The European Commission presented yesterday its Autumn Package where it sets out EU's economic and social priorities for the year ahead and gives policy recommendation for the Member States in the euro area. Belgium and four other countries were singled out. According to the Commission, economic growth is accelerating strongly, with the euro area economy on track to grow at its fastest pace in a decade this year. The good performance is propelled by resilient private consumption, robust growth around the world and falling unemployment rates.
However, "For all the reforms of the past years, Europe's Economic and Monetary Union (EMU) remains uncompleted,” said Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue. “This is why we need to use good times now to further strengthen our EMU and make our economies more resilient and inclusive.”
The Commission has also completed its assessment of whether the 2018 Draft Budgetary Plans (DBP) of euro area Member States comply with the provisions of the Stability and Growth Pact (SGP). It adopted 18 Opinions for all euro area Member States except Greece.
Dombrovski called on Member States that are at risk of non-compliance with the Stability and Growth Pact to take the necessary measures to adjust their budgetary path.
For five countries (Belgium, Italy, Austria, Portugal, and Slovenia), the draft budgetary plans pose a risk of non-compliance with the requirements for 2018 under the SGP. The budgetary plans of these Member States might result in a significant deviation from the adjustment paths towards their medium-term objectives.
Dombrovski wrote already in October to Belgian minister of finance Johan Van Overtveldt that the “structural effort” for 2018 of 0.3% of GDP is below the effort of at least 0.6% of GDP. Also the planned nominal growth rate of “net primary expenditure” exceeds the recommended rate of 1.6%, with a gap of 0.5% of GDP.
For Belgium and Italy, with estimated debt-to-GDP ratios of 104% respectively 132% in 2017, non-compliance with the debt reduction benchmark is also projected. In the case of Italy, the persisting high government debt is a reason of concern. The Commission intends to reassess Italy's compliance with the debt reduction benchmark in spring 2018.
The Brussels Times
