Changes from report parliamentary committee draft to plenary report

EXPLANATORY STATEMENT

The European Semester is a significant instrument for coordinating economic and budgetary policy across Member States in the EU with wider implications across other policy areas. The 2026 own initiative report on the European Semester emphasises the considerable investment needs that the EU faces in a situation of increased geopolitical uncertainty, threats on its eastern borders, and major structural challenges related to the competitiveness, resilience and sustainability of the European economy. The rapporteur stresses the need for the EU to meet these challenges and mobilise the necessary public and private investments, in particular related to the green transition, competitiveness and security and defence. The report commends the Commission on the EU-wide instruments applied in response to recent challenges and external shocks, including the Recovery and Resilience Facility (RRF) and the Security Action for Europe (SAFE) instrument, yet expresses concern that we are still far from the targets detailed in the Draghi report for meeting the EU’s wider investment needs.

The draft report notes that deficit and debt levels vary quite significantly across Member States, which require tailormade policies and recommendations to achieve long-term fiscal sustainability. The report also notes that the average employment rate across the EU has reached a record high. At the same time, the report notes with concern that the RRF is coming to an end in 2026, which may have a negative impact on the overall fiscal stance of the EU. The report also expresses concern over the impact that extreme weather events may have on public finances in the coming years, as well as over the macroeconomic risks associated with increased housing prices across the EU.

On Country Specific Recommendations (CSRs), the report notes the lack of progress in implementing CSRs in Member States and calls for the Commission to rethink the development of and follow-up on CSRs, in particular through a greater inclusion of the European Parliament and key stakeholders such as social partners and civil society organisations. Moreover, the rapporteur encourages the Commission to dedicate more CSRs to climate and social policies. The report also takes note of the plan to give CSRs a more central role in the coming MFF for guiding national and regional investments and reforms, and the rapporteur expresses her view that investments and reforms should be prioritised according to which are the most effective in achieving a just transitions toward a green economy.