Recommendation for a COUNCIL RECOMMENDATION on the economic policy of the euro area
Date: 2021-11-24
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU banking union, coronavirus disease, economic growth, economic reform, epidemic, euro area, fiscal policy, labour market, macroeconomics, structural adjustment

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   EUROPEAN COMMISSION  Brussels, 24.11.2021  COM(2021) 742 final  Recommendation for a COUNCIL RECOMMENDATION on the economic policy of the euro area {SWD(2021) 362 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the economic policy of the euro area 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, and in particular 
Article 136 in conjunction with Article 121(2) thereof, 
Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of 
the surveillance of budgetary positions and the surveillance and coordination of economic 
policies1, and in particular Article 5(2) thereof, 
Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the 
Council of 16 November 2011 on the prevention and correction of macroeconomic 
imbalances2, and in particular Article 6(1) thereof, 
Having regard to the recommendation of the European Commission, 
Having regard to the conclusions of the European Council, 
Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas:  

(1) 

After a very deep recession in 2020, the euro area economy is experiencing a solid 
and fast recovery. GDP growth in the second quarter of 2021 surpassed expectations 
and,  according  to  the  Autumn  2021  economic  forecast,  the  euro  area’s  GDP  is 
expected to grow by 5.0 % in 2021. The euro area economy is set to regain its pre-
crisis  GDP level  in  the last quarter  of 2021.  By  2021Q2, seven euro  area countries 
had already regained their pre-crisis GDP levels. Euro area annual GDP is forecast to 
grow by 4.3 % in 2022. Domestic demand is the main GDP growth driver, linked to 
the easing of restrictions further to the vaccination rollout, gradual improvements in 
the  labour  markets,  the  drawdown  of  extra  savings  accrued  during  the  lockdown 
periods,  and  strong  investment  growth  benefitting  from  favourable  financing 
conditions  and  the  policy  support  from  NextGenerationEU.  As  recommended,  euro 
area  Member  States  have  taken  action,  individually  and  collectively  within  the 
Eurogroup, to ensure a policy stance that supports the recovery from the COVID-19 
crisis. Going forward, uncertainty and risks remains high, including the evolution of 
the pandemic, both within and outside the EU. 

1 
2 

OJ L 209, 2.8.1997, p. 1. 
OJ L 306, 23.11.2011, p. 25. 

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In the course of the year, strong domestic demand growth has met constraints on the 
supply side, including input scarcity and logistics disruptions. In addition, labour and 
skills shortages have become a growing concern in some sectors and Member States. 
After several  years of very low rates, inflation in the euro area has picked up since 
the beginning of 2021, in particular on the back of surging energy prices and supply 
bottlenecks,  suggesting  a  transitory  phenomenon,  linked  to  the  post-lockdown 
adjustment process. Inflation has reached a ten-year high of 3.4% in the euro area in 
September 2021.  

In 2021, the European recovery strategy has focused on putting NextGenerationEU, 
and its largest instrument the Recovery and Resilience Facility (RRF)  3, into effect. 
By mid-November 2021, the Council had adopted the recovery and resilience plans 
of 22 Member States, including 18 euro area countries, after positive assessments by 
the Commission. Over the next years, the implementation of reforms and investment 
under the RRF will have a deep positive impact on the functioning of the euro area 
economies. The Facility will foster upwards economic and social convergence across 
euro  area  Member  States,  given  the  key  used  to  allocate  its  resources.  It  has  also 
reinforced  confidence  and  contributes  to  preserving  growth  and  macro-financial 
stability,  thus  balancing  the  policy  mix  and  complementing  the  European  Central 
Bank (ECB)’s actions. Beyond supporting the recovery, the RRF aims at structurally 
transforming the Member States’ economies notably to achieve the green and digital 
transitions. The implementation of coherent investment and reforms under the RRF, 
together with the use of cohesion funds, aims to increase the euro area’s resilience to 
future shocks and to raise potential output in a durable manner, support employment 
and  address  social  challenges.  Furthermore,  the  issuance  of  euro-denominated  debt 
by  the  Union  to  finance  the  RRF  will  add  depth  and  liquidity  to  Europe’s  capital 
markets and help to strengthen the euro as an international currency. 

The  implementation  of  the  reforms  and  investments  included  in  the  recovery  and 
resilience  plans  will  give  way  to  the  disbursement  of  RRF  funding  and  effectively 
contribute to the achievement of the euro area policy priorities, including the Council 
Recommendations on the economic policy of the euro area4. This will concern, inter 
alia, strengthening national institutional frameworks, supporting high-quality public 
investment,  policy  measures  in  support  to  social  cohesion  and  to  a  just  green  and 
digital  transition.  This  should  help  ensure  a  sustainable  and  inclusive  recovery, 
sustain  growth  potential  and  enhance  resilience.  This  is  in  line  with  the  Annual 
Sustainable Growth Survey and the four dimensions of competitive sustainability, i.e. 
environmental sustainability, productivity, fairness, and macroeconomic stability5. 

Appropriately  supportive  and  mutually  reinforcing  economic  policies  have  ensured 
effective  macroeconomic  stabilisation,  and  contained  the  impact  on  labour  market 
outcomes, mitigating risks of scarring and supporting a rapid economic recovery. A 
consistent  mix  between  monetary  and  fiscal  policies  along  with  structural  reforms 

(2) 

(3) 

(4) 

(5) 

3 

Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12  February  2021 
establishing the Recovery and Resilience Facility, OJ L 57, 18.2.2021, p. 17. 
Council  Recommendation  of  13 July  2021  on  the  economic  policy  of  the  euro  area,  OJ  C  283, 

4 
15.7.2021, p. 1.  
5 

Annual Sustainable Growth Survey 2022, COM(2021)740  

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(6) 

(7) 

(8) 

and measures to maintain financial stability will continue to be essential for the good 
functioning  of  the  euro  area,  in  full  compliance  with  the  respective  roles  of  the 
Member States and institutions under the Treaty.  

The  ECB’s  monetary  policy  measures  aim  to  ensure  the  smooth  functioning  of 
different  financial  market  segments  and  keep  the  monetary  transmission  channels 
intact, and ultimately safeguard medium-term price stability. In July 2021, the ECB 
published  its  new  monetary  policy  strategy.  The  new  strategy  adopts  a  symmetric 
2 %  inflation  target  over  the  medium  term.  The  Governing  Council  also  confirmed 
that the set of ECB interest rates remains its primary monetary policy instrument. In 
October  2021,  the  ECB  launched  a  two-year-long  investigation  phase  on  a  digital 
euro.  The  creation  of  a  digital  euro  would  require  an  intervention  of  the  Union 
legislature  on  the  basis  of  Article  133  TFEU.  Issuing  such  a  central  bank  digital 
currency  could,  inter  alia,  secure  the  continued  supply  of  public  money  in  digital 
form,  support  the  digitalisation  of  the  European  economy  and  actively  encourage 
innovation  in  retail  payments6.  Moreover,  it  would  contribute  to  strengthening  the 
international role of the euro and Europe’s open strategic autonomy. 

On  19  October  2021,  the  European  Commission  has  re-launched  the  debate  on  the 
economic governance review to build broad-based consensus on how to enhance the 
effectiveness and transparency of the framework, tackle macroeconomic imbalances 
and address fiscal challenges in a transition and growth-friendly manner, taking into 
account the lessons learnt from the COVID-19 crisis.  

The  deficit  of  the  general  government  in  the  euro  area  as  a  whole  is  projected  to 
reach 7.1 % of GDP in 2021 but to fall to 3.9 % in 2022. The euro area fiscal stance, 
stemming  from  national  budgets  and  the  EU  budget,  is  projected  to  remain 
supportive in 2021 and 2022 (1¾ % and 1 % of GDP, respectively). In 2022, public 
investment,  both  nationally-  and  EU-financed,  will  contribute  to  the  supportive 
stance. As of November 2021, the 18 euro area national recovery and resilience plans 
approved  by  the  Council  so  far  will  provide  large-  scale  financial  support  to  euro 
area Member States of up to EUR 262 billion in grants and EUR 139 billion in loans 
in the period to 2026. Coordination of national fiscal policies, in full respect of the 
Stability  and  Growth  Pact,  is  crucial  for  the  effective  response  to  the  COVID-19 
shock,  a  sustainable  recovery,  and  the  proper  functioning  of  the  Economic  and 
Monetary Union (EMU). While the general escape clause will remain active in 2022, 
it is expected to be deactivated as of 2023. With the economic recovery taking hold, 
fiscal  policy  is  pivoting  from  temporary  emergency  measures  to  targeted  recovery 
support measures. The increase in the government debt ratios (from 85.5 % of GDP 
in  2019  to  100 %  of  GDP  in  2021)  has  reflected  the  combined  effects  of  the 
contraction in output and the necessary policy reaction to the very large COVID-19 
shock. However, as debt ratios were already high in some euro area Member States 
before the shock, a gradual, continuous and growth-friendly debt reduction will be a 
policy objective across a large part of the euro area. 

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the  October 

See 
https://www.ecb.europa.eu/pub/pdf/other/Report_on_a_digital_euro~4d7268b458.en.pdf.  

“Report 

digital 

euro”, 

2020 

ECB 

on 

a 

available 

at 

3 

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(9) 

(10) 

(11) 

In  this  context,  improving  the  composition  of  public  finances,  including  by 
promoting  investment,  the  quality  of  budgetary  measures  and  ensuring  fiscal 
sustainability over the longer term, including in view of climate change and the green 
and  digital  transitions,  appear  particularly  relevant.  Green  budgeting,  spending 
reviews,  well-functioning  public  investment  management  schemes  and  effective 
public  procurement  frameworks,  can  create  fiscal  space  for  additional  public 
investments. Reforms for more efficient and fairer revenue policy have become even 
more  fundamental  in  the  aftermath  of  the  COVID-19  crisis.  There  is  still  scope  to 
make  the  tax  systems  in  the  euro  area  more  growth-  and  environment-friendly,  in 
particular  by  reducing  the  tax  wedge  on  labour,  which  remains  high,  in  most  euro 
area Member States. Measures addressing aggressive tax planning, tax avoidance and 
tax  evasion  can  make  tax  systems  more  efficient  and  fairer,  while  supporting  the 
recovery  and  increasing  revenue.  Globalisation  has  made  it  necessary  to  adjust  the 
taxation  framework  to  fit  an  increasingly  digitalised  economy.  An  agreement  on 
reforming  global taxation to  limit harmful  tax competition has  been reached within 
the OECD/G20 Inclusive Framework on base erosion and profit shifting (BEPS).  

The swift and forceful policy response at national and Union level, including through 
NextGenerationEU,  has  been  effective  in  mitigating  the  impact  of  the  crisis  on 
households and firms. Thanks to this coordinated action, divergences have widened 
less than initially expected, and long-run scarring effects have been mitigated. Policy 
support,  including  through  short-time  work  schemes  and  other  job  retention 
measures, has helped keep businesses in activity throughout the crisis and has limited 
the  rise  in  the  unemployment  rate  and  the  drop  in  disposable  income.  Although 
increasing, insolvency rates have remained contained in 2021 in spite of the gradual 
lifting of support measures. Labour markets are also showing gradual improvements, 
with employment back at 72.2 % in the second quarter of 2021, compared to the pre-
COVID  peak  of  72.9 %  in  the  fourth  quarter  of  2019.  The  accelerated  adoption  of 
digital technology throughout the crisis could have a positive impact on productivity 
if  sustained  over  time.  Still,  the  COVID-19  crisis  has  had  substantial  territorial, 
sectorial and distributional implications, which will require reallocations both within 
and  across  countries  and  sectors,  with  substantial  transition  costs  for  workers  and 
companies.  

Although the rise in bankruptcies has remained limited so far, the pandemic has left 
many  firms  with  weaker  balance  sheets,  which  might  constrain  their  ability  to 
finance  investment  projects  in  the  near  term  and  compromise  their  repayment 
capacity.  As  the  recovery  takes  hold,  support  should  be  gradually  phased  out  and 
made  more  targeted.  Making  less  use  of  debt  instruments  would  limit  contingent 
liabilities  and  help  preserve  businesses’  investment  capacity.  Timely  withdrawal  of 
policy  support  measures  is  a  balancing  act  between  supporting  investment  and 
employment,  and  avoiding  failures  of  viable  businesses  on  the  one  hand,  without 
inhibiting the orderly exit of the unviable ones over the medium-term, on the other. 
In  this  context,  improving  access  to  finance  for  companies,  strengthening  firms’ 
balance sheets and enhancing the capacity and efficiency of insolvency frameworks 
is crucial. National insolvency regimes differ substantially across the euro area, and 
capacity-enhancing  actions  will  be  needed  to  facilitate  an  effective  administration 

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and  judicial  system.  Improving  insolvency  frameworks  can  also  contribute  to 
sounder balance sheets in the banking sector, with a positive impact on credit supply. 
The Directive on restructuring and insolvency7, which seeks to  introduce minimum 
standards  across  Member  States  on  preventive  restructuring  and  debt  discharge  for 
entrepreneurs,  will  have  to  be  transposed  into  national  law  by  17  July  2022. 
Moreover,  the  integration  of  EU  capital  markets  is  key  to  provide  companies  with 
alternative sources  of  funding to  complement bank lending. Progress  in  the Capital 
Markets  Union  (CMU)8  can  improve  access  to  finance  for  euro  area  businesses, 
mobilise  long-term  investments  in  green,  new  technologies  and  infrastructure, 
promote equity investment and remove cross-border barriers to investment, including 
by harmonising certain aspects of substantive law on insolvency proceedings.  

(12)  While  employment  is  recovering  rapidly,  some  sectors,  specific  categories  of 
workers  and  regions  are  set  to  be  durably  impacted  by  the  crisis  and  by  the  strong 
push  for greening the economy. The new jobs  being created may be different  from 
the  jobs  that  have  been  lost  due  to  the  crisis.  Supply  chain  bottlenecks  may  slow 
down  the  rebound  of  employment  in  certain  sectors.  Policy  measures  that  facilitate 
job  transitions  and  labour  market  re-integration  will  therefore  be  key  to  support 
adjustment and mitigate social impacts in particular in the light of the twin transition. 
The Commission  put forward a recommendation  on an Effective Active Support  to 
Employment following the COVID-19 crisis (EASE)9, which invites Member States 
to develop coherent policy packages combining measures aimed at bridging the skill 
shortages  and  help  individuals  to  successfully  navigate  the  green  and  digital 
transitions. These packages would consist of three components: (i) time-limited and 
well-designed  hiring  and  transition  incentives  and  support  to  entrepreneurship;  (ii) 
upskilling  and  reskilling  opportunities  linked  to  labour  market  needs;  and  (iii) 
enhanced  support  by  employment  services.  Meanwhile,  for  the  cohesiveness  of  the 
euro  area  social  protection  remains  fundamental  in  the  wake  of  the  health  and 
economic  crises  and  with  a  view  to  ensuring  fair  twin  transitions.  The  European 
Pillar  of  Social  Rights10  remains  the  compass  for  employment,  skills  and  social 
policy action fostering upward economic and social convergence and better working 
and  living  conditions  in  the  Member  States.  The  European  Pillar  of  Social  Rights 
Action  Plan,  adopted  in  March  2021,  sets  three  EU  headline  targets  on 
(i) employment,  (ii)  adult  learning,  and  (iii)  poverty  reduction  by  203011,  to  which 

7 

Directive  (EU)  2019/1023  of  the  European  Parliament  and  of  the  Council  of  20  June  2019  on 
preventive  restructuring  frameworks,  on  discharge  of  debt  and  disqualifications,  and  on  measures  to 
increase  the  efficiency  of  procedures  concerning  restructuring,  insolvency  and  discharge  of  debt,  and 
amending Directive (EU) 2017/1132 (Directive on restructuring and insolvency), OJ L 172, 26.6.2019, 
p.18.  

8  During the Euro Summit on 25 June 2021, EU leaders underlined their political support for the capital markets 

9 

union (CMU) and called for rapid implementation of the CMU action plan. 
Commission  Recommendation  (EU)  2021/402  of  4 March  2021  on  an  effective  active  support  to 
employment following the COVID-19 crisis (EASE), OJ L 80, 8.03.2021, p. 1.  
Interinstitutional Proclamation on the European Pillar of Social Rights, OJ C 428, 13.12.2017, p.10.  

10 
11 The EU committed to the following EU headline targets by 2030: at least 78% of the 20-64 population should 
be in employment; at least 60% of people aged 25-64 should participate in learning activities each year; 
and the number of people at risk of poverty or social exclusion should decrease by at least 15 million 
compared to 2019. 

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policy  actions  recommended  below  will  contribute.  These  targets  have  been 
welcomed  by  the  EU  leaders  in  the  8  May  2021  Porto  Social  Summit  and  the 
European Council on 24-25 June 2021.   

(13)  Member  States  have  designed  ambitious  reform  and  investment  plans,  with  the 
financial  and  policy  support  of  the  RRF.  Increasing  the  quality  of  institutions,  in 
particular  by  strengthening  administrative  capacity,  will  be  key  to  ensure  a  swift 
absorption  of  the  related  funds  while  avoiding  duplications  and  interference  with 
other  EU  instruments.  Member  States  can  improve  the  framework  conditions  for 
private  investment  by  improving  the  business  environment.  Preserving  and 
strengthening  supply  chain  resilience  in  the  Single  Market,  by  detecting  and 
addressing supply shortages and bottlenecks, alongside open markets, convergence in 
standards,  greater diversification, circularity and  resource efficiency, will be key to 
the  Single  Market.  The  2021  Council 
ensure 
Recommendation  on  the  economic  policy  of  the  euro  area,  of  13  July  2021,  which 
calls  for  further  integrating  the  single  market  for  goods  and  services,  including  the 
digital  single  market,  by  removing  unnecessary  restrictions,  enhancing  market 
surveillance and guaranteeing sufficient administrative capacity, remains relevant. 

the  smooth  functioning  of 

(14) 

(15) 

(16) 

The banking sector has shown its overall resilience when faced with severe economic 
stress, thanks to previous reforms. The extensive policy support in the trough of the 
crisis and the solid recovery recorded in 2021 have so far attenuated concerns about 
weaker  corporate  balance  sheets.  Still,  euro  area  banks  might  experience  some 
deterioration in asset quality. Timely monitoring of risks, proactive engagement with 
debtors  and  active  management  of  non-performing  loans  is  important  to  maintain 
their ability to finance the economic recovery. 

The economic size and integration of the euro area, as well as the actions put in place 
to  respond  to  the  crisis,  have  been  stabilising  factors  globally  throughout  the 
COVID-19 crisis. Given the interconnectedness of the economies, euro area Member 
States will in the coming years need to deliver the investments and reforms agreed to 
emerge stronger from the crisis, while further deepening the institutional setup of the 
euro  area  to  increase  its  resilience  to  future  shocks  and  stand  stronger  on  the 
international scene. Economic and financial developments in advanced and emerging 
market  economies  have  direct  repercussions  on  the  euro  area  through  a  number  of 
channels, including through health and vaccination policy, monetary policy, financial 
flows,  global  value  chains  and  trade.  The  constraints  in  global  supply  chains  that 
arose  in  the  wake  of  the  recovery  further  testify  to  the  growing  global  economic 
interconnectedness.  Meanwhile,  the  euro  area  current  account  surplus  continued  its 
gradual  decline  and  recorded  a  level  close  to  that  suggested  by  fundamentals. 
Strengthening  the  international  role  of  the  euro,  which  remained  broadly  stable  in 
recent  years,  including  through  developing  a  digital  euro,  could  enhance  the 
economic  and  financial  autonomy  of  the  euro  area  and  the  Union,  and  improve 
global financial stability. 

The  deepening  of  EMU  remains  essential.  The  Banking  Union  and  the  Capital 
Markets  Union  are  mutually  reinforcing  projects  to  promote  growth,  safeguard 
financial stability and support a genuine Economic and Monetary Union. Filling the 
remaining  gaps  would  further  increase  the  euro  area’s  stability  and  resilience,  help 
the  euro  area  economies  thrive,  and  strengthen  the  international  role  of  the  euro. 
Completing  the  Banking  Union,  together  with  the  timely  ratification  of  the 
Amending  Agreement  to  the  ESM  Treaty,  and  the  Capital  Markets  Union  remains 
essential.  This  will  also  support  the  green  and  digital  transitions,  which  require 

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important investments. The Euro Summit of 25 June 2021 reiterated the commitment 
to  the  completion  of  the  Banking  Union  and  invited  the  Eurogroup  (in  inclusive 
format) to  agree, without  delay  and on a consensual  basis, on a stepwise and time-
bound work plan on all outstanding elements. It also called for rapid implementation 
of the CMU Action Plan in line with the priorities set out in the Council Conclusions 
of 3 December 2020. The 2021 Council Recommendation on the economic policy of 
the  euro  area,  of  13  July  2021,  which  calls  for  completing  the  EMU  and 
strengthening the international role of the euro, remains relevant. 

HEREBY RECOMMENDS that euro area Member States take action, individually, including 
through  the  implementation  of  their  Recovery  and  Resilience  Plans,  and  collectively  within 
the Eurogroup, in the period 2022 –2023 to: 

1. 

2. 

3. 

Continue  to  use  and  coordinate  national  fiscal  policies  across  Member  States  to 
effectively  underpin  a  sustainable  and  inclusive  recovery.  Maintain  a  moderately 
supportive  fiscal  stance  in  2022  across  the  euro  area,  taking  into  account  national 
budgets and the funding provided by the Recovery and Resilience Facility. Gradually 
pivot  fiscal  measures  towards  investments  that  promote  a  sustainable  and  inclusive 
recovery, consistent with the green and digital transitions, paying particular attention 
to the quality of budgetary measures. Keep fiscal policy agile in order to be able to 
react if pandemic risks re-emerge. Differentiate fiscal policies taking into account the 
state  of  the  recovery,  fiscal  sustainability  and  the  need  to  reduce  economic,  social 
and  territorial  divergences.  Once  economic  conditions  allow,  pursue  fiscal  policies 
aimed  at  achieving  prudent  medium-term  fiscal  positions  and  ensuring  debt 
sustainability, while enhancing investment. 

Promote policies that tackle aggressive tax planning, tax evasion and tax avoidance 
to  ensure  fair  and  efficient  tax  systems.  Work  to  limit  harmful  tax  competition 
including  through  the  implementation  of  the  global  consensus-based  solution  to 
address  the  tax  challenges  arising  from  the  digitalisation  and  globalisation  of  the 
economy. Lower the tax wedge on labour and promote a shift-from labour taxation 
towards  taxes  that  are  less  distortive.  Transition  from  emergency  to  recovery 
measures  in  labour  markets  by  ensuring  effective  active  labour  market  policies:  (i) 
supporting  job  transitions,  in  particular  towards  the  green  and  digital  economy,  (ii) 
combining  measures  tackling  skills  shortages,  strengthening  upskilling  and  re-
skilling,  providing  targeted  hiring  incentives  and  (iii)  enhancing  the  capacity  of 
public  employment  services  to  address  labour  market  mismatches.  Strengthen 
inclusive quality education and training systems. Promote labour market integration 
of  vulnerable  groups,  in  particular  young  people  and  women,  ensure  adequate 
working  conditions  and  address  labour  market  segmentation,  develop  and  adapt 
where  needed  social  protection  systems  to  address  challenges  emerging  after  the 
COVID-19  crisis.  Ensure  the  effective  involvement  of  social  partners  in  policy 
making, strengthen social dialogue and collective bargaining. Ensure sharing of, and 
convergence  towards,  good  practices  in  labour  market  and  social  policies  that 
increase economic and social resilience.  

Monitor the effectiveness of policy support packages for companies, focus on a more 
targeted support for the solvency of viable firms that have come under stress during 
the  pandemic,  and  make  greater  use  of  equity-type  instruments.  Take  actions  to 
increase  the  capacity  of  insolvency  frameworks  to  deal  effectively  and  timely  with 
bankruptcy and debt restructuring, maximize the preservation of value and promote 
an  efficient  allocation  of  capital  and  cross-border  investments.  Make  progress  in 
deepening  the  Capital  Market  Union,  including  by  swiftly  agreeing  on  the 

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4. 

5. 

Commission  legislative  proposals  to  support  the  financing  of  the  economy  and  to 
enhance investments opportunities for firms and individuals and remove cross-border 
barriers to investments in the single market. 

Continue  to  strengthen  national  institutional  frameworks  and  pursue  reforms  to 
address bottlenecks to investment and reallocation of capital, and ensure the efficient 
and  timely  use  of  Union  funds.  Reduce  the  administrative  burden  for  firms  and 
improve the business environment. Strengthen the effectiveness and digitalisation of 
public  administration.  Improve  public  financial  management,  including  through 
green budgeting and effective public investment management frameworks, and make 
use of spending reviews to improve the composition of public finances, in particular 
quality  of  public  investments,  investment  in  people  and  skills,  and  to  better  focus 
public expenditure on recovery and resilience needs.  

Ensure  macro-financial  stability,  and  maintain  the  credit  channels  to  the  economy, 
continuing  to  address  non-performing  loans  through,  amongst  others,  monitoring 
asset quality, timely and pro-active engagement with distressed debtors (in particular 
viable  ones)  and  the  further  development  of  secondary  markets  for  non-performing 
loans. Continue to work on completing the Banking Union, through a step-wise and 
time-bound  work  plan,  and  on  strengthening  the  international  role  of  the  euro. 
Continue to support exploratory work on the possible introduction of a digital euro. 

Done at Brussels, 

For the Council 
The President 

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