The Hungarian Presidency is committed to implementing the new economic policy co-ordination called the European Semester and welcomes that the Commission has published the Annual Growth Survey as the first step. The ten-point recommendation allows Member States to start negotiations immediately on a harmonised and effective economic policy as a way out of the crisis.
During its term of Presidency, Hungary will be responsible for guiding the implementation of the first European Semester in the history of the European Union. To launch the new economic co-operation, the European Commission issued on 12 January 2011 the Annual Growth Survey which recommends priorities to Member States in the areas of economic and budgetary policy.
Growth, competitiveness, job creation
The Hungarian Presidency proposes to start negotiations immediately after publication of the report so that EU heads of state and government can accept policy guidelines at the March summit. The consequent national programmes will help Europe to emerge from the crisis, regain its competitiveness, and spearhead job creation.
The Presidency is convinced that the new economic co-ordination mechanism is in the common interest of all Member States and that there is a need for measures to stimulate growth and to recover stability in addition to increased budgetary discipline.
The European Commission’s report summarised in ten points the recommended economic policy measures for EU countries.
Specifically, the basic prerequisites for growth were strict budgetary discipline, macroeconomic balance, and stability in the financial sector. Employment levels could be raised if work is made more attractive, pension systems are reformed, and the unemployed are encouraged to return to work. Moreover, the Commission believes a proper balance should be found between workplace security and flexible employment. In order to provide incentives for growth, the report recommends tapping the potential of the Single Market, involving private capital, and ensuring access to cost-effective energy.
The Commission takes the view that the European Semester will change the formation of economic and budgetary policies of Member State governments. If the goals described in the report are achieved, “Europe can return to strong economic growth and higher employment,” said Mr José Manuel Barroso, President of the Commission.
The European Semester
The publication of the Annual Growth Survey heralds the beginning of the co-ordination cycle called the European Semester. In this context, Member States are harmonising their macroeconomic and budgetary policies and structural reform measures with common EU goals along the Stability and Growth Pact rules and the Europe 2020 Strategy. All these are important steps towards economic governance at European level.
Aimed to strengthen economic governance, the European Semester policy was approved by Member States in September 2010. Starting this year, each January the Commission will submit a report analysing the EU’s economic situation and key challenges, including recommendations for Member States. Subject to debates in both the European Parliament and the Council, the Annual Growth Survey will serve as a basis for the guidelines and conclusions which the European Council will approve during its spring session, and for the medium-term budgetary strategies and national reform programmes which will be finalised by Member States in April.
By organising and coordinating the work of different council formations, the Hungarian Presidency’s activities can set a precedent in this area which is crucial to EU’s financial stability, sustainable growth, and competitiveness.