The Luxembourg Minister in charge of relations with the European Parliament throughout the Luxembourg Presidency of the Council of the EU, Nicolas Schmit, spoke on 28 October 2015 on behalf of the Council to MEPs at the plenary session of the European Parliament in Strasbourg to discuss the European semester. The European Parliament is about to vote on its report on the Semester and the implementation of priorities for 2015, the rapporteur for which is the Polish MEP Dariusz Rosati (EPP). Furthermore, the Commission has just made public (on 21 October) its package on strengthening Economic and Monetary Union (EMU), which contains a chapter dedicated to the renewed "European semester". The debate revealed numerous differing opinions.
Nicolas Schmit announced that "the Council will deal with this question in the forthcoming weeks in order to draw some conclusions for 2016". He "noted with satisfaction the point at which our views converge", in terms of the analysis of the main challenges for the European economy - namely "the high level of debt, the unacceptable levels of unemployment, as well as the weak level of investment which hampers the EU's competitiveness" -, and in terms of the solutions, that is "more efficient implementation of the structural reforms, budgetary consolidation geared towards growth, better access for SMEs to funding, education systems which better respond to labour markets."
Nicolas Schmit then informed MEPs "of the work completed by the Council in the three principal sections of the European semester: macroeconomics, employment and competitiveness":
In particular, he emphasised that the country-specific recommendations were "more limited in number and better aimed at the principal macroeconomic challenges of each Member State" and that they "were placing emphasis on action in the short and medium terms", so their message would be conveyed more clearly. They are "also grounded in more sound country-by-country analyses" and the Council was able to examine them in depth. The latter also had more time, so the Commission's proposals could be better aligned with the realities on the ground. Member States have themselves been able to better involve stakeholders and national parliaments in the process of economic coordination at national level so, with better ownership of recommendations, their implementation has been more efficient, said Nicolas Schmit.
The debates in the Council, according to the Minister, also enabled "other improvements which could further strengthen the process" to be identified, particularly in terms of "the transparency of the macroeconomic imbalances procedure" and "the link between the European semester and the monitoring set out in the Growth and Stability Pact".
This coordination process may lead the EU towards many policies at macroeconomic level: investment and access to funding, all as budgetary policies conducive to growth centred around cost effectiveness, public investment, stimulation of private investment and more appropriate taxation.
The Council has also started work on the Commission's Action Plan for a Capital Markets Union, said the Minister. Conclusions on this question should be adopted in November. "The Presidency is set to continue working on the proposal on securitisation".
However, Nicolas Schmit was forced to concede that "by approving the country-specific recommendations last summer, the Council also recognised the reality on the ground. Unemployment and social inclusion continue to pose major challenges in a large number of Member States. For their citizens, improved economic prospects in Europe have not yet had any impact on employment or social situations", he said.
"Efforts to reduce unemployment levels, (...) and to improve the functioning of labour markets and social protection systems" for Nicolas Schmit "are all part of our duties towards our citizens". By converging upwards, they will allow "consolidation of growth" and citizens "will view the European policies as fair and balanced".
Nicolas Schmit wants to further advance social Europe. Worker mobility will be dealt with at Union level, while other issues remain national responsibilities, he said. "But even those policies benefit the exchange of best practices and "peer review" or the definition of common reference points, which we are in the process of establishing in order to integrate the long-term unemployed into the labour market", he underlined.
In the area of competitiveness, the Council's work confirms according to him "that Member States share the same ideas on the main challenges": investment, opening of markets for products and services, regulatory framework, a better business environment and better efficiency of public authorities. Lastly, the Minister said, "at European level, the digitalisation of the single market is certainly one of our big projects, without forgetting smart regulation and support for innovation clusters." He pointed out that the aim of Strategy 2020 was to bring investments in the area of innovation up to a level of 3% of GDP.
Mentioning that the European Parliament has highlighted the issue of implementing country-specific recommendations and asked that the Commission take stock of the progress made by Member States and envisage the introduction of an incentive mechanism, Nicolas Schmit assured those present that this implementation of recommendations "would remain the top priority for the Council". With the reforms to the European semester introduced in spring 2015 "we are moving closer to this aim" and the Council will examine the Commission's new proposals on a renewed semester in this way, he said.
During the debate, MEPS from the EPP group called for the common rules within the framework of the European semester to be respected as the best means of achieving growth.
S&D MEPs criticised the Commission for not placing enough emphasis on social aspects, not introducing more social indicators in its analyses and recommendations, not counting more on investment and flexibility, and thus remaining below the triple A social rating it advocated as it took up office. They also regretted the fact that the Commission ignores the European Parliament on important decisions within the framework of the European semester, while they think that "the two community institutions should work more closely together".
For the liberals, the European semester is an instrument which simply needs to be put to good use in order to get the EU back on the path towards growth.
For the conservatives of the ECR, the country-specific recommendations are not followed up by action, and the current EU economic governance will continue to undermine the EU's competitiveness.
The United Left expressed the view that the Rosati report concentrates too much on deficits, and not enough on spending to trigger growth.
Lastly, the Greens were disappointed that the European semester does not advocate measures to reduce poverty and to protect the environment. They reproached the Council for not being active on these questions and the Commission for not having an implementation strategy for their recommendations.
The Vice-President of the Commission, Valdis Dombrovskis, clearly confirmed in his response that the Parliament has a role to play during the discussions on the European semester. If the Commission's proposals on the European semester do not deal with environmental measures, it is because it has tried to rationalise its approach by concentrating on the socio-economic challenges in Member States. It is seeking to avoid duplicating efforts and does not want to repeat guidance already issued in other policy areas. The poor level of execution of recommendations is a matter of concern for the Commission. Furthermore, the Commission believes that partners - governments, national parliaments and social partners - have to participate more and be better informed. Regarding calls for more investment and stimulation of demand, he suggested that this is "one of the possible responses" to the slow-down in growth. While the Commission is moving towards work on phase 2 of the implementation of the Five Presidents' Report, which envisages completion of the EMU, the Commission wants the European Parliament to participate more in the EU's economic policies.
Nicolas Schmit stated that the exchange with MEPs had been "critical but overall constructive" and that the Council and Parliament share the same will to act in order to place the semester in a broader perspective. This would encompass the work being done to complete Economic and Monetary Union, "an essential tool for better governance", but also the deepening of its social dimension, "which enables an inclusive space with high performance in social and employment areas for all citizens to be established." He also believes that it is an important priority for the Commission.