Economic policy of the euro area - Main contents
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Contents
official title
Council Recommendation of 8 March 2016 on the economic policy of the euro area| Legal instrument | Recommendation |
|---|---|
| Original proposal | COM(2015)692  |
| CELEX number i | 32016H0311(01) |
| Document | 08-03-2016; Date of adoption |
|---|---|
| Publication in Official Journal | 11-03-2016; OJ C 96 p. 1-3 |
11.3.2016 |
EN |
Official Journal of the European Union |
C 96/1 |
COUNCIL RECOMMENDATION
of 8 March 2016
on the economic policy of the euro area
(2016/C 96/01)
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 136, in conjunction with Article 121(2) thereof,
Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
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 (2), and in particular Article 6(1) thereof,
Having regard to the recommendation of the European Commission,
Having regard to the conclusions of the European Council,
Having regard to the opinion of the Economic and Financial Committee,
Having regard to the opinion of the Economic Policy Committee,
Whereas:
(1) |
According to the Commission’s 2015 autumn economic forecast, the economic recovery continues at a moderate pace in the euro area. Sustaining and strengthening growth in the euro area requires continued policy efforts to support a balanced adjustment in the private and public sectors, improve the adjustment capacity and increase the economy’s competitiveness and growth potential in the medium to long term. The pace of growth is hampered by legacies of the most recent economic and financial crises, including ongoing external rebalancing, high levels of public and private debt, high unemployment, as well as persistent structural rigidities in national labour and product markets. Investment remains weak on account of these factors, but also of other bottlenecks, such as unfavourable business environments, public-administration inefficiencies as well as obstacles to access to finance. |
(2) |
The implementation of ambitious structural reforms that raise productivity and boost growth potential needs to be bolstered in line with the policy priorities set out in the Commission’s 2016 Annual Growth Survey for all Member States. If carried out jointly across Member States, structural reforms can offer benefits to the euro area as a whole through positive spillover effects, in particular through trade and financial channels. Despite some progress with reforms to improve the resilience of labour markets, significant divergences persist across the euro area, especially as regards long-term and youth unemployment rates. Those Member States that pursued comprehensive labour market and social protection reforms prior to the crisis have been able to better support employment and preserve fairness during the economic downturn. Such reforms encompass flexible and reliable contractual arrangements, comprehensive lifelong learning strategies, effective active labour market policies, and adequate and sustainable social protection systems. Also, reducing the tax wedge on labour, in particular for low-income earners, and ensuring equitable tax systems can improve outcomes. |
(3) |
An appropriate development and swift implementation of reforms can help in addressing existing imbalances in the euro area and in preventing the build-up of new ones. The thematic discussions within the Eurogroup, with increased focus on benchmarking, pursuing best practices and peer pressure, can contribute to promoting convergence towards best performance. The Eurogroup should therefore further strengthen the thematic discussions on reforms in areas that are essential for the functioning of Economic and Monetary Union (EMU) and regularly monitor the implementation of reforms by euro area Member States as well as the progress made with the correction of imbalances in the context of the macroeconomic imbalances... |
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