Brussels, 17/01/2011 (Agence Europe) - The European Union Council of Ministers' Economic Policy Committee (EPC) has described the macroeconomic assumptions set out in the first drafts of the National Reform Programmes submitted by the vast majority of Member States as “optimistic” vis-a-vis the European Commission's forecasts. The “substantial” gap reflects the countries' assumption that growth potential will pick up “faster”, explained the EPC in a memorandum to EU finance ministers meeting in Brussels on Tuesday. The EPC warns that this could have an impact on the required ambition for reform incorporated in various programmes.
In their draft reports on reforming economic governance in Europe, the European Parliament rapporteurs recommend that the member states should give detailed justifications for the differences between their own economic forecasts and those of the Commission. The reports mention the possibility of forcing some member states to use the Commission's forecasts when deciding on budget policy.
The EPC believes the draft National Reform Programmes are a good starting point, particularly when it comes to identifying macrostructural bottlenecks like labour market rigidities and insufficient levels of investment in innovation and research, but criticises the lack of tangible or detailed measures to deal with the bottlenecks. Simply focusing on budget consolidation will not suffice, warns the committee.
In the second half of April, the member states will all submit their National Economic Reform Programmes and Stability and Convergence Programmes based on the strategic guidelines to be set by the March 2011 European Council (see EUROPE 10292 and 10289). This will be a major step in the “European Semester”, a six-month period during which each member state must submit to examination by its EU peers information about its budget and economic policies for the year to come before said policies are decided upon by the national parliament. (M.B./trans fl)