More time, but also more reforms

29 May 2013

Today (29 May 2013) was an important date in the annual calendar of European economic governance. For many countries, the main mantra offered by the Commission was ‘more time, but more reform’.

More time, but also more reforms

The proosals mean more time for countries to be able to cut their countries’ deficits, but at the same time applying reforms with more intensity and with more vigour.

As part of the European Semester, the European Commission published its Country Specific Recommendations (CSRs). The recommendations are based on a thorough assessment of the economic, employment and budgetary situation in each country and on the policies they have submitted. The Commission will, when it deems it necessary, recommend further measures for Member States to adopt over the following year. The recommendations will be endorsed by the European Council in June and formally adopted by the Council in July. The aim of the discussion of the CSRs at the highest level of politics is to apply a certain amount of peer pressure on Member States to follow the recommendations. Member States do have the opportunity to amend the proposals when they are debated in the Council.

The European Commission has offered “breathing space” to certain Member States including France and Spain, which “should be used to intensify reforms, continue reducing debt and pave the way for a sustainable recovery.” Notably none of the countries which are currently undergoing a financial bail-out programme, such as Portugal, have been offered additional time, indeed no new proposals have been put forward. Commenting on the CSRs, CESI President Romain Wolff did not take a reactionary approach to the Commission’s proposals: “On the face of it, the Commission might be trying to give the impression that it is easing off of austerity; that would be a popular headline. However, if you look at bit closer into the detail, what is being asked for is more reforms in return. These reforms should not be reactionary cuts, but need to be carefully measured, taking into account the long-term implications.”

CSRs Photo 1

One immediate worry for example is the encouragement for certain countries to increase the cost-effectiveness of the health care system. Cuts in health care systems in Central and Eastern Europe have been shown to have a detrimental effect on the provision of health care quality, in part as a result of a brain-drain effect of high skilled doctors. Lessons are there to be learnt from.

CESI welcomes the elements of the CSRs which attempt to address the “most urgent economic and social problems” in the EU, such as more effective, targeted support to the long term unemployed. Long-term unemployment, in particular for young people, will have devastating implications in the future if they go unaddressed.

More information on the Country Specific Recommendations, including the country by country reports can be read here.

For a FAQ on Country Specific Recommendations click here.