Fri. Jul 19th, 2024

MEPs called for combining the European Semester with National Recovery Plans, to improve efficiency and express concern about persisting wealth disparities in the EU.

Economic and Monetary Affairs Committee (ECON) held an Economic Dialogue with Commissioners Valdis Dombrovskis and Paolo Gentiloni. MEPs inquired about several issues that dominated their last such meeting, such as the deactivation of the General Escape Clause (GEC) in 2023 amid persisting inequalities in the EU. They also put forward proposals for a stronger alignment between the Recovery and Resilience Facility and National Plans and the European Semester and Country Specific Recommendations.

The GEC allowed member states to deal with the consequences of the COVID-19 crisis, as they were able to depart from normal budgetary requirements. ECON MEPs insisted again that the GEC deactivation might be premature amid the economic impact of the Omicron variant alongside rising inflation and energy prices, supply bottlenecks and international tensions. Numerous MEPs highlighted the issue of persistent wealth disparities in the EU, including rising house prices excluding young people from the property market.

While Vice-President Dombrovskis reiterated that the EU economy has already recovered to pre-crisis levels, presenting record low unemployment as evidence, he also reminded MEPs that the GEC decision is data-based and can be altered in case of a major economic shock. The commissioners also assured MEPs the Commission would share fiscal guidance on how to apply fiscal rules in 2023. The Commission will also work with member states on reducing their post-crisis debts in a way that does not hamper their growth.

MEPs proposed combining the European Semester with the RRF, while avoiding any overlaps and administrative burden on member states. They suggested that the higher ownership of the RRF and the readiness to implement reforms result not only from the implementation-based financing but also from the bigger involvement of member states in designing their national recovery plans according to their own investment and reform needs.

The Commissioners admitted that there are lessons that have been learned from the RRF that could be applied to the European Semester process, but they assured that the discussions are ongoing. They also said that the interlinkage between the RRF and the Semester will be a part of the economic governance framework review, for which the Commission will present a proposal in the coming months.

Further information

Source – EU Parliament

 

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