Recommendation 2010/410 - Broad guidelines for the economic policies of the Member States and of the Union - Main contents

EN

Official Journal of the European Union

L 191/28

The Treaty provides that Member States are to regard their economic policies as a matter of common concern and to coordinate them within the Council. In accordance with Treaty provisions, the European Union has developed and implemented policy coordination instruments for fiscal policy (the Stability and Growth Pact) and macro-structural policies.

The Treaty provides that employment guidelines and broad economic policy guidelines are to be adopted by the Council to guide Member States’ policies.

The Lisbon Strategy, launched in 2000, was based on an acknowledgement of the European Union’s need to increase employment, productivity and competitiveness, while enhancing social cohesion, in the face of global competition, technological change, environmental challenges and an ageing population. The Lisbon Strategy was re-launched in 2005, after a mid-term review which led to greater focus on growth, more and better jobs.

The Lisbon strategy for growth and jobs helped forge consensus around the broad direction of the Union’s economic and employment policies. Under the strategy, both broad economic policy guidelines and employment guidelines were adopted by the Council in 2005 (1) and revised in 2008 (2). The 24 guidelines laid the foundations for the national reform programmes, outlining the key macroeconomic, microeconomic and labour-market reform priorities for the Union as a whole. However, experience shows that the guidelines did not set clear enough priorities and that links between them could have been stronger. This limited their impact on national policy-making.

The financial and economic crisis that started in 2008 resulted in a significant loss in jobs and potential output and has led to a dramatic deterioration in public finances. The European Economic Recovery Plan (3) has nevertheless helped Member States to deal with the crisis, partly through a coordinated fiscal stimulus, with the euro providing an anchor for macroeconomic stability. The crisis therefore showed that economic policy coordination at the level of the Union can deliver significant results if it is strengthened and rendered effective. The crisis also underscored the close interdependence of the Member States’ economies and labour markets.

The Commission proposed setting up a new strategy for the next decade, the Europe 2020 Strategy (4), to enable the Union to emerge stronger from the crisis, and to turn its economy towards smart, sustainable and inclusive growth. Five headline targets, listed under the relevant guidelines, constitute shared objectives guiding the action of the Member States, taking account of their relative starting positions and national circumstances, and of the Union. Member States should make every effort to meet the national targets and to remove the bottlenecks that constrain growth.

As part of comprehensive ‘exit strategies’ for the economic crisis, Member States should carry out ambitious reform programmes to ensure macroeconomic stability and the sustainability of public finance, improve competitiveness, and reduce macroeconomic imbalances and enhance labour market performance. Temporary measures introduced in response to the crisis should be withdrawn in a coordinated manner as appropriate when the recovery is secure....