Broad economic policy guidelines for EU countries

SUMMARY OF:

Council Recommendation (EU) 2015/1184 — broad guidelines for the economic policies of EU countries and of the EU as a whole

SUMMARY

WHAT DO THE BROAD ECONOMIC POLICY GUIDELINES DO?

In line with Article 121 of the Treaty on the Functioning of the European Union, the Council issues broad economic policy guidelines (BEPGs) for the EU economy. These are guidelines on macroeconomic and structural policies which aim to coordinate the EU countries’ economic policies so as to achieve common goals.

When read alongside the guidelines for the employment policies of the EU countries, which are published every year under a separate article (Article 148 of the Treaty on the Functioning of the European Union), they form the integrated guidelines for implementing the Europe 2020 strategy.

KEY POINTS

The financial and economic crisis of 2008 revealed and exacerbated important weaknesses in the EU and underscored the close interdependence of EU countries’ economies. The latest set of guidelines, those of 2015, seek to:

• as outlined in the annual growth survey 2015 presented by the Commission, validate and support policy actions for reaching the goals of the Europe 2020 strategy based on:
  • investment,
  • structural reforms, and
  • fiscal responsibility;
• set the EU firmly on the path to growth, the goal of the Europe 2020 strategy, and allow it to maximise the potential to create new jobs;
• contribute towards achieving the objectives of the European semester for economic policy coordination.

The Council recommends that the EU countries and, where appropriate, the EU as a whole, take into account the following guidelines in their economic policies.

• Guideline 1: boosting investment by:
  • making the most of the opportunities provided by EU funds, including the European Fund for Strategic Investments and the Structural Funds to finance investment in key growth areas;
  • setting up a European platform under the auspices of the European Investment Bank (EIB) to provide advice on investment as well as build up a transparent pipeline of projects so as to ensure that the capital benefits the real economy (i.e. the productive side of the economy).
• Guideline 2: increasing growth via structural reforms in EUcountries by:
  • continuing to reform labour markets and social security systems in order to increase growth and employment while ensuring universal access to social benefits and services, alongside their quality, affordability and sustainability;
  • pursuing the reform and integration of product markets to enable consumers and EU businesses to benefit from lower prices and a wider choice of goods and services;
  • improving the regulatory environment in which companies operate, in particular to support small- and medium-sized businesses (SMEs);
  • promoting private sector investment in research and innovation, particularly the information technology and communications sector and the digital economy.
• Guideline 3: eliminate the main obstacles to sustainable growth and employment in the EU by:
  • further integrating the EU’s single market by removing the remaining barriers, by increasing competition and by improving the business environment so that Europe remains attractive for companies, both domestic and foreign;
  • ensuring the digital single market integrates by facilitating the creation of a digital Europe without frontiers;
  • strengthening regulation and supervision, as well as consumer protection in the field of financial markets and institutions;
  • establishing a sustainable market for securitisation in Europe to improve EU banks’ effective lending capacity;
  • creating a genuine EU capital market;
  • achieving an Energy Union ensuring affordable, secure and sustainable energy for businesses and households;
  • implementing the 2030 climate and energy policy framework;
  • continuing the transition to a competitive low-carbon economy while promoting green jobs and technologies, as well as innovative solutions.
• Guideline 4: making public finances more sustainable and growth friendly by:
  • conducting fiscal policies that comply with the Stability and Growth Pact (i.e. controlling deficit and debt at sustainable levels) so as to generate beneficial spill-over effects on growth through more coordinated action. This should allow those EU countries which do not have fiscal space (i.e. room for manœuvre with their public finances) to regain it, and those which do have it to use the opportunity to encourage domestic demand, with a particular emphasis on investment;
  • prioritising growth-enhancing spending areas (e.g. education, skills, research and development, innovation and investment in networks with positive impacts on productivity);
  • moving towards more growth-friendly taxation and improving the efficiency of the tax system by broadening the tax base, as well as strengthening the tax administration, simplifying the tax system and fighting against tax fraud and aggressive tax planning.

ACT

Council Recommendation (EU) 2015/1184 of 14 July 2015 on broad guidelines for the economic policies of the Member States and of the European Union (OJ L 192, 18.7.2015, pp. 27-31)

last update 25.02.2016