  of  the  EU  recovery  plan.  Moreover,  Member  States  will  have  to  address 
rising  inequalities  and  boost  physical  and  human  capital,  supported  by  growth 
enhancing investment and reforms. They should also protect the Single Market, secure 
resilient  and  sustainable  supply  chains  and  continue  promoting  free  and  fair  trade 
worldwide. The world  economic outlook is  deteriorating. This  will have an impact  on 
the EU economy and maintaining trade openness in a reciprocal manner would support 
the  recovery.  Finally,  in  a  more  challenging  context,  Member  States  should  ensure 
macroeconomic stability. With the unprecedented economic policy measures adopted at 
national  level  and  the  increased  role  of  the  public  sector  in  the  economy,  effective 
public  administration  and  the  fight  against  corruption  and  tax  evasion  will  play  an 
important role.  

1.  ECONOMIC OUTLOOK 

Despite  the  swift  and  comprehensive  policy  response  at  both  EU  and  national 
levels, the EU economy is expected to experience a recession of historic proportions 
this  year.    The  Spring  2020  Economic  Forecast  projects  that  the  EU  economy  will 
contract  by  a  record  7.5%  in  2020  before  rebounding  by  6%  in  2021,  around  nine 
percentage  points  lower  compared  to  the  autumn  2019  Economic  Forecast.  The 
pandemic and related confinement measures have severely affected consumer spending, 
industrial  output,  investment,  trade,  capital  flows  and  supply  chains.  The  potential 
easing of confinement measures in the coming months should set the stage for a solid 
recovery.  However,  the  EU  economy  is  currently  not  projected  to  fully  make  up  this 
year’s  losses  by  the  end  of  2021,  with  uncertainty  and  risks  to  the  economic  outlook 
being very high. 

While the pandemic has hit all Member States, economic consequences differ. The 
shock to the EU economy is symmetric in that the pandemic has hit all Member States, 
but both the drop in output in 2020 (from -4.2% in Poland to -9.7% in Greece) and the 
strength of the rebound in 2021 are set to differ markedly across Member States. Each 
Member  State’s  economic  recovery  will  depend  not  only  on  the  evolution  of  the 
pandemic in that country, but also on the resilience and structure of their economies and 
their  capacity  to  respond  with  stabilising  policies.  Given  the  interdependence  of  EU 
economies,  the  dynamics  of  the  recovery  in  each  Member  State  will  also  affect  the 
strength of the recovery of other Member States.   

A  coordinated  response  is  necessary.  Limiting  economic  damage  ensuring  adequate 
health  protection  and  facilitating  a  swift,  robust  recovery  to  set  the  economies  on  the 
path  of  sustainable  and  inclusive  growth  will  depend  crucially  on  the  continued 
effectiveness  of  EU  and  national  policy  measures.  Healthcare  and  civil  protection 
measures  are  crucial  for  the  safe  opening  of  the  economies  and  deserve  particular 
attention. The economic rebound in 2021 will depend to a great extent on the ability of 
Member  States  to  restart  economic  activity  safely  and  durably,  by  implementing  the 
necessary testing, tracing and other health protection measures. 

While  short-time  work  schemes,  wage  subsidies  and  support  for  businesses  will 
limit job losses, the pandemic will have a severe impact on the labour market. The 
unemployment rate in the EU is forecast to rise from 6.7% in 2019 to 9% in 2020 and 
then fall to around 8% in 2021. Some Member States will see more significant increases 

2 

 
in  unemployment  than  others,  as  a  large  proportion  of  the  workforce  dependent  on 
sectors such as tourism are particularly vulnerable.  

Member States have reacted decisively with fiscal measures  to limit the economic 
damage  caused  by  the  pandemic.  ‘Automatic  stabilisers’,  such  as  social  security 
benefit  payments  compounded  by  discretionary  fiscal  measures  will 
increase 
government  spending.  As  a  result,  the  aggregate  government  fiscal  deficit  of  the  euro 
area and the EU is expected to surge from just 0.6% of GDP in 2019 to around 8½% in 
2020,  before  falling  back  to  around  3½%  in  2021.  After  having  been  on  a  declining 
trend  since  2014,  the  public  debt-to-GDP  ratio  is  also  set  to  rise  as  a  result  of  a 
combination of higher debt and lower GDP. In the euro area, it is forecast to increase 
from 86% in 2019 to 102¾% in 2020 and to decrease to 98¾% in 2021. In the EU, it is 
forecast to rise from 79.4% in 2019 to around 95% this year before decreasing to 92% 
next year.  

The  crisis  will  have  a  significant  impact  on  social  conditions,  in  particular  for 
vulnerable groups. It’s a priority to mitigate the social impacts and avoid a permanent 
rise in poverty and inequalities. Present and future measures need to protect all workers. 
Those  who  were  already  vulnerable  prior  to  the  crisis  (such  as  workers  on  temporary 
contracts,  the  low-skilled,  the  involuntary  part-time  and  self-employed,  and  migrant 
workers) are likely to be hit hardest, also through unequal access to digital infrastructure 
and  skills.  Recognising  that  many  workers  in  essential  occupations  in  the  frontline 
response  to  the  COVID-19  pandemic  also  belong  to  these  vulnerable  categories  is 
important to respond to their specific needs.  

The  current  situation  also  entails  a  risk  of  widening  economic  and  social 
differences,  including  regional  and  territorial  disparities  across  and  within 
Member States. Demand shifts and the capacity of the corporate sector to rebound will 
asymmetrically affect regions and territories within Member States due to their different 
sectoral specialisation. Services that require direct contact with consumers are expected 
to  suffer  the  most,  notably  through  reduced  turnover  and  employment  in  SMEs. 
Member  States  with  significant  fiscal  space  can  afford  to  provide more  generous  and 
long-lasting support to business and households than those with less fiscal space. They 
will  also  be  better  placed  to  absorb  the  higher  government  deficits  and  debt  levels, 
amidst  increased  urgency  in  ensuring  quality  healthcare  and  lasting  social  welfare 
provision  for  those  affected.  More  generally,  Member  States  will  face  differences  in 
their ability to finance the investment necessary to restart their economies and to finance 
the green and digital transitions. These differences could lead to a distortion of the level 
playing field of the Single Market and increased divergence in living standards.  

3 

 
 
Box  1:  Update  on  surveillance  under  the  Stability  and  Growth  Pact  in  the  context  of  the 
General Escape Clause 

As the gravity of the economic downturn likely  to  result from  the COVID-19 outbreak became 
apparent,  the  Commission  considered  in  its  Communication  of  20  March  2020  that  the  current 
conditions permit the activation of the general escape clause. The general escape clause does not 
suspend the procedures of the Stability and Growth Pact. It allows Member States to depart from 
the  budgetary  requirements  that  would  normally  apply  while  enabling  the  Commission  and  the 
Council  to  undertake  the  necessary  policy  coordination  measures  within  the  framework  of  the 
Pact. 

In parallel to the assessment of the 2020 Stability and Convergence Programmes, the Commission 
has taken a number of steps under the Stability and Growth Pact. 

The  Commission  has  adopted  reports  under  Article  126(3)  TFEU  for  all  Member  States  except 
Romania, which is already in the corrective arm of the Pact. These reports assess Member States’ 
compliance with the deficit criterion in 2020, based on their plans or on the Commission’s spring 
2020 forecast. In addition, the reports for France, Belgium, Cyprus, Greece, Italy and Spain also 
assess compliance with the debt criterion in 2019 based on outturn data. The reports examine all 
the  relevant  factors  and  take  into  account  the  large  and  uncertain  macroeconomic  and  fiscal 
impact of the outbreak of COVID-19. 

The outbreak of COVID-19 has had an extraordinary macroeconomic and fiscal impact, which is 
still  unfolding.  This  creates  exceptional  uncertainty,  including  for  designing  a  credible  path  for 
fiscal  policy,  which  will  have  to  maintain  a  supportive  stance  to  close  the  output  gap  whilst 
ensuring  the  sustainability  of  public  debt  and  eventually  correcting  the  excessive  deficit.  In  the 
light  of  this  situation,  the  Commission  considers  that  at  this  juncture  a  decision  on  whether  to 
place Member States under EDP should not be taken. 

Romania is the only Member State already under an excessive deficit procedure. On 3 April 2020 
the Council decided that an excessive deficit exists in Romania and recommended Romania to put 
an end to the present excessive deficit situation by 2022 at the latest. The Council established the 
deadline  of  15  September  2020  for  Romania  to  take  effective  action  and  to  report  in  detail  the 
consolidation strategy that is envisaged to achieve the targets. 

The  Commission  will  reassess  Member  States’  budgetary  situation  on  the  basis  of  the  autumn 
2020  Economic  Forecast,  and  the  Draft  Budgetary  Plans  to  be  submitted  by  euro  area  Member 
States by 15 October. 

2.  KEY OBJECTIVES OF THE 2021 RECOMMENDATIONS   

Today's recommendations reflect the new socio-economic reality of the COVID-19 
crisis. The present Semester exercise is structured around two dimensions to encourage 
the Member States to further strengthen the resilience of their economies2: 

2   Some  relevant  structural  issues  appear  this  year  in  the  recitals.  These  are  issues  with  important 
structural effects in the  medium  term  which remain relevant and  will progressively  gain importance 
with the recovery. 

4 

 
 
                                                 
  Providing an immediate economic policy response to tackle and mitigate the 
health  and  socio-economic  impact  of  the  Covid-19  (short-term).  Those 
priorities  entail  preserving  employment  and  ensuring  income  support  to  the 
affected workers, public spending on health, liquidity measures to the corporate 
sector  (in  particular  to  small  and  medium-size  enterprises)  and  protecting  the 
flow  of  essential  goods  in  the  internal  market.  The  fiscal  elements  of  the 
country-specific  recommendations  reflect  the  activation  of  the  general  escape 
clause in the Stability and Growth Pact. 

  Restarting  the  economic  activity  and  putting  growth  back  on  track, 
fostering  the  green  transition  and  the  digital  transformation  (short  to 
medium-term). It will be important to focus on how to “revitalise” the economy 
once the immediate acute impact of the pandemic is contained. A more effective 
and stronger welfare state, active labour market policies and skills development 
will be necessary. The country reports can provide input on the areas for future 
growth once the exceptional circumstances (e.g. confinement ) are over. 

The  framework  presented  in  the  Annual  Sustainable  Growth  Strategy3  around  the 
concept  of  “Competitive  Sustainability”  with  its  focus  on  economic  stability,  social 
fairness,  environmental  sustainability  and  productivity  and  competitiveness,  should 
guide  the  recovery.  The  recommendations  issued  today  to  Member  States  cover  these 
four dimensions. 

The  pandemic  underlines  the 
interconnectedness  of  economic,  social  and 
environmental  spheres  and  the  need  for  a  holistic  strategy  to  recovery.  For  this 
reason, the integration of the United Nations’ Sustainable Development Goals (SDG) in 
the European Semester of economic policy coordination is even more important than it 
was before. All country-specific recommendations apply to both structural reforms and 
investments.  The  2019  country-specific  recommendations  remain  relevant  and  should 
be taken into account for the EU funds, in particular for cohesion policy. The European 
Semester  will  help  to  bring  to  the  forefront  of  the  policy  agenda  SDG-relevant 
challenges  and  policy  recommendations,  which  can  contribute  to  a  sustainable 
economy,  in  line  with  the  European  Green  Deal  and  the  Annual  Sustainable  Growth 
Strategy. 

Monitoring the effective capacity of Member States to provide effective response to 
the crisis is an essential element of this years’ refocused Semester.  

3    COM/2019/650 final 

5 

 
 
 
 
                                                 
The COVID-19 crisis has affected the functioning of the Single Market for goods, 
provoking border closures and affecting exports. National restrictions on exports of 
key  products  to  fight  the  pandemic,  such  as  personal  protective  equipment,  masks, 
ventilators  and  medicines  undermine  the  common  struggle  against  the  pandemic. 
Although many Members States eventually lifted their restrictions at the Commission’s 
behest,  remaining  unjustified  and  unnecessary  restrictions  in  some  countries  may 
exacerbate disruptions of the supply chain, price increases and shortages of goods. To 
cover  the  needs,  initiatives  have  been  taken  to  increase  both  local  production  and 
imports  from  third  countries.  Given  the  urgency  of  the  situation,  the  Single  Market 
needs  to  be  protected  from  non-compliant  products.  The  role  of  Market  Surveillance 
Authorities and Customs Authorities remains crucial. 

The  Single  Market  will  benefit  from  well-functioning  supply  chains,  both  within 
the EU and globally. Reflecting the global nature of supply chains, not least for critical 
goods (including medical  supplies) and the EU’s commitment to the green and digital 
transition, a particular focus should be placed on their resilience and sustainability while 
diversifying  our  supply  chains  and  increasing  the  EU’s  capacity  to  produce  critical 
goods.  

The  functioning  of  the  Single  Market  in  services  is  exposed  to  disproportionate 
regulatory restrictions, particularly in retail and construction. Overall the services 
sector  is  the  sector  hardest  hit  by  the  crisis  due  to  the  collapse  in  demand  and  to  the 
confinement  measures  that  prevent  many  businesses  from  functioning.  It  is  also  the 
sector  with  the  largest  potential  for  recovery.  Reducing  regulatory  and  administrative 
barriers will be crucial. Additional flexibility in national regulation of the most affected 
sectors,  such  as  retail,  tourism,  culture  and  ‘Horeca’  (hospitality)  would  help  them  to 
rebound.  

6 

 
 
The  COVID-19  pandemic  has  led  many  Member  States  to  implement  measures 
with far-reaching implications for movement of people both within a country and 
across  borders.  Almost  all  Member  States  introduced  temporary  internal  border 
controls.  In addition, non-essential travel restrictions have been applied at the external 
borders  of  the  Union.  Closures  of  internal  EU  borders  have  a  negative  effect  in 
particular on workers who need to cross into another Member State to reach their place 
of work. This concerns frontier workers but also posted or seasonal workers. To address 
the  serious  problems  caused  by  the  introduction  of  internal  border  controls  and  travel 
restrictions,  and  to  limit  the  impacts  on  the  functioning  of  the  internal  market,  the 
Commission provided coordination and guidance at EU level4. 

2.1 Stability 

Surveillance  under  the  Macroeconomic  Imbalance  Procedure  is  of  the  utmost 
importance5.  This  year’s  recommendations  take  into  account  the  need  to  tackle  the 
pandemic  and  facilitate  the  economic  recovery  as  an  important  step  to  prevent  new 
imbalances  from  emerging 
to  address 
vulnerabilities  as  well  as  structural  challenges.  Specific  monitoring  under  the 
to  follow  up  on  policy 
macroeconomic 
developments in relevant areas. Macroeconomic developments across the EU will be re-
assessed in the next Alert Mechanism Report. 

imbalance  procedure  will  continue 

the  future.  Recommendations  aim 

in 

Departing from its declining trend since 2015, the government debt is expected to 
increase sharply in 2020. Using the full fiscal flexibility allowed in the EU framework, 
Member States have adopted wide-ranging measures to increase the capacity of health 
systems  and  provide  relief  to  those  citizens  and  sectors  that  are  particularly  affected. 
These  measures,  coupled  with  a  fall  in  economic  activity  and  low  inflation,  will 
contribute  to  substantially  higher  general  government  deficits  and  debt  in  2020.  In 
addition,  Member States are providing significant  liquidity support measures and loan 
guarantees, entailing contingent liabilities for governments. 

The fiscal elements of the country-specific recommendations reflect the activation 
of  the  general  escape  clause,  recommending  to  take  all  necessary  measures  to 
effectively  address  the  pandemic,  sustain  the  economy  and  support  the  ensuing 
recovery.  When  economic  conditions  allow,  fiscal  policies  should  aim  at  achieving 
prudent medium term fiscal positions and ensuring debt sustainability, while enhancing 
investment. 

The  unprecedented  activation  of  the  general  escape  clause  facilitates  the 
coordination  of  budgetary  policies  during  this  severe  economic  downturn.  An 
expected  severe  economic  downturn  resulting  from  the  COVID-19  outbreak  led  the 

4   COVID-19 - Guidelines for border management measures to protect health and ensure the availability 
of  goods  and  essential  services,  COM(2020)  1752;  Guidelines  concerning  the  exercise  of  the  free 
movement  of  workers  during  the  COVID-19-outbreak,  C(2020)  2051.  For  an  overview  of  all 
guidelines, 
https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-
to 
response/travel-and-transportation-during-coronavirus-pandemic_en 

please 

refer 

5 

 In February, three countries were identified with excessive imbalances (Greece, Cyprus and Italy) and 
nine  countries  with  imbalances  (Croatia,  France,  Germany,  Ireland,  Portugal,  the  Netherlands, 
Romania Spain and Sweden). 

7 

 
                                                 
Commission to conclude that the current conditions warrant the activation of the general 
escape clause. The Finance Ministers of the Member States agreed with that assessment. 
The general escape clause does not suspend the procedures of the Stability and Growth 
Pact.  It  allows  the  Commission  and  the  Council  to  undertake  the  necessary  policy 
coordination  measures  within  the  framework  of  the  Pact,  while  departing  from  the 
budgetary  requirements  that  would  normally  apply.  Specifically,  it  allows  a  Member 
State  to  temporarily  depart  from  the  adjustment  path  towards  the  medium-term 
budgetary  objective,  provided  that  this  does  not  endanger  fiscal  sustainability  in  the 
medium term.  

The fiscal guidance in the spring package aims to coordinate fiscal policies in the 
immediate crisis phase as well as during the economic recovery phase. In order to 
facilitate the recovery, a supportive fiscal  stance is  currently warranted in all Member 
States.  In  parallel,  fiscal  sustainability  in  the  medium  term  should  continue  to  be 
safeguarded.  In  particular,  it  should  be  ensured  that,  when  economic  conditions  will 
allow,  Member  States  pursue  fiscal  policies  to  achieve  prudent  medium-term  fiscal 
positions and ensure debt sustainability.  

Member  States  should  also  pay  attention  to  the  quality  of  public  finances  at  a 
moment of unprecedented fiscal packages, with  the right prioritisation regarding 
investment  and  productive  expenditure.  Moreover,  with  the  unprecedented  fiscal 
packages  adopted  in  Member  States  and  the  subsequent  increased  role  of  the  public 
sector in the economy, it is very important for the public administrations to be effective 
and efficient. Going forward, those Member States ensuring a sound financial handling 
of  public  finances  will  rebound  quicker  from  the  crisis.  Public  expenditure  and 
investment  are important  to  support the green and digital  transition,  including through 
green and digital public procurement and green budgeting.  

With  the  outbreak  of  the  Covid-19  epidemic,  global  financial  markets  have 
experienced  severe  downward  price  corrections  and  increased  volatility.  Equity, 
fixed  income  as  well  as  commodity  markets  have  been  negatively  impacted  from  the 
deteriorating  economic  conditions  and  the  higher  uncertainty.  Notwithstanding,  the 
functioning of markets as well as financial institutions has been fully preserved so far. 
Public policy and the actions of the European Central Bank (ECB) and other monetary 
authorities across the globe have been important to cushion this impact.  The ECB has 
made  EUR  1  trillion  (8.5%  of  euro  area  GDP)  of  liquidity  available  through  various 
instruments,  including  its  Pandemic  Emergency  Purchase  Programme  for  government 
and corporate bonds.  

Risks  of  money  laundering  remain  prevalent.  Money  laundering  has  negative 
consequences  regarding  public  finances  and  financial  stability  and  poses  particular 
risks. In addition to the Member States (Bulgaria, Denmark, Estonia, Latvia, Malta and 
Sweden)  that  received  a  recommendation  to  step  up  anti-money  laundering  regulation 
and  supervision  already  last  year,  five  more  (Ireland,  Luxembourg,  Netherlands, 
Slovakia, Finland) were added this year.  

Banks play an important role to keep liquidity flowing to the real economy. Amidst 
a  deteriorating  economy,  the  European  Commission,  the  ECB,  the  European  Banking 
Authority and the Single Supervisory Mechanism have taken exceptional measures for 
banks to finance households  and firms to  confront the loss in revenues. Banks will be 
allowed  to  operate  below  Pillar  2  Guidance  for  capital  adequacy  and  Member  States 

8 

 
released the countercyclical and systemic risk capital buffers, where they were in place, 
to  be  in  a  better  position  to  absorb  losses  and  support  the  recovery  with  credit.  It  is 
important that financial support is given to borrowers that were essentially viable before 
the outbreak of the crisis.  The current  recession  will test the resilience of the banking 
sector, as the successes obtained in cleaning banks’ balance sheets may be reversed and 
other challenges, such as low profitability, may also become more visible. 

Box 2: Summary of the measures Member States adopted to support most affected 
workers and SMEs (liquidity support) 

In  response  to  the  COVID-19  pandemic,  Member  States  have  taken,  extended  or 
announced  unprecedented  measures  to  provide  relief  to  those  citizens  and  sectors  that 
are particularly impacted. While the measures have been adapted to the country-specific 
situation, overall, they all have the same objective: to mitigate the impact of the crisis 
by  protecting  jobs  and  incomes  of  individuals  and  providing  liquidity  support  to 
companies, in particular small and medium-sized enterprises (SMEs). 

To  support  workers,  many  Member  States  have  extended,  and  in  some  cases  created, 
their  short-time  work  or  temporary  unemployment  schemes  by  topping  up  allowances 
and/or  easing  eligibility  conditions.  Those  schemes  allow  firms  under  economic 
difficulties  to  reduce  the  hours  worked  or  to  temporarily  suspend  workers,  while 
employees are (partially) compensated via public income support. Such measures help 
to  prevent  permanent  lay-offs,  ensure  stable  incomes  and  protect  citizens.  Many 
Member States have extended such measures to also compensate the self-employed for 
the shortfall in their income. Some Member States have also taken measures to prevent 
the termination of rental contracts and rent increases during the pandemic. 

To  further  mitigate  economic  shocks  and  save  businesses,  the  European  Commission 
has adopted a Temporary Framework enabling Member States to use the full flexibility 
under EU State Aid rules. Moreover, Member States provide sizeable liquidity support 
to companies through subsidised loans and State guarantees.  

Many Member States allow the self-employed or SMEs to delay their tax payments or 
social  security  contributions.  In  addition,  tax  prepayments  have  been  reduced  or  tax 
credits refunded in advance to provide additional liquidity. Some Member States have 
introduced  a  temporary  public  moratorium  on  private  and  corporate  loan  repayment 
under certain conditions, including loans to self-employed and SMEs. 

To support the Member States in their effort the EU has put in place important measures 
to  immediately mobilise all non-utilised resources  from  the EU funds, providing them 
with  additional  flexibility,  as  well  as  simplified  and  streamlined  procedures  and  the 
possibility to benefit from a 100% co-financing rate from the Union budget in the 2020-
2021 accounting year6 

6  COM/2020/113 final  

9 

 
                                                 
 
2.2 Fairness  

The  COVID-19  crisis  is  having  a  major  impact  on  labour  market  and  social 
conditions. It hit when labour markets were improving. The employment rate peaked at 
above  74%  at  the  end  of  2019  and  the  share  of  people  at  risk  of  poverty  and  social 
exclusion reached its lowest level in the decade, although divergences persisted across 
countries.  

The current crisis is expected to increase significantly unemployment and income 
inequalities.  Unemployment  is  set  to  rise  unevenly  across  sectors  and  groups  of 
population.  The  demographic  situation  in  Member  States  and  in  their  labour  markets 
should also be considered in particular with regard to ageing. The persistent limitations 
to mobility are set to have an impact on working conditions, learning and training and 
access  to  services.  Vulnerable  groups  must  not  be  left  behind  in  a  context  where 
inequalities  are  starkly  revealed  and  even  exacerbated.  The  recovery  must  also  be 
gender-sensitive  and  alleviate  the  disproportionate  impact  the  crisis  has  on  women, 
which comes on top of existing disparities. The three dimensions of the European Pillar 
of Social Rights – i.e. equal opportunities, fair working conditions and access to social 
protection –remain the compass for policy action at the EU and Member State level. 

Member States are undertaking extraordinary efforts to mitigate the employment 
and social impact. A majority of Member States have activated and extended the scope 
of  existing  short-time  work  schemes,  while  others  have  introduced  similar  schemes. 
Most Member States also created or expanded guarantee schemes to provide liquidity to 
SMEs,  protecting  jobs  and  business  continuity.  Supporting  firms  and  workers  in  this 
and  similar  ways  will  play  a  key  role  in  preserving  jobs.  Their  financing  is  being 
supported by the use of European Structural and Investment Funds, and through the new 
instrument  for  temporary  Support  to  mitigate  Unemployment  Risks  in  an  Emergency 
(SURE) of up to EUR 100 billion proposed by the Commission in early April. The new 
EU  instrument  will  provide  financial  assistance  to  Member  States  to  help  cover  the 
costs related to national short-time work schemes and other similar measures targeted to 
the  self-employed.  Flexible  working  arrangements  and  tele-working  also  play  an 
important role in preserving jobs and production. They are also key to supporting better 
work-life balance.  

While it will not be possible to save all jobs, the recovery will also bring along new 
opportunities.  Member  States  should  support  these  structural  changes.  On  one  hand, 
the  rise  in  unemployment  is  putting  pressure  on  unemployment  benefit  systems.  The 
coverage and duration have been extended in many countries. It is of utmost importance 
to  provide  adequate  unemployment  benefits  and  income  replacement  to  all  workers, 
irrespective of their employment status, also paying due attention to the self-employed. 
On  the  other  hand,  effective  active  labour  market  policies  will  be  needed  to  support 
people  in  finding  appropriate  jobs  during  the  recovery,  with  a  particular  attention  to 
young people, long-term unemployed and vulnerable groups. Structural change should 
also  be  encouraged  through  actions  to  promote  innovative  forms  of  work  and 
entrepreneurship,  including  social  economy.  Finally,  a  meaningful  involvement  of 
social partners will be crucial for the success of any exit and recovery strategy. 

In  spite  of  unprecedented  economic  stabilisation  measures  being  put  in  place, 
many  people  are  likely  to  find  themselves  in  a  precarious  income  situation. 
Prolonged  income  losses  can  be  expected  to  increase  poverty  risks,  notably  for 

10 

 
vulnerable households thereby increasing inequalities in access to healthcare, essential 
social  services  and  support  and  distance  learning.  Some  groups  in  particular  families 
with children, the long-term unemployed, people with disabilities, migrants and persons 
with  a  migrant  background  and  Roma  are  relatively  more  exposed.  Existing  income 
inequalities are likely to be exacerbated. Under these circumstances, it is vital that social 
protection systems are swiftly adapted by improving their coverage and adequacy where 
needed.  This  may 
include  extending  benefit  duration  and  relaxing  eligibility 
requirements where possible. Member States will also need to increase the efficiency of 
social  spending  by  ensuring  it  reaches  those  more  in  need  through  adequate  means 
testing.  Access  to  social  services  and  essential  services  (including  water,  sanitation, 
energy and digital communication) should be ensured to all.  

Cooperation between social services, healthcare and long-term care may need to be 
reinforced.  To  protect  households  that  are  overburdened  by  housing  costs,  short-term 
measures  may  include  temporarily  suspending  evictions  and  foreclosures  or  deferring 
payments  of  mortgages  and  rent  for  low-income  families  during  the  crisis,  while 
preserving  financial  stability  and  repayment  incentives  over  the  medium-term.  The 
national  provisions  transposing  EU  rules  on  safety  and  health  at  work  need  to  be 
applied,  in  line  with  the  practical  Guidance  on  workers  safe  return  to  the  workplace7 
made available by the EU.  

Box 3: Health care 

The COVID-19 crisis has put Member States’ health systems under unprecedented 
stress.  The  immediate  response  included  measures  to  increase  the  supply  of  critical 
medical products, to enlarge laboratory capacity and hospitals’ intensive care units and 
to recruit, where possible, additional health workers.  

Overall,  it  has  exacerbated  existing  structural  challenges  related  to  effectiveness, 
accessibility and resilience of health systems. These relate for instance to insufficient 
financing  for  health  investments  (including  for  crisis  preparedness  and  response), 
limited coordination and integration of care, weak primary care, persisting obstacles to 
access  to  healthcare  and  unmet  needs  for  medical  care,  in  particular  for  the  most 
vulnerable,  notably  because  of  high  out-of-pocket  payments.  The  crisis  has  put 
additional  strain  on  health  systems’  revenues,  which  risk  deepening  inequalities  in 
access,  particularly  for  disadvantaged  groups.  In  many  Member  States,  shortages  of 
healthcare  staff  have  become  critical  due  to  working  conditions  that  discourage  the 
attractiveness  of  these  professions.  Experience  from  Member  States  has  shown  the 
potential  of  eHealth  for  improving  care  coordination  and  integration  and  making  it 
effective and accessible in particular through telemedicine. Among the measures by the 
Commission to directly support national health systems are calls for tender for medical 
equipment  and supplies  under the Joint Procurement Agreement and  rescEU capacity, 
under  the  Union  Civil  Protection  Mechanism,  which  enables  to  create  a  strategic 
stockpile  of  essential  medical  supplies  for  Member  States  and  support  to  research  on 
vaccines,  diagnostics  and  treatment.  Moreover,  health  systems’  support  is  one  area  of 

7   The  guidance,  prepared  by  EU-OSHA  in  cooperation  with  the  European  Commission  has  also 
benefitted from the inputs of the tripartite Advisory Committee on Safety and Health at Work and the 
Senior Labour Inspectors Committee. 

11 

 
 
 
                                                 
the  Coronavirus  Response  Investment  Initiative.  European  instruments  like  the 
Cohesion  Policy  Funds  and  SURE  can  support  Member  States  in  easing  up  the 
healthcare costs linked to the pandemic. 

Education  and  training  systems  are  also  affected  by  the  crisis.  In  most  Member 
States,  classes  (as  well  as  work-based  learning  and  apprenticeships)  have  been 
suspended  and  teaching  activities  partially  moved  online.  This  situation  affects 
educational  outcomes  of  learners  and  may  aggravate  socio-economic  disparities  and 
existing  structural  challenges,  if  not  counteracted  by  appropriate  reforms  and 
investment. Too many young people still leave education without adequate basic skills. 
The COVID-19 crisis has shown how important it is that all students have equal access 
to  distance  learning,  through  broadband  connections  and  IT  devices,  and  have  the 
necessary digital skills. Investment in ‘high social impact’ infrastructure should include 
all  relevant  aspects  of  schools/education  services  from  the  upgrading  of  school 
buildings (to guarantee energy efficiency, hygiene and social distancing among pupils) 
to  IT  equipment.    Supporting  adequate  skills,  digital  in  particular,  will  improve  the 
productivity and resilience of the labour force easing the transition toward a greener and 
smarter economy.   

A  well-functioning  social  dialogue  is  key  to  ensure  that  measures  taken  are 
successful, inclusive and sustainable. While there is no single model that serves as a 
reference, in some Member States there is clearly room for a better functioning social 
dialogue  and  a  greater  involvement  of  social  partners  in  policy  design  and 
implementation. 

investment  and 

Fair  and  growth-friendly  tax  systems  can  help  support  economic  recovery  by 
contributing  to  inclusive  and  sustainable  growth.  Growth-friendly  tax  systems  can 
support  private 
the  business  environment,  encourage 
employment,  reduce  inequalities  and  contribute  to  an  environmentally  resilient 
economy. Moreover, simplifying the tax system can help limit economic distortions and 
reduce the administrative burden for companies. Since an efficient and fair tax system is 
particularly  important  to  support  an  effective  economic  recovery  in  the  medium  term, 
some  Member  States  are  recommended  to  reform  their  tax  system,  including  through 
shifting from labour to environmental taxation. 

improve 

The  fight  against  Aggressive  Tax  Planning  (ATP)  remains  a  clear  priority,  in 
particular  to  allow  Member  States  to  rely  on  their  fair  share  of  tax  revenues  to 
implement  fiscal  support.  The  transposition  of  EU  legislation  and  of  internationally 
agreed initiatives will help curtailing aggressive tax planning practices. Certain features 
of  some  Member  States’  tax  systems  (i.e.  Cyprus,  Hungary,  Ireland,  Luxembourg, 
Malta and the Netherlands), however, are used by companies that engage in aggressive 
tax planning. In this light, these Member States are recommended to curb aggressive tax 
planning. 

2.3 Environmental sustainability 

Recovery investment creates the opportunity to reshape the EU economy and set it 
firmly  on  a  sustainable  footing.  This  year's  Country-Specific  Recommendations 
identify  areas  where  sustainable  investments  can  be  front-loaded  from  the  Member 
States’  perspective.  Authorities  are  recommended  to  identify  ready-to-invest  projects 
and funding sources to enable the climate neutrality and resource efficiency of industry, 

12 

 
buildings  and transport,  and to  launch the preparation of future investment  projects  to 
further  the  environmental  sustainability  agenda.  In  the  wide  range  of  energy,  climate 
and  environmental  policies  and  measures,  some  stand  out  as  candidates  for  rapid 
implementation.  This  includes  investment  in  small-scale  projects,  such  as  the 
decarbonisation  of  transport  and  energy  efficiency,  including  through  building 
renovations, which can  contribute to  the recovery  and put  economies on a sustainable 
long-term path. 

The  European  Green  Deal  and  the  implementation  of  the  National  Energy  and 
Climate  Plans  anchor  the  long-term  climate  neutrality  objective  and  the  related 
investment requirements. Promoting investments in energy efficiency and renewable 
energy  production  and  networks  can  contribute  to  the  transformation  towards  a  more 
competitive, sustainable and secure energy system. Energy policy combining public and 
private investment can also significantly contribute to the economic recovery.  

Investing  in  sustainable  mobility  and  the  circular  economy  represents  an 
opportunity to improve productivity and foster the green transition. Investments in 
sustainable  transport  infrastructure  (e.g.  urban  public  transport,  railways,  cycling 
infrastructure  and  logistic  hubs  for  intermodal  transport)  can  increase  quality  for 
citizens and sustain the competitiveness of the transport sector.  

Strategic supply chains that are critical for Europe’s resilience, sustainability and 
strategic  autonomy  need  to  be  supported.  This  applies  especially  in  hard-to-
decarbonise  sectors  (like  steel  making,  chemicals,  and  the  mobility  value  chain)  and 
renewables. The aim is to create lead markets/supply chains for European clean energy 
industries.  The  Energy  System  Integration  Strategy  will  be  an  important  driver  to 
deliver on this goal, supported by multiple initiatives8.  

Investment  in  ‘high  impact’  infrastructures  can  help  addressing  current  policy 
trade-offs and societal imbalances. To the extent possible, the resources set aside for 
the  recovery  should  be  channelled  towards  public  goods  and  infrastructure  for  more 
sustainable  growth.  This  can  be  achieved  for  instance  through  investments  in 
sustainable transport infrastructure in a way that is compatible with the EU objective of 
climate neutrality (e.g. urban public transport, railways and logistic hubs for intermodal 
transport), as well as through investments in environmental infrastructure. Investment in 
‘high  social  impact’  infrastructure  could  include  renovation  in  social  housing  and 
dwellings  of  low-income  households,  also  all  relevant  aspects  of  schools/education 
services  from  the  upgrading  of  school  buildings  (to  guarantee  energy  efficiency, 
hygiene  and  physical  distancing  among  pupils)  to  IT  equipment  ensuring  distant 
learning,  adequate  skills  and  access  for  disadvantaged  students.  Addressing 
environmental  and  climate  change  challenges  is  also  important  for  preserving  human 
health. In particular, green deal investments are key for tackling air pollution  

More  use  of  digital  technology  can  offer  greener  solutions  to  organize  our 
economies and societies. It may be appropriate to consider lifestyle changes of citizens 

8 

 Support initiatives include the European Battery Alliance, the forthcoming Clean Hydrogen Alliance 
and  Low  Carbon  Industry  Alliance,  Renewables  Ecosystem,  and  the  Offshore  Renewable  Energy 
Strategy. Enhanced resource efficiency through implementing the Circular Economy Action Plan will 
also boost resilience. 

13 

 
                                                 
and  working  practices  in  businesses,  especially  where  they  reduce  the  environmental 
footprint and optimise work-life balance.  

2.4 Productivity and competitiveness 

While stronger productivity growth is crucial to increase Europe’s competitiveness 
and  place  it  on  the  path  to  a  robust  recovery,  the  current  crisis  poses  risks  to 
productivity  growth  in  the  medium  term,  this  can  be  further  compounded  by  the 
frictions  in  global  value  chains.  The  adaption  of  firms  can  positively  increase 
productivity.  Digitalisation,  e-commerce,  e-government  and  e-health,  the  development 
of  new  business  models,  home-work  arrangements  and  teleworking  at  a  larger  scale 
may also increase productivity.  

Appropriate policies are crucial to step out of economic recession in the short-run 
and  to  ensure  that  human  capital  is  not  affected  in  the  medium  run.  Productivity 
enhancing  mechanisms  include:  (i)  Promoting  innovation  and  technological  diffusion, 
e.g.  through  investment  in  R&I;  (ii)  Effective  enforcement  of  competition  rules  to 
address  issues  of  market  power;  (iii)  Investing  in  people  competencies  through  better 
education  and  training  systems;  (iv)  Ensuring  well-functioning  labour  markets  that 
avoid  segmentation  of  skills  and  opportunities  and  that  allow  for  job  progression;  (v) 
Facilitating  proper  allocation  of  resources  through  a  supportive  business  environment; 
(vi)  Improving  the  functioning  of  institutions  and  governance,  including  efficient  and 
independent justice systems. Support for investment in digitalisation may yield a double 
positive effect  if the current  ‘physical  distancing’ continues. Teleworking productivity 
will play  a major role.  However, the benefits  may not  be available to  the unskilled or 
the untrained. 

Digital technology is essential and will contribute to a more robust recovery of our 
societies as well as our economies. Recent physical distancing measures have brought 
to the fore the importance of a modern digital infrastructure to guarantee wide internet 
access  and  availability  of  digital  services,  indispensable  for  everyday  activities. 
Investment in digitalisation of business and the public sector, the development of data 
digital services in the public and private sector can enable teleworking, virtual learning 
and home schooling. Besides increasing resilience and productivity, this transition can 
also contribute to the green transformation of our economies and help bring vulnerable 
groups into the economic mainstream. Long-term investment in R&D advanced digital 
technologies  and  advanced  digital  skills  is  indispensable  to  guarantee  Europe’s 
technological sovereignty while preserving its common values.  

Investment  must  take  supply  chains  into  account.  Many  industrial  plants  have 
stopped  their  production.  Others  have  been  converted.  Following  supply  chain  and 
demand  disruptions,  rebooting  the  system  will  likely  happen  in  new  forms  (e.g. 
adjusting processes to inputs of different geographical origin). This is a ‘once in a life-
time’  opportunity  to  secure  Europe’s  open  strategic  autonomy,  in  particular  by 
diversifying  and  strengthening  the  supply  chains  across  the  Single  Market  and  ensure 
that never again  we face the risk of insufficient supply of essential goods the areas of 
food and healthcare. Potential equity funding programmes provided by EU and national 
authorities  for  SMEs,  particularly  those  actively  involved  in  innovative  projects  and 
with growth potential, could prevent unnecessary bankruptcies of viable businesses and 
serve as policy tools for overcoming industrial fragmentation. Innovation is critical to a 
productive Europe. 

14 

 
Tackling the recovery  needs to take into account the large links across  industrial 
ecosystems  and  firms  spreading  along  several  Member  States.  Investment  also 
represents a powerful tool for EU industrial policy.  Restoring the EU’s supply chains 
will require an effort to seek efficiency. Uncertainties, lower demand and disruptions in 
firms  costs.  Restoring  productivity  and  cost 
value  chains  have 
competitiveness  is  become  a  challenge  for  firms  in  the  short  term.  Cost  reducing 
innovations  will  become  more  attractive  but  efficiency  will  be  a  challenge  across  the 
economy. The social opportunity cost of inefficient public expenditure will be a burden 
to be shared by business and citizens. Improved governance, professional and efficient 
use of public procurement tools will be more necessary now than ever. 

increased 

3.  A  JOINT  EFFORT  BETWEEN  EU  INSTITUTIONS  AND  MEMBER 

STATES 

The  unprecedented  situation  has  required  a  specific  approach  of  this  year’s 
European Semester. Over the past decade, the European Semester has become the key 
tool for the coordination of national economic and employment policies. It is currently 
an  integral  part  of  the  EU’s  effort  to  contain  the  spread  of  the  virus,  support  national 
health  systems,  protect  and  save  lives,  and  counter  the  social  and  economic  impact  of 
the  pandemic.  Therefore,  the  proposed  recommendations  highlight  economic  and 
employment  policies  adapted  to  the  new  socio-economic  priorities  of  the  COVID-19 
crisis in areas of common concern.  

This  approach  has  only  been  possible  with  even  closer  cooperation  between  the 
Commission and Member States. Close contact and intensive dialogue have been key 
to  understanding  and  identifying  policies  and  best  practices  adopted  to  mitigate  and 
address  the  socio-economic  impact  of  the  virus.  As  a  result,  the  Commission  has 
updated  its  analysis  of  the  Member  States’  social  and  economic  situation  presented  in 
the  2020  country  reports  to  reflect  the  current  economic  and  social  circumstances  in 
each  Member  State.  The  Commission  has  held  bilateral  meetings  with  Member  States 
via  videoconference  during  the  month  of  April  and  has  maintained  a  continuous 
dialogue  with  Member  States  multilaterally  and  bilaterally,  including  through  the 
relevant Committees and with the European Semester Officers in the capitals. 

4.  THE EUROPEAN SEMESTER AND THE EU BUDGET 

The  EU  budget  is  one of  the  drivers  of  the  EU’s  economic  agenda.  Faced  with  an 
unprecedented economic shock, the EU budget  is  an essential tool to  tackle the short- 
and long-term challenges. The multiannual financial framework is closely aligned with 
the  European  Semester.  Its  instruments  offer  scaled  up  financial  support  for  key 
investments and reforms with a lasting impact on the resilience of the EU economy. The 
EU budget paves the way for the twin green and digital transitions while protecting the 
social market economy and welfare systems to ensure a sustainable recovery and push 
for convergence. 

While  not  all  investment  needs  can  be  addressed  by  EU  funds,  the  EU  budget 
offers ample opportunities through EU financial programmes. The Country Specific 
Recommendations  in  the  European  Semester  provide  guidance  for  reforms  and 
investments  in  several  instruments  like  the  operational  programmes  of  the  cohesion 
policy  funds.  These  resources  can  support  the  reforms  and  investments  that  are 
identified in the context of the European Semester and are crucial for Member States for 

15 

 
supporting  the  current  economic  emergency  and  the  recovery.  Focusing  reforms  and 
investments  in  these  critical  policy  areas  will  speed  up  the  recovery.  The  further 
enhanced link between the European Semester and the EU cohesion  policy  funds will 
lead  to  better  and  more  effective  programming  and  thus  to  better  and  more  focused 
investments resulting also in swifter recovery. This operational link streamlines existing 
processes and ensures greater coherence between the coordination of economic policies 
and  the  use  of  EU  funds.  The  analytical  underpinnings  of  the  European  Semester  can 
effectively  guide  Member  States  and  the  Commission  in  the  dialogue  leading  to  the 
programming of the funds. 

Close alignment between the EU budget and the European Semester is essential to 
ensure stability, productivity and fairness in the economic recovery across the EU 
with the twin green and digital transitions at its heart. 

NEXT STEPS  

The Commission calls on the European Council to endorse and on the Council to 
adopt  the  country-specific  recommendations  for  2020-2021.  Members  of  the 
Commission  in  charge  of  economic  policy  will  discuss  these  policy  recommendations 
with the European Parliament at each key stage in the European Semester cycle. 

The  Commission  also  calls  on  Member  States  to  implement  them  fully  and  in  a 
timely  manner,  in  a  dialogue  with  social  partners,  civil  society  organisations  and 
other  stakeholders  at  all  levels.  The  Commission  will  continue  to  engage  with 
Member  States  and  national  stakeholders  throughout  the  Semester  process  to  ensure 
effective follow-up and implementation, based on broad ownership.  

Given the urgency of launching the recovery, the Commission calls on the Member 
States  to  urgently  adopt  the  new  Multiannual  Financial  Framework  and  to 
prepare 
the  country-specific 
recommendations.  The  Commission  is  also  available  to  provide  on-request  reform 
support  to  the  Member  States  and  help  the  authorities  make  the  best  use  of  the  EU 
funds.  

the  relevant  programmes  on 

the  basis  of 

16 

 
 
 
APPENDIX  -  PROGRESS  IN  THE  IMPLEMENTATION  OF  THE  COUNTRY 
SPECIFIC RECOMMENDATIONS 

Structural  challenges  remain  important  and  tackling  them  will  be  crucial  for  a 
sustainable recovery and growth afterwards. The more  resilient Member States  are 
currently forecast to rebound faster, showing the importance of reform implementation.  

than 

for  more 

two-thirds  of 

Since  the  start  of  the  European  Semester  in  2011,  some  implementation  progress 
the  country-specific 
has  been  achieved 
recommendations.  Implementation  continues  on  a  stable  path,  as  in  previous  years 
(Figure 1). However, reform implementation differs significantly across policy areas. In 
particular,  Member  States  have  made  most  progress  over  the  past  years  in  financial 
services, followed by progress on employment protection legislation. On the other hand, 
progress has been particularly slow on broadening the tax base, as well as on health and 
long-term  care,  with  the  healthcare  systems  being  further  challenged  because  of  the 
COVID-19. 

Figure 1: Level of implementation today of 2011-2019 CSRs 

Note: The multiannual assessment looks at implementation from the time the recommendations were first 
adopted  until  publication  of  this  Communication  in  May  2020.  The  overall  assessment  of  the  country-
specific recommendations related to fiscal policy includes compliance with the Stability and Growth Pact.  

Progress  with  the  implementation  of  the  recommendations  adopted  in  2019  has 
overall been slow. Member States have made at least “some progress” in 4 out of 10 of 
the  recommendations  addressed  to  them  in  July  2019  (Figure  2).  This  performance  is 
stable compared to last year. Nevertheless, progress remains uneven across policy areas. 
Reform  implementation  continues  to  be  better  in  financial  services  and  active  labour 
market  policies;  while  progress  remains  low  in  addressing  recommendations  about 
strengthening  competition  in  services  and  the  long-term  sustainability  of  public 
finances, including pensions.  

17 

 
 
 
Figure  2: 
assessment in each consecutive year since 2011 versus implementation to date 

Implementation  of  country-specific  recommendations:  annual 

Note: The multiannual assessment looks at implementation from the time the recommendations were first 
adopted until publication of this Communication in May 2020. For the years 2011 and 2012, it is more 
difficult to compare the annual with the multiannual assessment due to different assessment of categories 
of the country-specific recommendations.  

18