Changes from report parliamentary committee draft to plenary report

Added4. 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;

Removed4. Recalls that the European Semester is the established framework for coordinating the budgetary, economic, social and employment policies across the Union in accordance with the Treaties, including the European Pillar of Social Rights, thereby safeguarding its macroeconomic stability and its social cohesion;

Added5. 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;

Removed5. Is concerned about the deterioration of the social dimension of the European Semester resulting from the self-limitation of country-specific recommendations (CSRs) to the implementation of national recovery and resilience plans (RRPs) and about the declining number of social CSRs based on the Social Scoreboard; calls on the Commission to link the CSRs more closely to the respective country reports;

Added6. 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;

Removed6. Shares the view that the 2024 CSRs need to be focused on a limited set of challenges; underlines that CSRs must equally serve to enhance competitiveness, promote the green and digital transitions and ensure social fairness; stresses that CSRs need to take account of social vulnerabilities;

Added7. 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;

Removed7. Is concerned that the performance-based financing and verification system of the RRF delivers in practice too little in terms of results and creates too much bureaucracy; calls for more flexibility to adjust milestones and targets to take account of lessons learned during the implementation process;

AddedEuropean Semester and the RRF

Removed8. Supports streamlining EU cohesion policy programmes with investment needs identified under the RRF and in CSRs; recalls that cohesion policy serves a broader set of objectives than the RRF; calls for a comparable incorporation of stakeholder participation in the drafting and implementation of national RRPs as it is for cohesion policy programmes;

Added8. Recalls that the European Semester is the well-established framework for coordinating the budgetary, economic, social and employment policies across the Union in accordance with the Treaties, including the European Pillar of Social Rights, thereby safeguarding its macroeconomic stability, the sustained convergence of the economic performances of the Member States and the EU’s social cohesion; calls for stronger national ownership in the European Semester by the Member States, for example through their local and regional authorities; notes that the 2023 Green Deal industrial plan is part of the EU’s growth strategy;

RemovedReform of the EU economic governance framework

Added9. Shares the view that the 2024 CSRs need to be focused on specific criteria; underlines that they must also serve to promote sound and inclusive economic growth, enhance competitiveness and macroeconomic stability, promote the green and digital transitions and ensure social and inter-generational fairness; takes account of the differences regarding the national forecasts for GDP growth, inflation, unemployment, general government balance, gross public debt and current account balance and notes that they demonstrate the need for flexible approaches based on the specific reality of each Member State; calls, in that regard, on the Commission to link the CSRs more closely to the respective country reports; calls for efficient monitoring of the implementation of the CSRs and the relevant reforms, as well as of the progress on reducing identified investment gaps; stresses that the CSRs need to take account of social vulnerabilities and unemployment; notes the declining number of social CSRs based on the social scoreboard;

Removed9. Considers it necessary to reform the EU fiscal rules and welcomes the proposals put forward by the Commission;

Added10. Welcomes flexibility in adjusting the RRF, e. g. in the context of REPowerEU, based on lessons learned from its implementation; highlights that the milestones and targets in national recovery plans should be consistent with the CSRs and that Member States should address at least a significant subset of the CSRs, as part of their national recovery and resilience plans; emphasises the RRF’s success; recalls that the success and the effectiveness of the financed projects will be measured by their impact on the economy and employment and calls for a rapid, transparent and effective implementation of these projects; underlines, in this regard, that compliance with the RRF Regulation and proper implementation is crucial for the credibility of the RRF;

Removed10. Underlines that the reform must lead to a simplification of the framework, be more country-specific and strengthen its enforceability, and enable Member States to meet the public investment needs for the green and digital transitions of their economies without undermining the sustainability of government debt;

Added11. Notes the role played by the RRF in addressing global challenges stemming from the green transition and the digital transformation of the economy; stresses that reforms and investments under the recovery and resilience plans contribute to the climate targets of the RRF Regulation and respect the ‘do no significant harm’ principle; calls on the Member States to make the most of this opportunity and to use the RRF to transform their economies and make them more competitive; recalls the importance of verifying that the funds reach the real economy and SMEs and underlines the importance of accountability and transparency for bodies that receive EU funding;

Removed11. Welcomes that lessons have been learned from the design choices of the RRF in linking national fiscal, reform and investment commitments with EU financial incentives such as grants and loans; greatly regrets that, unlike the RRF, the reform of the economic governance framework lacks the incentive mechanisms to support and promote necessary national policy reforms and investments; is concerned that some Member States will not have the financial capacity to finance the just green and digital transition on their own;

Added12. Underlines the importance of private and public investment in the context of the economic recovery and in managing the twin transitions; recalls that the RRF does not replace the specific role of national public investment; reiterates the need to ensure quality, transparency and accountability in public investment and national strategies to align with the objectives of the twin transitions; highlights that these nation strategies for the twin transitions should complement the RRF and other European investment instruments;

Removed12. Deplores that the interplay between macroeconomic imbalances and fiscal rules is not sufficiently addressed by the reform proposals; underlines that the financial stability of the EU depends on the macroeconomic balance between Member States’ economies and that restoring such a balance may require public spending;

Added13. Supports streamlining EU cohesion policy programmes with investment needs identified under the RRF and in CSRs; recalls that cohesion policy serves a broader set of objectives than the RRF and may complement the measures agreed on under the RRF; calls for stakeholder participation, including by social partners, civil society organisations and the business sector, to be comparably incorporated in the drafting and implementation of national recovery and resilience plans, as it is for cohesion policy programmes;

Removed13. Acknowledges the need to avoid enduring excessive deficits and calls for common rules based on objective criteria as a way to achieve this goal; stresses that, in return, those rules should not preclude temporary deviations from the net expenditure path due to dedicated, justifiable and strategically significant investments realising EU objectives;

Added14. Underlines that coordination between the relevant authorities, including between national governments and regional and local authorities, is essential to manage the RRF and to overcome administrative barriers and bureaucracy;

Removed14. Acknowledges the differences between individual Member States regarding the sustainability of their debt and their capacity to reduce debt while still being able to invest; emphasises therefore the need to allow Member States to have different debt reduction paths;

Added15. Takes note of the provisional political agreement reached between the co-legislators on 10 February 2024 on the reform of the EU economic governance framework, which aims to ensure the effective coordination of economic policies and the sustained convergence of the economic and social performance of the Member States;

Removed15. Welcomes the fact that the Commission negotiates with the Member States individual fiscal-structural plans; underlines that such an increase in discretionary power for the Commission must be accompanied by increased accountability towards the European Parliament;

Added16. Welcomes the lessons learned from the design choices for the governance of the RRF; notes that the reform of the economic governance framework does not provide EU financial incentive mechanisms to support and promote national policy reforms and investments; stresses that providing for the necessary level of public investment is crucial to achieve the main objectives of the reform of the economic governance framework and to address the current and future priorities of the Union; is concerned that some Member States will not have the financial capacity to finance the just green and digital transitions on their own;

Removed16. Considers the stronger involvement of national parliaments in determining the content and voting on fiscal structural plans to be a meaningful way to increase national ownership of fiscal structural plans;

Added17. Emphasises the role of the European Parliament in the EU’s economic governance framework and advocates for an increased engagement of the European Parliament in the European Semester, while fully respecting the competences established by the Treaties; notes the dialogue between the Commission and the Member States on their individual fiscal-structural plans; stresses the need for all Member States to be treated equally; underlines that an increase in discretionary power for the Commission in the development process for the medium-term fiscal-structural plans must be accompanied by increased compliance with the rules under the scrutiny of the European Fiscal Board, as well as increased accountability and an increase in the flow of information towards the European Parliament; recognises that the Economic Dialogue as part of the European Semester lays a useful foundation of accountability; considers that proper accountability would require that the European Parliament have instruments that allow it to apply consequences based on its assessment of the performance of the European Semester, in accordance with the Treaties;

Removed17. Recognises that the Economic Dialogue as part of the European Semester lays a useful foundation of accountability, but considers that proper accountability can only be achieved if the European Parliament has accountability instruments that allow it to apply consequences based on its assessment of the performance of the European Semester such as veto rights or holding Commissioners personally responsible;

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18. Instructs its President to forward this resolution to the Council and the Commission.