Paolo Gentiloni, European Commissioner (L) and Valdis Dombrovskis, Executive Vice-President of the European Commission. Pic: European Commission
It is a key step in delivering on the objectives of the reform to make the framework simpler, more transparent and effective, with greater national ownership, a release from the Commission said.
The new framework supports member states in achieving macroeconomic stability, growth and fiscal sustainability, which are critical for the EU's economic strength in today's challenging global environment.
It also encourages reforms and investments that will lay the foundations for long-term economic stability and sustainable growth. Ultimately, it helps build a more resilient, fair, competitive and secure EU economy for the benefit of citizens, said the release.
The EU economy is returning to modest growth after a prolonged period of stagnation. While member states pursue fiscal adjustment where needed, public investment is expected to increase in 2025 in almost all member states, with a significant contribution from NextGenerationEU's Recovery and Resilience Facility and EU funds in several member states.
The European Council and the Eurogroup will now discuss the elements presented in the Package’s fiscal part.
Once the medium-term plans have been endorsed by the Council, the Commission will monitor whether member states respect the commitments contained within those plans for the whole period covered by the plan. Member states will present annual progress reports to facilitate the effective monitoring and enforcement.
The Commission will present the second part of the European Semester Autumn Package, including the Annual Sustainable Growth Strategy, the euro area recommendation, the Alert Mechanism Report and the proposal for a Joint Employment Report, in the coming weeks.
The new economic governance framework establishes simpler, and more transparent fiscal rules. It uses a single operational indicator, namely the member state's multi-annual net expenditure path, facilitating the tracking of compliance.
The framework also introduces risk-based surveillance tailored to each member state's individual fiscal situation and allows for more gradual fiscal adjustment if underpinned by specific reforms and investments.
Under the new framework, all member states include reforms and investments in their medium term plans addressing common EU priorities and challenges identified in country-specific recommendations in the context of the European Semester. These include the green and digital transitions, social and economic resilience, energy security and the build-up of defence capabilities.
Fibre2Fashion News Desk (DS)