Brussels, 17/02/2016 (Agence Europe) - The European leaders are to adopt a recommendation specific to the eurozone, at the summit of Thursday 18 and Friday 19 February.
The European Commission presented the draft recommendation at the same time as the documents marking the launch of the 2016 exercise of the so-called 'European Semester' budgetary process (see EUROPE 11439). Anticipating this presentation at European level allows the countries of the eurozone to take account of this recommendation in their preparations for the stability and reform programmes they are to submit to the Commission in April. This initiative therefore aims to improve economic convergence within the eurozone.
Listing general principles, the 'eurozone' recommendation calls upon the Nineteen to “pursue policies that support the recovery, foster convergence, facilitate the correction of macroeconomic imbalances and improve adjustment capacity”, reads the text, of which EUROPE has had sight. In particular, countries such as Germany which have recorded “large current-account surpluses” should “implement as a priority measures, including structural reforms, that help strengthen their domestic demand and growth potential”.
The reforms recommended include the introduction of “flexible and reliable” labour contracts that promote smooth labour market transitions, the creation of “sustainable” social protection systems that contribute to social inclusion and labour market inclusion, and the creation of “open and competitive” product and services markets. There is a need to “reduce the tax wedge on labour, particularly on low earners, in a budgetary-neutral way”, the text stresses.
On the budgetary level, the recommendation calls for a differentiation of the “fiscal effort by individual member states in line with their respective positions vis-à-vis the requirements under the Stability and Growth Pact (…) as well as taking into account possible spillovers across euro area countries”.
The recommendation also argues the need to “facilitate the gradual reduction of banks' non-performing loans”. It goes on to call upon the countries in question to “promote an orderly deleveraging, including by facilitating the resolution of unviable private debt”. (Original version in French by Mathieu Bion)
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