Changes from plenary report to adopted text

The European Parliament,

– having regard to the Treaty on the Functioning of the European Union (TFEU), in particular Articles 121(2) and 136 thereof,

– having regard to Protocol No 1 to the Treaty on European Union (TEU) and the TFEU on the role of national parliaments in the European Union,

– having regard to Protocol No 2 to the TEU and TFEU on the application of the principles of subsidiarity and proportionality,

– having regard to the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union,

– having regard to the Paris Agreement of the United Nations Framework Convention on Climate Change and the Sustainable Development Goals,

– having regard to Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States,

– having regard to Council Regulation (EU) No 1177/2011 of 8 November 2011 amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure,

– having regard to Regulation (EU) No 1173/2011 of the European Parliament and of the Council of 16 November 2011 on the effective enforcement of budgetary surveillance in the euro area,

– having regard to Regulation (EU) No 1174/2011 of the European Parliament and of the Council of 16 November 2011 on enforcement measures to correct excessive macroeconomic imbalances in the euro area,

– having regard to Regulation (EU) No 1175/2011 of the European Parliament and of the Council of 16 November 2011 amending Council Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies,

– having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances,

– having regard to Regulation (EU) No 472/2013 of the European Parliament and of the Council of 21 May 2013 on the strengthening of economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect to their financial stability,

– having regard to Regulation (EU) No 473/2013 of the European Parliament and of the Council of 21 May 2013 on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area,

– having regard to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (RRF Regulation),

– having regard to the Commission communication of 4 March 2021 entitled ‘The European Pillar of Social Rights Action Plan’ (COM(2021)0102),

– having regard to the Porto Social Commitment of 7 May 2021 of the Council, the Commission, Parliament and social partners,

– having regard to the European Fiscal Board assessment of 28 June 2023 on the fiscal stance appropriate for the euro area in 2024,

– having regard to the European Fiscal Board annual report of 4 October 2023,

– having regard to the Commission communication of 9 November 2022 on orientations for a reform of the EU economic governance framework (COM(2022)0583),

– having regard to the Commission proposal of 26 April 2023 for a regulation of the European Parliament and of the Council on the effective coordination of economic policies and multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97 (COM(2023)0240),

– having regard to the Commission proposal of 26 April 2023 for a Council regulation amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure (COM(2023)0241),

– having regard to the Commission proposal of 26 April 2023 for a Council directive amending Directive 2011/85/EU on requirements for budgetary frameworks of the Member States (COM(2023)0242),

– having regard to the Granada Declaration adopted on 6 October 2023,

– having regard to the Commission communication of 21 November 2023 entitled ‘Annual Sustainable Growth Survey 2024’ (COM(2023)0901),

– having regard to the Commission’s Autumn 2023 Economic Forecast of 15 November 2023,

– having regard to Rule 54 of its Rules of Procedure,

– having regard to the opinion of the Committee on Budgets,

– having regard to the report of the Committee on Economic and Monetary Affairs (A9-0063/2024),

A. whereas the European Semester plays an essential role in coordinating economic, budgetary, structural, social and employment policies in the Member States, thereby safeguarding the macroeconomic stability of the Economic and Monetary Union;

I. whereas a swift, decisive and coordinated policy response allowed the EU economy to rebound and tackle the socioeconomic consequences of the COVID-19 pandemic and Russia’s war of aggression against Ukraine, and to navigate through the resulting energy crisis; whereas the economy slowed down in 2023; whereas the outlook remains characterised by high uncertainty and risks related to the evolution of Russia’s ongoing war of aggression against Ukraine and the conflict in the Middle East;

J. whereas those disruptive geopolitical events have demonstrated the need for the European Union to further strengthen its open strategic autonomy and remain competitive in the global market, while ensuring that no one is left behind;

K. whereas EU funding has contributed to macroeconomic strength at EU level and increases the EU’s internal and external resilience in times of crisis, while supporting the Member States in financing necessary investments in EU priorities to tackle current and future challenges;

L. whereas after a sizeable crisis-related expansion between 2020 and 2022, the fiscal stance in the euro area is expected to be restrictive in 2023 and 2024; whereas the fiscal stance should remain agile in the face of high uncertainty;

M. whereas net public investment as a percentage of GDP fell sharply in the EU after the financial crisis resulting from the COVID-19 pandemic, reaching negative levels in some instances; whereas this ratio has not yet fully recovered; whereas the success of climate-neutral policies and the digital transformation relies on a common European approach and requires measures both at the EU and Member State level; whereas the future resilience of the EU is closely linked to increased public and private investments for sustainable growth and an ambitious structural reform agenda; whereas addressing the need for a timely strategy to ensure appropriate public investment levels following the expiration of the Recovery and Resilience Facility (RRF) in 2026 is imperative; whereas achieving the goals of the European Green Deal and the Paris Agreement requires significant public and private investments;

N. whereas the Member States need to have the necessary monitoring and auditing mechanisms in place to ensure respect for the rule of law and to protect the EU’s financial interests, notably to prevent fraud, corruption and conflicts of interest and to ensure transparency; whereas it is important that the Member States implement the relevant enabling country-specific recommendations (CSRs) in this regard;

Economic prospects for the EU

1. Expresses its concerns about the economic situation, persistent uncertainty, weak growth, competitiveness and productivity in the EU; notes with concern the continuous impact of energy prices and inflation on the purchasing power of households, resulting in an increased risk of poverty, including energy poverty, for many Europeans, and on the ability to perform of EU companies, including small and medium-sized enterprises (SMEs); calls on the Member States to take further steps to overcome those difficulties and to implement targeted measures to ensure fair competition in the single market and address persistent inflationary pressures;

2. Notes that many Member States are suffering from structural challenges that hinder their growth potential; highlights that tackling structural challenges is crucial for a sustainable recovery and continued growth, and that implementing reforms to address structural vulnerabilities is key not only to improving the ability to withstand and cope with existing challenges, but also to accomplishing the twin transitions in a sustainable and fair manner; highlights that ambitious structural reforms remain essential to strengthen the EU’s economic base, promote business creation and entrepreneurship and strengthen the EU’s competitiveness, productivity and overall growth potential;

3. Stresses that a lack of public and private investments in certain Member States is hindering the potential of socially balanced and sustainable growth; considers that predictable rules, a level playing field and reduced compliance costs are crucial factors in attracting investment; highlights that these investments are crucial for the EU’s ability to cope with existing challenges, including the just green and digital transitions, and that they will increase the EU’s resilience and long-term competitiveness during upcoming challenges; believes that these investments should be accompanied with growth- and resilience-enhancing reforms; calls attention to the investments in renewables and energy efficiency that are needed to, among other things, make the EU independent from imported fossil fuels and limit inflation driven by energy prices; takes note of the contractionary fiscal stance expected in 2023 and 2024; highlights that any contraction should not come at the expense of investment, which should be increased across the Union;

4. Stresses that further deepening the single market and removing barriers to investment, including through reforms that streamline and digitalise planning, permitting and other administrative procedures, would help boost private investment; reiterates that industrial policy, as well as deep and integrated EU capital markets and innovation, can also contribute by supporting investment, safeguarding EU global competitiveness and mitigating risks linked to excessive reliance on a limited number of non-EU countries for key technologies, raw materials and industrial inputs;

5. Invites the Member States to conduct spending reviews as a regular part of the (multi)annual budgetary process, which would help improve the efficiency and quality of public expenditure; concurs with the Commission’s recommendation in the 2024 Annual Sustainable Growth Survey that Member States should wind down crisis-related energy support measures and phase out fossil fuel subsidies as soon as possible; stresses that both government revenues and government spending are essential to guarantee the sustainability of public finances; calls on the Member States to take action to tackle tax fraud, tax avoidance, tax evasion and money laundering; welcomes the agreement on the anti-money laundering package in this regard;

6. Concurs with the Commission’s assessment that risks related to high debt and price divergences remain relevant, in particular in Member States where debt servicing requires large rollovers of debt, or where the private sector faces steep increases in interest payments;

7. Calls on the Member States in the euro area to explore all means to complete the revision of the European Stability Mechanism Treaty to allow for the introduction of the common backstop to the Single Resolution Fund, which would further strengthen the euro area’s resilience;