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Leaders endorse EU's economic priorities for 2013

<p>Rosen Plevneliev, President of the Republic of Bulgaria; <br />Dalia Grybauskaite, President of Lithuania; <br />and Joseph Muscat, Maltese Prime Minister. <br />Mr Plevneliev and Mr Muscat participated <br />for the first time in a European Council meeting</p>
<p> </p>
<p>© European Union 2013</p>

Rosen Plevneliev, President of the Republic of Bulgaria;
Dalia Grybauskaite, President of Lithuania;
and Joseph Muscat, Maltese Prime Minister.
Mr Plevneliev and Mr Muscat participated
for the first time in a European Council meeting

 

© European Union 2013

At the European Council meeting on 14-15 March the EU leaders endorsed the Union's economic priorities for 2013 and provided strategic guidance for the member states' national budgetary policies and structural reforms for this year. This is part of the six-month policy coordination cycle between the EU member states, known as "the European Semester".

 

"We are all fully aware of the debate, and of people's mounting frustrations and even despair. We also know there are no easy answers. The only way out of the crisis is to keep tackling its root causes. Around the table, there was a strong sense of agreement about this", said Herman Van Rompuy, President of the European Council.

 

The five agreed EU economic policy priorities are:

 
  • differentiated, growth-friendly fiscal consolidation,
  • restoring normal lending to the economy,
  • promoting growth and competitiveness,
  • tackling unemployment,
  • modernising public administration.

 

 

The leaders emphasised that particular priority should be given to supporting youth employment and promoting growth and competitiveness.

 

Guidelines for the member states

 

According to the European Semester procedure, the member states will have to draft plans for their structural reforms and budgetary policies in 2013, taking into account the guidelines issued by the European Council.

 

With regard to budgetary policies, the European Council stressed the need for fiscal consolidation while at the same time ensuring economic growth.

 

Member states' expenditure and revenue measures, including short-term targeted measures, should therefore "boost growth and support job creation", particularly for the young.

 

The European Council reaffirmed that, under the Stability and Growth Pact rules, member states are able to balance productive public investment with fiscal discipline.

 

The leaders also called for structural reforms aimed at promoting sustainable growth, employment and competitiveness as well as the correction of macroeconomic imbalances.

 

Shifting taxation away from labour, improving the efficiency of tax collection and tackling tax evasion were mentioned as being among the priority structural reforms.

 

Priority areas for growth and jobs

 

The European Council emphasised three areas of specific importance in order to boost growth and jobs:

 

  • Unemployment was considered to be the most significant social challenge, and in particular youth employment. The Youth Employment Initiative should be fully operational as of January 2014. Funding from structural funds could contribute to combating youth unemployment. Leaders recommend a rapid implementation of the Youth Guarantee, which aims to ensure that all young people are quickly offered employment or training after becoming unemployed.

 

  • the Single Market continues to be a key driver for growth and jobs. The European Council recommends that work on all Single Market Act I proposals be concluded rapidly. This is an essential priority, in particular as regards key dossiers such as accounting, professional qualifications, public procurement, the posting of workers and e-identification/e-signature.

 

  • More must be done to cut red tape, both at EU and national level. Member states and the Commission should promote smart regulation, with particular emphasis on the needs of small and medium-sized enterprises. The Commission will identify regulatory areas and pieces of legislation with the greatest potential for simplifying rules and reducing regulatory costs.

 

In 2012, €16 billion of unused EU structural funds were redirected towards countries most affected by youth unemployment. That money helped some 800 000 young people and 55 000 small companies all over Europe.

 

Next steps

 

According to the European Semester procedure, member states will have to draft plans for their structural reforms and differentiated, growth-friendly fiscal consolidationin 2013, taking into account the guidelines issued by the European Council.

 

The plans will be outlined in the national reform programmes and in stability (for euro area members) or convergence (non-euro area members) programmes. These documents will be reviewed by the Commission in April.

 

The Commission will then evaluate member states' plans and prepare recommendations for each country. The recommendations will be endorsed by the European Council in June. The European Semester cycle will end with an evaluation of how the recommendations have been implemented.

 

See also:

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