The European Commission has published its 2026 European Semester Spring Package, including country reports and reform recommendations, and said it will propose opening an excessive deficit procedure for Bulgaria.
The European Semester is the EU’s annual cycle of economic and social policy co-ordination, producing country-by-country assessments and recommendations for national governments, the Commission said in a Questions and Answers release on Wednesday.
This year’s Spring Package includes country reports covering economic, employment and social challenges in each member state, along with country-specific recommendations for reforms and investments.
The Commission also published a report under Article 126(3) — a step used to assess whether countries comply with EU limits on budget deficits and debt — and said the assessment supports proposing an excessive deficit procedure for Bulgaria.
It said five member states exceeded, or planned to exceed, the EU’s 3% of GDP deficit reference value in 2025 and/or 2026: Bulgaria, Germany, Estonia, Latvia and Slovenia.
The Commission added it will continue to monitor the other four countries and may re-examine their position in autumn.
Malta’s excessive deficit procedure should be closed because its deficit was brought below 3% of GDP in 2025 and is projected to remain below that level in 2026 and 2027.
For other countries already under the procedure — Belgium, France, Italy, Hungary, Austria, Poland, Romania, Slovakia and Finland — the Commission said it considers effective action has been taken at this stage and the procedures are being held in abeyance.
Housing annexes added for first time
For the first time, each country report includes a dedicated annex on housing, providing an analysis of housing markets across all 27 EU member states, the Commission noted.
It listed measures referenced in recommendations including increasing the stock of social and affordable housing, boosting overall housing supply, and simplifying and accelerating permitting and planning procedures.
The Commission said the Recovery and Resilience Facility (RRF) — the EU’s post-pandemic funding programme — is due to conclude in 2026, with key deadlines including 31 August 2026 to complete milestones and targets, 30 September 2026 for the last payment requests, and 31 December 2026 for disbursements.
It added 18 member states have requested activation of the national escape clause for defence expenditure under the EU’s fiscal rules, with the Council having activated it for 17 countries, while Spain’s request received a positive assessment and a Council decision is expected within four weeks.
Defence spending across the EU is projected to rise to 2.0% of GDP in 2027, from 1.5% in 2024, according to projections using the COFOG classification methodology cited by the Commission.
