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Printed: 08.05.2024.
PrintWinter-2019 Semester: the Baltic States’ position ranks positive
Generally, the EU institutions and Commission’s assistance includes
reforms’ assistance highlighted in specific recommendations for each country. For
example in 2019, the SRSP will provide technical support to 26 member states to
carry out more than 260 projects in addition to more than 290 projects during
2017-18.
Present winter “semester-package” is part of the EU’s annual
cycle of economic policy coordination among the member states; it follows the Commission
publication in November 2018 the EU-28 annual growth survey and the euro
area autumn recommendations. These documents set the developmental priorities
for the year ahead in the member states and finally reflected as the national
dimensions in the European Semester.
General web-link for semester in: https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/eu-economic-governance-monitoring-prevention-correction/european-semester_en;
On annual growth survey in:
https://ec.europa.eu/info/publications/2019-european-semester-annual-growth-survey_en
The statistics from the Commission's Winter-2019 economic
review and countries’ reports provide the background for the states national
socio-economic programs, which will be assessed again in mid-April in the
corresponding upcoming Country-Specific Recommendations later in the Spring
Package. In the Baltic States’ country reports, macroeconomic imbalances were
not specified.
More in: http://europa.eu/rapid/press-release_IP-19-1389_en.htm?locale=en
In the winter’s review, the Commission published the country
reports for all EU-28 states, including in-depth reviews for 13 countries
identified in the “alert mechanism reports” published in November 2018.
See more in:
https://ec.europa.eu/info/publications/2019-european-semester-alert-mechanism-report_en
Country reports represent analytical documents providing an
overview of both the economic and social challenges in the states and their
national policies. The reports are a tool under the European Semester, which
is the EU’s “framework for economic and social policy coordination” in monitoring
reforms’ implementation. For those EU states for which the Commission's alert
mechanism reports (in November 2018) identified the need for an in-depth
review, the country reports include an analysis into whether the countries are
experiencing macroeconomic imbalances and, if they are, to what extent.
Thus, the country reports serve as the basis for discussion
with EI states of their national policy choices ahead of designing their
national programmes in April, and will lead to the formulation in late spring
of the annual country-specific recommendations. More in:
The country reports review both reform and investment
priorities at the state’s level. This year, for the first time, they also
include identified priorities in investments for EU Cohesion Policy funding in
the period 2021-2027. It presents the Commission's view on how to maximize the
positive economic impact of the three Cohesion Policy funds: the European
Regional and Development Fund, the European Social Fund and the Cohesion Fund.
Below are some vital aspects for the Baltic States in
implementing semester’s aims.
- The national
macro-imbalance programs’ scoreboards, MIPs consist of fourteen indicators
measuring internal and external imbalances as well as social and labour market
developments. The MIPs help in understanding potential imbalances in the states,
as well as the adjustment capacity of the national economy.
In analysing MIPs, the Commission has based its economic
strategy on a ‘virtuous triangle' policy mix which combines the promotion of
reforms, investment and fiscal responsibility. Identifying and addressing
investment needs is thus a key priority of the European Semester.
As a novelty of the winter package, the Commission includes investment
challenges and priorities in the states and makes analysis as to how EU funds,
in particular EU Cohesion Policy funds, can function in the 2021-2027 budgets. This
novelty will also serve to ensure greater coherence between the coordination of
economic policies and the use of EU funds, which are a significant part of
public investment in several EU states, e.g. in the Baltics.
- The level of
employment
With 240 million Europeans currently in employment, the
level of employment in the EU is the highest ever recorded. Unemployment, at
6.6% in the EU, is also at a record low. Following years of robust growth and
job creation, the social situation continues to improve. In 2017 alone, more
than five million people were lifted out of poverty and social exclusion.
However, the analysis points to remaining challenges and
also to significant differences across Member States. In some Member States,
unemployment rates have not fully recovered and are still above 10%, while
youth unemployment remains too high. Social distress is a concern in several
Member States and inequalities are still a challenge.
-The annual
Structural Reform Support Program, SRSP
The 2019 SRSP work program sets out the priorities,
objectives and expected results while describing the actions that will be
implemented in 2019. The SRSP is managed by the Commission's Structural Reform
Support Service, which acts as a hub to gather and supply European and
international expertise.
During 2019, the SRSP will provide technical support to 26 EU
states to carry out more than 260 projects. This comes in addition to the more
than 290 projects selected in 2017 and 2018. In 2019, the programme will also
provide targeted support for reforms in the states wishing to adopt the euro.
More in:
- On national productivity
boards
The Council adopted in September 2016 a Recommendation
inviting euro area states to establish National Productivity Boards by March
2018.
See: Council
Recommendation of 20 September 2016 on the establishment of National
Productivity Boards. OJ C 349, 24.9.2016, p. 1.
These productivity boards should act as independent
institutions to investigate the states’ productivity challenges and contribute
to evidence-based policy-making at national level. The Council Recommendation
also invited the Commission to prepare a Progress Report on its implementation
and suitability by 20 March 2019.
By the end of 2018, ten euro area states - Belgium, Ireland,
France, Cyprus, Finland, Lithuania, Luxembourg, Netherlands, Portugal and
Slovenia have established National Productivity Boards, NPBs; besides, 3
non-euro area member states have identified or set up similar institutions -
Denmark, Hungary and Romania.
Remaining nine euro area states: Austria, Germany, Greece,
Estonia, Spain, Italy, Latvia, Malta and Slovakia have announced their
intention to set up boards (the process has been at an advanced stage only in
Greece, Malta and Slovakia).
Apart from Croatia, five non-euro area states: Bulgaria, the
Czech Republic, Poland, Sweden and the UK have decided not to establish NPBs;
generally, they justified their decision on the basis that they already have had
institutions performing some or all the NPBs’ tasks.
Thus, seven EU states (Denmark, Ireland, Lithuania, the
Netherlands, Portugal and Romania and Slovenia) have appointed already existing
institutions as NPBs and broadened their mandates to execute the envisaged
tasks; e.g. in Lithuania in the Ministry of Economy and Innovation with two
full-time analysts, which is somewhat exceptional among the EU states where the
number of people involved reaches 16 in Ireland. In Hungary, the Productivity
Board in chaired by the Minister of Finance.
The six states have created new bodies (Belgium, Cyprus, Finland, France, Hungary, Luxembourg), which typically rely on support from an existing structures, e.g. a ministerial department or a research institute. See more in: https://ec.europa.eu/info/sites/info/files/economy-finance/progress_report_on_the_council_recommendation_on_the_establishment_of_national_productivity_boards.pdf / 27.02.2019.
- On labour productivity
Labour productivity growth in the EU was in decline even before
the crisis; for example, the productivity gap between the EU and the US has
widened over the last two decades: in the US by about 40% and in the EU by
about 15-20%. See more in the Commission Report (2019, page 3) in: https://ec.europa.eu/info/sites/info/files/economy-finance/progress_report_on_the_council_recommendation_on_the_establishment_of_national_productivity_boards.pdf.
Generally, labour productivity and so-called “total factor productivity
growth”, TFPG in the EU and the euro area are still around their pre-crisis
level. Moreover, the recent improvement masks significant differences among the
EU states: e.g. in 2018, productivity growth ranged between -0.4% in Luxembourg
and 4.3% in Poland. Differences in labour productivity growth across EU states are
related to factors such as the catching-up process: countries with lower
initial labour productivity have shown, on average, higher productivity growth
since 1995.
Among factors affecting productivity growth and
competitiveness, the Report includes: a) sustained innovation and improvements
in education levels; b) well-functioning labour and product markets; c) access
to finance and effective insolvency frameworks; and d) a supportive business
environment. In some EU states, some other factors played an important role in
productivity growth: e.g. a slowdown in the introduction of new technologies,
competition-impeding product market regulations and malfunctioning labour
markets.
Following the winter-semester’s analysis, the EU policy
objectives are the following: - moving to a “smarter Europe” by promoting
innovative and smart economic transformation; - a greener and low-carbon economy
in the states; - a more connected Europe by enhancing mobility and regional ICT
connectivity; - a more social Europe implementing the European Pillar of Social
Rights; and - a Europe closer to citizens by fostering the sustainable and
integrated development of urban, rural, coastal areas and local initiatives.
The policy assessments in the states have shown the need for
closer links between these policies’ guidelines and the investments needs: investing
in skills must be the top priority in order to maintain competitiveness and
social cohesion.
However, there is a need “to shift up a gear”, as the
Commission acknowledged, because the demographic changes and technological
developments have been reshaping the labour market. Besides, there are skills
shortages and mismatches; the states need skilled workforce to make a
successful transition to the digitalised and carbon neutral economy. Only equipped
with the right skills, people will embrace new opportunities; to reach this
goal the states need to invest in people in order to sustain growth and boost
convergence across Europe (over 6 million adults in Europe are low qualified).
See more in
Commissioner Thyssen’s remark/27.02.2019/ in:
http://europa.eu/rapid/press-release_SPEECH-19-1452_en.htm?locale=en