COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK 2025 European Semester - Autumn package
Date: 2024-12-17
Institutions: European Commission, Secretariat-General
Subjects: EU employment policy, EU growth strategy, European Semester, competitiveness, economic forecasting, economic policy, economic reform, energy transition, green economy, macroeconomics

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   EUROPEAN COMMISSION  Strasbourg, 17.12.2024  COM(2024) 700 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK 2025 European Semester - Autumn package  
 
 
1. Introduction  

In  recent  years,  the  EU  has  undergone  profound  adaptations,  adjusting  its  policy 
priorities  to  respond  to  emerging  challenges.  Through  collective  efforts  the  EU  has 
successfully  navigated  multiple  crises  and  enhanced  the  resilience  of  its  Member  States. 
Economic activity is  set to  gradually pick up,  with  employment remaining  at  a record high 
level and purchasing power improving as inflation returns to target. However, to ensure our 
continued sustainable prosperity, the EU urgently needs to tackle the obstacles to growth and 
competitiveness. This calls for a consistent and ambitious policy agenda.  

The  EU  is  determined  to  ensure  its  sustainable  prosperity  and  competitiveness  while 
strengthening  its  social  market  economy  and  safeguarding  its  sovereignty,  economic 
security and global influence, as highlighted by EU Leaders in the Budapest Declaration and 
in President von der Leyen’s Political Guidelines1. The reports Much more than a market by 
Enrico Letta2 and The future of European competitiveness by Mario Draghi3 have highlighted 
the structural barriers that hold back the EU’s economic growth and productivity and put at 
risk our future prosperity. One of the first major initiatives of the new European Commission 
to be published in January will be a competitiveness compass, built on the three pillars of the 
Draghi  report:  (i) closing  the  innovation  gap  with  the  US  and  China;  (ii) a  joint  plan  for 
decarbonisation and competitiveness to accelerate the transition and lower the cost of energy; 
and  (iii) increasing  security  and  reducing  dependencies.  Progress  on  these  pillars  will  also 
depend on cross-cutting and interlinked enablers of competitiveness and inclusive growth – the 
deepening of the Single Market, simplification, skills development and quality jobs, financing 
investments and improving coordination.  

As central mechanism for the coordination of Member States’ economic and employment 
policies, the European Semester provides the framework to move forward the necessary 
investments and reforms. The European Semester will continue to identify socio-economic 
challenges and provide guidance on the policy action needed to address them, with the aim to 
improve the EU’s competitiveness, sustainability and social fairness. 

2. 2025 European Semester  

The 2025 European Semester cycle has been launched with the publication of the Autumn 
Package. On 26 November, the Commission published the first part of the package, launching 
the first implementation cycle of the new economic governance framework. It consisted of the 
assessment of the medium-term fiscal-structural plans for 21 Member States, the Commission 
opinion on the draft budgetary plans for 2025 of 17 euro-area Member States, as well as steps 
in the implementation of the excessive deficit procedures for 8 Member States. Once adopted 
by the Council, the recommendations on the medium-term plans will offer a coherent policy 
anchor for Member States’ economic and fiscal conduct for the coming years, helping to make 
the  EU  more  competitive  and  better  prepared  for  future  challenges  by  supporting  progress 
towards a green, digital, inclusive and resilient economy. The implementation of medium-term 
plans will be monitored through the European Semester – starting already in spring 2025 with 
the submission of the first annual progress reports by Member States.  

1 Political guidelines for the next European Commission 2024-2029. 
2 Enrico Letta, Much more than a market (April 2024). 
3 EU competitiveness: Looking ahead - European Commission. 

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Today’s  package  completes  the  start  of  the  2025  cycle  of  the  European  Semester.  It 
contains  the  Commission  recommendation  for  Council  recommendation  on  the  economic 
policy  of  the  euro  area,  the  Alert  Mechanism  Report  under  the  macroeconomic  imbalances 
procedure and the Joint Employment Report.  

individually  and  collectively  within  the  Eurogroup  to 

The recommendation on the economic policy of the euro area calls on euro area Member 
States  to  act 
improve 
competitiveness and foster productivity. This requires strengthening innovation, including 
in  critical  technologies,  strengthening  access  to  funding  for  businesses  including  SMEs, 
improving  the  business  environment  by  reducing  administrative  burden  and  regulatory 
complexity, removing investment obstacles and  supporting public and private investment in 
areas of common priorities, such as the green and digital transitions and the build-up of defence 
capabilities, and further developing skills in the workforce. The recommendation also puts the 
emphasis  on  the  need  to  increase  labour  market  participation,  promoting  quality  jobs, 
strengthen  incentives  to  work  and  avoid  divergences  in  competitiveness.  Finally,  euro  area 
Member  States  should  ensure  compliance  with  the  new  fiscal  framework,  to  improve  debt 
sustainability  and  to  monitor  risks  to  macro-financial  stability.  The  Recommendation  is 
supported  by  a  staff  working  document  that  analyses  economic  challenges  related  to 
competitiveness, resilience and macroeconomic stability. 

The  Alert  Mechanism Report  identifies  10  Member  States  for  which  in-depth  reviews 
should be carried out to assess whether they are affected by imbalances. The report initiates 
the annual round of implementation of the macroeconomic imbalance procedure, which aims 
to detect, prevent and correct imbalances which are adversely affecting, or have the potential 
to adversely affect, the proper functioning of the economy of a Member State, or of the EU as 
a whole. Based on the economic reading of the scoreboard, the report identifies Member States 
that it considers may be affected by, or may be at risk of being affected by, imbalances. In-
depth reviews will be prepared for these Member States next spring. That is the case for Greece, 
Cyprus,  Italy,  Hungary,  Slovakia,  Romania,  the  Netherlands,  Sweden  and  Germany  as  a 
follow-up to imbalances or excessive imbalances identified on 19 June 20244, while for Estonia 
the in-depth review will assess the risk of newly emerging imbalances. 

The  Joint  Employment  Report  monitors  the  implementation  of  the  employment 
guidelines, and of the European Pillar of Social Rights. The report provides an update on 
progress  in  achieving  the  2030  EU  headline  and  national  targets  on  (i) employment, 
(ii) strengthening  skills  and  (iii) reducing  poverty.  The  report  shows  that  the  EU  is  well  on 
track to reach the first, while significant further efforts are needed on the latter two. As in the 
past cycle, the report also analyses potential risks to upward social convergence based on the 
principles  of  the  Social  Convergence  Framework 5 .  Despite  some  improvements,  risks  to 
upward convergence persist  at  EU level  regarding skills development. This  may exacerbate 
challenges related to competitiveness and labour and  skills shortages. While labour markets 
continue  to  perform  robustly  with  record  employment  levels  and  historically  low 
unemployment, the labour market participation of certain population groups still lags behind. 
The proportion of people who are at risk of poverty or social exclusion decreased slightly in 
2023, but remained above pre-crisis levels.  

The  European  Semester  will  continue  to  drive  the  EU’s  economic  and  social  policy 
coordination, ensuring consistency between the EU, national and regional dimensions. To 
achieve the economic and social policy priorities of the EU and to address national challenges, 

4 2024 European Semester: Spring Package Communication 
5 In line with Regulation (EU) 2024/1263. 

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significant action will be needed by Member States – at national and regional level. The Spring 
Package  of  the  European  Semester  will  provide  country-specific  recommendations  (CSRs), 
based  on  the  identification  of  the  main  country-specific  challenges  in  the  Country  Reports. 
Ownership will be strengthened through improved use of structured dialogues with Member 
States,  social  partners  and  other  stakeholders,  including  local  and  regional  authorities  and 
relevant civil society organisations. These will include discussions on the implementation of 
existing recommendations, on current or future policy action to address identified challenges, 
as well as on opportunities for further economic growth and social progress. To this end, the 
Commission services will conduct European Semester missions early in the process and follow 
up with exchanges ahead of the finalisation of the Country Reports to enrich its analysis. Inter-
institutional  dialogue  with  the  European  Parliament  and  the  Council  will  remain  key  to 
ensuring democratic accountability, transparency and collaboration throughout the Semester 
process.  

The  2025  CSRs  will  provide  comprehensive  and  coherent  policy  guidance.  With  the 
Recovery and Resilience Facility (RRF) coming to an end in 2026, the 2025 European Semester 
cycle will see a gradual move to a more comprehensive set of CSRs, phasing out the approach 
to  CSRs  introduced  during  the  earlier  phases  of  RRF  implementation.  The  progressive 
development of such comprehensive policy guidance for each Member State will help deliver 
on commonly agreed objectives, in light of the preparation of the next Multiannual Financial 
Framework, while taking into account national specificities. As such, the 2025 Semester will 
act as a bridge, based on an improved analysis to identify the relevant structural challenges and 
provide guidance on reform and investment priorities in each Member State. 

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