Broad guidelines for economic policies

The aim of these broad guidelines is to coordinate the economic policies of Member States. They also aim at creating smart, sustainable and inclusive growth throughout the European Union.

ACT

Council Recommendation 2010/410/EU of 13 July 2010 on broad guidelines for the economic policies of the Member States and of the Union [Official Journal L 191 of 23.7.2010].

SUMMARY

Council recommendations on overall economic policy guidance take the form of guidelines addressed to Member States. These guidelines enable the economic policies of the Member States to be coordinated in order to achieve joint objectives.

The current Council guidelines support the Europe 2020 Strategy. This strategy should enable the EU to achieve smart, sustainable and inclusive growth in the next ten years. In this Recommendation, the Council also notes the importance of the sustainability of Member States’ public finances and their macroeconomic stability.

These guidelines should be taken into account by Member States in the implementation of their economic policies and the development of national reform programmes.

Sustainability of public finances and macroeconomic stability

In the implementation of their economic policies, Member States must comply with the Stability and Growth Pact. Through this pact, Member States have committed to controlling their public deficit in order to avoid budget imbalances. Member States must therefore consolidate their budgets by ensuring that the level of their public debts, in particular, is reduced.

The Council encourages Member States to take measures to address macroeconomic imbalances, by paying specific attention to asset markets and household and corporate balance sheets.

In addition, it encourages Member States who have adopted the euro as a single currency to reduce macroeconomic imbalances within the euro area. They should also consider the large and persistent divergences in current account positions and other macroeconomic imbalances as a matter of common concern and take urgent action to reduce the imbalances where necessary.

Smart growth

The objective is to create an economy based on knowledge and creativity. The Council therefore recommends that Member States stimulate economic growth by investing in the fields of research and technology, and by fostering innovation. Reforms should, for example, develop effective research infrastructures and encourage cooperation between universities.

Sustainable growth

Sustainable growth is based on efficient use of energy and resources. Member States must therefore take environmental challenges into account in the implementation of their economic policies. For example, they are encouraged to promote renewable energies, low-carbon technologies and more environmentally-friendly modes of transport.

Inclusive growth

Member States should guarantee all citizens equal access to the economy. Inclusive growth should therefore contribute to creating a society in which all citizens participate in the labour market and profit from economic benefits.

To this end, Member States must particularly ensure compliance with the single market and competition rules. Better regulation of financial markets is also a priority objective: Member States should ensure predictable framework conditions and well-functioning, open and competitive goods and capital markets.

Context

The Council adopts broad guidelines for economic policies on the basis of Article 121 of the Treaty on the Functioning of the EU. This Article states that the economic policies of Member States are of common interest and that they should be coordinated within the Council. The Council therefore develops broad guidelines for economic policies in collaboration with the European Council and the Commission.

Last updated: 10.09.2010