The European Commission recommended the closure of the "excessive deficit procedure" for six countries: Belgium, the Czech Republic, Denmark, The Netherlands, Austria and Slovakia. These countries have all brought their deficits sustainably below 3% of GDP. In 2011, no less than 24 Member States were in the "excessive deficit procedure”. Currently there are 17. And provided the Council adopts today’s recommendations, the number will fall to 11.
As for the general trend, László Andor, Commissioner for Employment, Social Affairs and Inclusion, said on Monday, 2nd of June: "Although there are some signs of economic recovery, it remains slow; it is still very fragile; and it is uneven throughout the EU.”
The EU Commission presented on Monday its annual country-specific recommendations for the countries whose currency is the euro, but the Commissioners did it half-heartedly, and it was obvious that the present Commissioners ran out of steam, while waiting for political signals from the major capitals. The recommendations target everything from budgetary, labor to climate and education policy.
László Andor and the economics chief Olli Rehn, who has recently returned from his successful sabbatical to fight the election for the European Parliament, made recommendations for each of the member states — except for Greece and Cyprus, which are in bailouts — based on priorities EU leaders set out in March and the reform programs governments submitted in April.
The European Semester country-specific recommendations are not only about monitoring fiscal policies and competitiveness developments. Indeed, this year, for the first time under the European Semester, the Commission used a new employment and social scoreboard to ensure that country-specific recommendations are based on sound analysis and address employment and social concerns more precisely.
The European Commission, acting as the 28-nation bloc's economic watchdog, urged Italy and France to do more to bring their debt under control and push ahead with structural reforms to promote growth.
Monday's recommendations came just a week after the European Parliament elections, in which Italy's Prime Minister Matteo Renzi's center-left party mustered strong support partly by calling for more leeway from Brussels'-dictated economic policies.
France's governing Socialists took a beating in the elections and are now facing the balancing act of complying with tough economic policy constraints while restoring the government's popularity.
The Commission called on Italy to "reinforce budgetary measures" this year to reduce its debt pile and urged France to detail its measures to ensure "the correction of the excessive deficit" this and next year.
At the same time, the Commissioners insisted that the Commission makes recommendations, but that it takes no responsibility for them.
“It is the Council that decides”, said Jose Manuel Barroso, president of the Commission. "The Commission only makes recommendations.” "Im going through cold turkey”, said, using colourful language, Olli Rehn.
Fiscal discipline is ensured in side the EU by the "Stability and Growth Pact" (SGP), an agreement requiring each Member State to implement a fiscal policy aiming for the country to stay within the limits on government deficit (3% of GDP) and debt (60% of GDP); and in case of having a debt level above 60% it should each year decline with a satisfactory pace towards a level below.
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