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4 April 2019 European Parliament, Brussels

WORKING GROUP THE LAUNCH OF THE 2019 EUROPEAN SEMESTER CYCLE

The European Semester for economic policy coordination from a parliamentary perspective

with the participation of EU National Parliaments’ administrations

PROCEEDINGS

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Executive summaryThe third meeting of the Working group on the “European Semester for economic policy coordination from a parliamentary perspective”, composed of staff of EU national parliaments, took place on 4 April 2019 at the European Parliament’s premises in Brussels, and brought together 28 participants.

The programme was designed by the Economic Governance Support Unit (EGOV) 1 of the European Parliament in close cooperation with EU national parliament administrations. It focused on the “Winter package” of the 2019 European Semester, in particular the so-called Country Reports prepared by the Commission services. The topics were presented by colleagues from the European Commission, the European Investment Bank and EGOV.

The working group aims to enhance the co-operation among EU Parliaments administrations on the technical aspects (procedures and underlying tools) of the European Semester process. Two meetings had taken place in 2018:

• A Summer seminar on 9 July 2018 and

• A meeting on the 22 November 2018.

This summary of proceedings was prepared by EGOV.

Main issues presented and discussed during the meeting of working group:

• The common elements of the Commission Country Reports and the upcoming related steps

• The assessment of the progress on the implementation of Country Specific Recommendations

• The in-depth reviews (IDRs) for the 13 countries at risk of macroeconomic imbalances, as identified in the AlertMechanism Report of November 2018

• The investment barriers and priorities identified in the 2019 Country Reports

• The Structural Reform Support Programme (SRSP)

• The role and recent developments of the National Productivity Boards

The meeting concluded with a session among National parliaments’ and European Parliament’s administrations.

The two meetings contributed to improve the understanding of the Commission’s analyses of the economic policies of the EU Member States.. For the first time a particular focus was put on the analyses and recommendations related to investment barriers and on the role the Structural Reform Support Programme (SRSP). Furthermore, a closing session among parliament staff was dedicated to the possible modalities of future co-operation modalities among Parliaments administrations, in view of sharing experiences and identifying best practices to be discussed at upcoming summer school event.

1 EGOV provides in-house expertise to support the European Parliament and its relevant committees and bodies, notably in their scrutiny-related activities on the economic governance and banking union frameworks. It is part of the Directorate-General for Internal Policies of the Union (DG IPOL).

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The organisers would like to thank the active participation of colleagues from the European Commission services, European Investment Bank and from the EU national parliaments. During the seminar participants had also the opportunity to network and provide feedback and ideas for possible follow-up.

Background material, presentations and list of participants are available at:

http://www.europarl.europa.eu/committees/en/econ/economic-governance.html

Summary of proceedingsThe Working Group meeting on the “Winter package” of the 2019 European Semester cycle took place on 4 April at the European Parliament’s premises in Brussels. It brought together 28 officials dealing with the European Semester from 18 countries and 23 parliamentary chambers. The following EU countries’ parliaments were represented: Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, The Netherlands, Poland, Portugal, Slovenia, Spain and Sweden

1. WELCOME AND INTRODUCTION

Kajus Hagelstam and Wolfgang Lehofer (EGOV Unit, European Parliament) welcomed the participants and opened the event. They outlined the demand driven approach of this working group meeting and thanked

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the national parliament’s official for their inputs during the preparation phase. This one was already the third event dedicated to the European Semester: the high attendance shows that there is a vivid interest in closer cooperation (at technical level) among administrations, through sharing experiences and knowledge on the EU economic governance framework. The European Semester is the annual cycle of surveillance and coordination of economic policies between the European Union and its Member States.

2. THE MAIN ELEMENTS OF THE COMMISSION COUNTRY REPORTS AND THE NEXT STEPS

Sophie Dewispelaere (Secretariat General, European Commission) first presented the Winter package of the EU Semester and its main components, the Country Reports. For the first time, each Country reports includes an investment Annex that identifies the priorities for 2021-2027 cohesion policy programmes and can be used as a starting point for the negotiations between the Commission and the Member States regarding the operational plans of the cohesion funds.

For different reasons, looking at the progress on the implementation of Country-Specific Recommendations (CSRs) that were adopted in the respectively previous year may not be adequate. Looking at the implementation progress up to February 2019 of all CSRs that have been adopted since 2011 (first European Semester) leads the Commission to conclude that CSRs are indeed effective (69% display in this multiannual approach at least some progress).

Jost Angerer and Matteo Ciucci (EGOV Unit, European Parliament) presented the structure, content and potential use of an updated CSRs database prepared by EGOV. The database, which is in Excel format, provides comprehensive overviews of all CSRs as adopted by the Council since the first European Semester and of all Commission on last year’s CSRs and sub-CSRs as published in the annexes of the country reports. An interesting finding is that since 2015, the number of CSRs has significantly reduced, reflecting the streamlining and merging of recommendations, but not necessarily a lesser need for reforms.

The CSR database can be found here:

http://www.europarl.europa.eu/cmsdata/162560/CSR%20database_v75_FINAL.xlsm

3. IN-DEPTH REVIEWS (IDRS) FOR THE 13 COUNTRIES AT RISK OF MACROECONOMIC IMBALANCES AS IDENTIFIED IN THE ALERT MECHANISM REPORT OF NOVEMBER 2018

Jonas Fischer (DG ECFIN, European Commission) presented a horizontal review of the 2019 IDRs for the eleven countries identified as at risk of imbalances in the previous cycle, plus two new countries - Greece and Romania. He presented an overview of the macroeconomic context, using several graphs showing the development of various indicators, such as real GDP growth, current account balance, private sector debt, government debt, unemployment.

Emiel Afman (DG ECFIN, European Commission) and Dimitri Lorenzani (DG ECFIN, European Commission) gave overviews of the Netherlands and Italy IDRs, respectively. In the case of the Netherlands, it was noted that the large current account surplus reflects a savings-investment imbalance; furthermore, households combine high mortgage debt with illiquid housing and pension assets, making them vulnerable to shocks. For Italy, slowing growth, with downside risks, and increasing spreads on public debt, makes it harder to reduce the very high level of public debt.

In the exchange of views with the Working Group participants, panellists characterised the dialogue between national governments and the Commission as productive, with a good working relationship between stakeholders. However, there may be a need to strengthen political ownership via the Council, so as to ensure further progress.

4. INVESTMENT BARRIERS AND PRIORITIES BASED ON THE 2019 COUNTRY REPORTS

Hana Genorio (Secretariat General, European Commission) stated that the 2019 Country Reports focused more on investments to strengthen the link between the EU budget and the European Semester. The main

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objective was to move from the analysis of macroeconomic challenges to actual projects and spending at the micro-level to ensure that EU funds can contribute to addressing the identified challenges. Thus, CSRs may be based on a more comprehensive analysis of investment needs: deeper analysis, a regional dimension, and the aforementioned Annex giving guidance on where the EU cohesion funds should be spent. Nevertheless, certain challenges to this process exist, given the different stakeholders, legal bases and focus of existing processes.

Gaetano D’Adamo (DG ECFIN, European Commission) focused on investment barriers and how the European Semester addresses them. While investment is recovering to pre-crisis levels, progress is uneven across sectors and types of assets. The Commission addresses barriers by mapping the relevant policy areas for investments and by identifying the most important challenges to investment for each Member State. He noted that while most challenges are country-specific, there are also barriers at EU level.

Atanas Kolev (European Investment Bank, EIB) gave an overview of investment in the European economy, investment weaknesses and barriers to investment. Using official data and the 2018 EIB Investment survey of non-financial corporation, a few conclusions could be made. Firstly, investment has rebounded in most countries, with the corporate sector as the main driver. Secondly, important investment weaknesses can be pointed out: infrastructure and digitalisation investments remains low; European firms invest less in competitiveness-enhancing intangible assets; and the investment in climate change mitigation falls short of the committed targets. Lastly, he noted investment barriers include the availability of skilled staff, uncertainty about the future, and the EU financial sector being ill suited to support innovation.

5. THE STRUCTURAL REFORM SUPPORT PROGRAMME (SRSP)

Barbara Ochotnicka (Structural Reform Support Service, Secretariat General, European Commission) introduced the Structural Reform Support Programme, which while not directly linked to the European Semester, provides technical support to EU Member States for the design, implementation and evaluation of structural reforms. The SRSP is available to all EU Member States, and covers a wide range of reform areas, such as governance and public administration, tax revenue and public financial management, growth and business environment, labour market, health and social services, financial sector and access to finance.

Post 2020, a new Reform Support Programme will provide technical and financial support, with the overall budget increasing to €25 billion (from €222.8 million between 2017-2020). The new Programme will comprise of three instruments: the Technical Support Instrument (ex-SRSP); the Reform Delivery Tool (financial support); and the Convergence Facility (for non-euro Member States).

6. THE ROLE OF THE NATIONAL PRODUCTIVITY BOARDS

Erik Canton (DG ECFIN, European Commission) gave an overview of the state of play in the setting up of National Productivity Boards in euro area Member States, as recommended by Council. Making reference to the Commission’s Progress Report on National Productivity Boards, published on 27 February 2019, he noted that such Boards are already established in ten euro area Member States, with some variation in the organisational structure of these institutions. He explained that the main role of the European Commission in this process is to support and enhance interactions and exchange of views between the Boards themselves, and with the Economic Policy Committee. Going forward, the Commission will continue to engage with Member States that have not yet implemented a National Productivity Board, and recommend that non-euro area Member States also follow suit.

7. SESSION AMONG NATIONAL PARLIAMENTS’ AND EUROPEAN PARLIAMENT’S ADMINISTRATIONS

Working Group participants discussed the upcoming seminar, to be hosted by the Irish Parliament in Dublin 6-7 June 2019. Possible topics for discussions in June include stocktaking of current scrutiny activities at the national and European Parliament level, different national practices, nd discussion on the activities held so far and the role of the Working group on the European Semester in the future.

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Programme of the seminar

10.00 – 10.15

WELCOME AND INTRODUCTION

• Kajus Hagelstam and Wolfgang Lehofer, EGOV/EP

10.15 – 11.15

THE MAIN ELEMENTS OF THE COMMISSION COUNTRY REPORTS AND THE NEXT STEPS

Chair: Kajus Hagelstam, EGOV/EP

• Presentation, including on the assessment on CSRs implementation, Sophie Dewispelaere, SG/EC

• Presentation of the updated CSRs database, Jost

Angerer and Matteo Ciucci, EGOV/EP

• Exchange of views

11.15 – 12.30

IN-DEPTH REVIEWS (IDRS) FOR THE 13 COUNTRIES AT RISK OF MACROECONOMIC IMBALANCES AS IDENTIFIED IN THE ALERT MECHANISM REPORT OF NOVEMBER 2018

Chair: Alice Zoppé, EGOV/EP

• Presentation, including some country examples, Jonas Fischer, Dimitri Lorenzani, and Emiel

Afman, DG ECFIN/ EC

• Exchange of views

12.30 – 13.30

LUNCH BREAK

13.30 – 14.30

INVESTMENT BARRIERS AND PRIORITIES BASED ON THE 2019 COUNTRY REPORTS

Chair: Jost Angerer, EGOV/EP

• Presentation Hana Genorio, SG/EC

• Presentation Gaetano D’Adamo, DG ECFIN/EC

• Presentation Atanas Kolev, EIB

• Exchange of views

14.30 – 15.00

THE STRUCTURAL REFORM SUPPORT PROGRAMME (SRSP)

Chair: Wolfgang Lehofer, EGOV/EP

• Presentation Jerneja Jug Jerse / Barbara Ochotnicka, SRSS/SG/EC

• Exchange of views

15.00 – 15.30

THE ROLE OF THE NATIONAL PRODUCTIVITY BOARDS:

Chair: Alice Zoppé, EGOV/EP

• Presentation Erik Canton, DG ECFIN/EC

• Exchange of views

15.30 – 16.15

SESSION AMONG NATIONAL PARLIAMENTS’ AND EUROPEAN PARLIAMENT’S ADMINISTRATIONS • Pilot project: parliamentary involvement in the various

stages of the Semester

• Summer Seminar outline/exchange of ideas

• Conclusions on possible follow-up

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List of participants

National parliaments

Country Organisation Unit Title Name SurnameAustria Austrian Parliament Parliamentar Budget

OfficeMr Helmut Berger

Belgium Belgian House Of Representatives

Eu-Taskforce Mr Tom De Geeter

Belgium Belgian House Of Representatives

Eu-Dept. Mr Jansoone Roeland

Belgium Flemish Parliament European Office Mr Dries Bergen

Bulgaria National Assembly Of The Republic Of Bulgaria

Committee On Budget And Finance

Ms Vesela Shikova

Czech Republic

Senate Of The Parliament Of The Czech Republic

Eu Affairs Unit Ms Dita Voleska

Czech Republic

The Parliament Of The Czech Republic

Chamber Of Deputies Mr Jan Vlna

Denmark Folketinget Det Internationale Sekretariat

Ms Hanne Lange

Denmark Danish Parliament International Department

Mr Martin Jørgensen

Finland Eduskunta - Parliament Of Finland

Eu Secretariat Mr Eero Säynäjäkangas

Finland Eduskunta - Parliament Of Finland

Secretary Of The Grand Committee

Ms Helmiina Aimala

Germany German Parliament - Deutscher Bundesrat

Vertretung des Landes Nordrhein-Westfalen beim Bund

Mr Sebastian Gröning-von Thüna

Germany German Parliament - Deutscher Bundestag

Unit Pe 2 Ms Judith Siller

Germany German Parliament - Deutscher Bundestag

Eu Liaison Office (Pe 4) Ms Vesna Popovic

Greece Hellenic Parliament Directorate For European And Bilateral Affairs

Mr Ioannis Nychas

Ireland Houses Of The Oireachtas

Eu And External Relations

Ms Michelle Grant

Ireland Houses Of The Oireachtas

Parliamentary Budget Office

Mr Austin Delaney

Ireland Houses Of The Oireachtas

Committees Secretariat Ms Catherine Mccarthy

Italy Italian Senate Ms Beatrice Gianani

Italy Italian Chamber Of Deputies

Ms Maria Schinina

Luxembourg Luxembourg Chamber Of Deputies

International Relations Department

Mr Carl Yves

The Netherlands

Dutch Senate Standing Committee On Finance

Ms Saliha Kilic

Poland Sejm European Union Affairs Mr Artur Zaniewski

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Portugal Assembly Of The Republic

Committees Secretariat Mr Bruno Pinheiro

Slovenia National Assembly - Državni Zbor

Committee On Eu Affairs Ms Romana Novak

Spain The Spanish Parliament - Senate

Comisiones Ms Mª Teresa Gonzalez Escudero

Spain The Spanish Parliament - Cortes Generales

General Secretariat Ms Carmen Sanchez Abarca Gornals

Sweden Sveriges Riksdag Secretariat Of The Chamber / Eu Co-Ordination

Mr Jakob Nystrom

European Parliament

Organisation Unit Title Name SurnameEuropean Parliament DG IPOL - Dir. A - Economic

Governance Support UnitMr Jost Angerer

European Parliament DG IPOL - Dir. A - Economic Governance Support Unit

Mr Matteo Ciucci

European Parliament DG IPOL - Dir. A - Economic Governance Support Unit

Mr Kajus Hagelstam

European Parliament DG IPOL - Dir. A - Economic Governance Support Unit

Mr Wolfgang Lehofer

European Parliament DG IPOL - Dir. A - Economic Governance Support Unit

Ms Alice Zoppé

European Commission and European Investment Bank

Organisation Unit Title Name SurnameEuropean Commission SG - Dir D - European Semester,

European Strategic Investment & Cohesion

Ms Sophie Dewispelaere

European Commission SG -Dir. B - Macroeconomic imbalances and adjustment - Economic Policy

Mr Jonas Fischer

European Commission SG -Dir. E - Estonia, Latvia, Lithuania, Netherlands

Mr Emiel Afman

European Commission SG -Dir. G - Italy, United Kingdom Mr Dimitri Lorenzani

European Commission SG - Dir D - European Semester, European Strategic Investment & Cohesion

Ms Hana Genorio

European Commission SG - Dir B. - Assessment and benchmarking of national reforms

Mr Gaetano D’Adamo

European Investment Bank SG Mr Atanas Kolev

European Commission SG - Structural Reform Support Service

Ms Barbara Ochotnka

European Commission SG -Dir. B - Assessment and benchmarking of national reforms

Mr Erik Canton

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