Debate: European Semester for economic policy coordination  - European Semester for economic policy coordination: employment and social priorities for
Date: WEDNESDAY, 13 MARCH 2024
Speaker: Valdis Dombrovskis
Language: EN

The European Semester plays a central role to coordinate Member States’ policies in those areas. It has been proven to be an effective and agile instrument throughout the recent challenging years. Its four dimensions – productivity, fairness, macroeconomic stability and environmental sustainability – remain fully relevant. The regular dialogue with this House is a crucial moment within the European Semester cycle and I am glad that in the context of the provisional agreement reached on the new economic governance framework, the dialogue with the Parliament has been further reinforced. This year, the semester will have a particular focus on addressing long-standing structural problems, including weak productivity, demographic issues – including ageing – and challenges linked to the green and digital transitions. If left unaddressed, these challenges may drag on growth, competitiveness and social cohesion for years to come. It requires tackling a variety of bottlenecks, more private and public investment, as well as structural reforms, amongst others, to make it easier for companies to finance themselves, to ensure that education and training systems equip workers with the right skills needed in the labour market, to make product services and labour markets more efficient, to improve business environments for companies, including by reducing the administrative burden. This year’s European Semester, with a deeper analysis on territorial and social disparities, will also inform the mid-term review of the cohesion policy funding expected by next year. This will provide an opportunity to assess the cohesion policy programmes and tackle areas where there are pressing needs and emerging challenges. It will also pay attention to complementarity between the RRF and cohesion policy and maximise their synergism. With public debt levels having risen substantially over the past years, and in the context of still high inflation, ensuring fiscal sustainability remains crucial. Debt and deficit levels need to be gradually reduced. As demands on public finances have simultaneously increased, particular attention should be paid to the efficiency, composition and quality of public finances. In particular, Member States should prioritise investments that support sustainable and inclusive growth. The recent provisional agreement reached between co-legislators on the new economic governance provides a strong anchor for Member States’ fiscal and structural policies. It focuses on improving debt sustainability, as well as on promoting sustainable and inclusive growth, contributing to the achievement of common Union priorities. Its swift implementation is now a key priority. A final word on the Recovery and Resilience Facility, which will continue to be closely tied to the European Semester. A full and timely implementation of recovery and resilience plans remains key to address structural challenges. Our recent mid-term evaluation shows that the RRF is helping to make our economies and societies more sustainable, more competitive and more resilient. It also shows how the RRF has produced a step change in the implementation of the country-specific recommendations and key EU priorities thanks to the combination of reforms and investments. At the same time, the mid-term evaluation has uncovered some areas for improvement and lessons to be learned, on which we need to reflect further, also with Parliament’s help. Thank you, Nicolas will complement this and other aspects.