The European Commission yesterday (June 2) provided pieces of advice on economic policy to individual EU Member States. The aim of the Commission’s recommendations is mainly to strengthen the fragile economic recovery that started only a year ago. The policy advice draws on detailed analysis of each of the EU members and provides guidance on how to further stimulate growth, raise competitiveness and create jobs in the coming two years. Since the beginning of this year, the focus has moved away from addressing urgent and pending problems that had emerged from the crisis to strengthening the conditions for sustainability, long-term growth, and job creation. As a result, the Commission has also adopted a number of decisions on public finance of some member states under the Stability and Growth Pact. Taken together with broader policy recommendations, they are supposed to ambitiously lead the EU on the path of sustainable growth.
The Commission’s president, Jose Manuel Barroso, commented that this step was mainly about assisting EU Member States to get out of the crisis for good while giving them country-specific recommendations on where to move next in terms of their economic and fiscal policies. As he put it, efforts and sacrifices throughout Europe has already begun paying off, growth is picking up, though still modestly. The Commission further forecasts that employment will also start increasing already this year. However, Brussels thinks that now the time has come for political reform rather than an economic one. The question is how the EU will keep up its support for reform as the crisis lessens its pressure on the economy. According to the Commission’s own analysis, sustained policy endeavors at all levels have put the eurozone economy on a firm ground, although growth rate is still expected to remain fragile in the 2014- 2015 period. Therefore, the momentum for reform must be maintained over the long term.
