Changes between two versions
What changed between the plenary report and the adopted text
From · plenary report· 2 Mar 2026
on European Semester for economic policy coordination 2026
To · adopted text· 11 Mar 2026
European Semester for economic policy coordination 2026
AI:What changed, in short
The only substantive change is replacing 'comprehensive' with 'targeted' in the description of industrial policy.7 All other changes are formal: decimal commas are replaced with decimal points, and minor typographical errors are corrected.1234
1 change of substance · 10 formal · 0 of wording only
Written by AI from the two texts only · read the changes before relying on it · 4 Sept 2026 · Report a problem
+4 added · −6 removed · 21 changed paragraphs, packaging included.
Part 2 of 3: Paragraphs 61–96
10. Expresses concern that insufficient private and public investment is likely to hinder sustainable growth and competitiveness in Europe and prevent the EU from meeting the common priorities set out in the EU strategic agenda 2024-2029; stresses that the Member States must step up efforts to remove barriers and mobilise greater private investment in line with the Commission’s savings and investments union strategy; recognises the Commission’s political objective of simplifying the regulatory framework and significantly reducing administrative burdens to foster private investment; highlights that investments in areas such as research and development, infrastructure and innovation are urgently needed to increase the EU’s potential growth; insists on the crucial role of the next multiannual financial framework not only in providing public investment, but also in helping mobilise private investment and underlines, in this context, that financial instruments and budgetary guarantees are powerful and effective tools for achieving critical EU policy goals as well as ready-to-use EU-wide financial instruments;
11. Notes that the Commission’s European macroeconomic report acknowledges that housing affordability is a macroeconomic and social issue, in particular by imposing potential restrictions on labour mobility and weakening productivity growth over the long-term;
Change 7
Changed:12. Highlights that a consistent and comprehensivetargeted industrial policy is vital for supporting the EU’s technological transformation and secure, resilient supply chains, while preserving competitive and undistorted markets;
9 unchanged paragraphs
13. Notes that, on average, the employment rate in the EU has reached a record-high level, reflecting a dynamic labour market in most Member States; highlights the integration of the social convergence framework into the European Semester; highlights that the model of vocational education and training has proven successful in the Member States that have opted for it; regrets that large differences exist among Member States in terms of unemployment rates, particularly with regard to young people;
14. Reiterates the importance of safeguarding a level playing field in the single market and calls on the Member States to take action to deepen the single market by eliminating internal barriers;
Application of the revised EU economic governance framework
15. Recalls that the purpose of the reform of the economic governance framework is to make it simpler, more transparent and more effective with greater national ownership and better enforcement, and to improve its ability to accommodate the heterogeneity of fiscal positions, public debt and economic challenges, and to help address the medium- and long-term challenges that the EU and its Member States are facing, including by promoting countercyclical fiscal policies;
16. Highlights that, under the reformed economic governance framework, the growth in net expenditure is the single operational indicator to monitor Member States’ compliance with the respective Council recommendations; highlights that many Member States will still face insufficient fiscal capacity to meet substantial investment needs; notes that the national escape clause (NEC) has already been activated for defence expenditure only one year after the entry into force of the revised rules as a short-term response to extraordinary events beyond a country’s control; underlines that the NEC is intended for temporary, country-specific emergencies and is not suited for addressing long-term structural needs;
17. Stresses that the Commission has expanded its discretionary powers under the reformed economic governance framework, notably through the process underpinning the medium-term fiscal-structural plans; notes the European Fiscal Board’s finding that the Commission used some discretion when delaying or deciding not to open excessive deficit procedures; stresses that an even application of the EU’s fiscal rules is paramount in order to maintain the credibility of the economic governance framework, ensure equal treatment of Member States and uphold a coherent and genuinely European approach;
18. Takes note of the targeted amendments to the EU’s economic governance framework published by the Commission on 2 October 2025, aimed at establishing consistency following the most recent update to the economic governance framework;
19. Notes, with concern, the European Fiscal Board’s findings that roughly half of independent fiscal institutions did not formally participate in the preparation of the medium-term fiscal-structural plans; is of the opinion that greater participation of independent fiscal institutions would increase transparency and external oversight at a key moment of transition;
Fiscal stance
Change 8
Changed:20. Highlights that public investment has risen noticeably in recent years, with around half of the increase between 2019 and 2025 financed by the EU, primarily through the RRF; notes that these benefits are expected to continue beyond 2026, with important spillover effects across Member States and that the long-term impact of structural reforms could raise the potential output of the euro area by up to 1.31,3 % of GDP over the period 2020 to 2033 compared to a scenario without the RRF; expresses concern over the fact that the RRF is coming to an end in 2026 and at the impact that this might have on the EU’s overall fiscal stance; urges the Member States to complete the implementation of their recovery and resilience plans by August 2026; recalls that the debt issued to finance the RRF is to be repaid by 2058 in a manner that ensures the steady and predictable reduction of liabilities;
5 unchanged paragraphs
21. Notes the Commission’s recommendation that the overall fiscal stance of the Member States remain broadly neutral in 2026, despite significant disparities across the Member States;
22. Stresses that public revenue and public expenditure are essential to ensure the sustainability of national budgets; recalls the Council recommendation on the economic policy of the euro area of 17 February 2026, which calls for tax gaps to be reduced by improving tax compliance, including by addressing tax avoidance and evasion, and combating aggressive tax planning; stresses that weak enforcement in tax administration and in the fight against tax evasion and avoidance undermines fiscal sustainability and contributes to macroeconomic imbalances;
23. Takes note of the Commission’s programmatic policy shift in the current European Semester cycle, whereby the Competitiveness Compass provides guidance for the Semester package in place of the Annual Sustainable Growth Survey; highlights that this change strengthens the focus of the Semester framework; highlights the importance of continuity with regard to CSRs designed as multiannual and long-term reform commitments and to Member States’ efforts to deliver on long-term objectives; calls on the Commission to ensure a holistic vision of European competitiveness and to ensure that long-term transition priorities continue to be consistently and coherently reflected in CSRs across successive Semester cycles;
Country-specific recommendations
24. Notes that the CSRs for each Member State contain a recommendation on fiscal policy, including fiscal-structural reforms, where relevant; notes the Commission’s commitment to use the European Semester to promote competitiveness, stability, economic growth, sustainability and social fairness, and to integrate the UN Sustainable Development Goals and the European Pillar of Social Rights into the European Semester; highlights that the Semester is a key tool for coordinating sound macroeconomic and budgetary policies in the Member States, thereby safeguarding the macroeconomic stability of the Economic and Monetary Union; highlights the importance of CSRs as the cornerstone of European economic policy coordination; recalls that CSRs are policy actions that are also an integral part of the medium-term fiscal-structural plans, the national recovery and resilience plans and the announced proposal for the national and regional partnership plans;
Change 9
Changed:25. Recalls the role of CSRs in coordinating EU priorities; notes the lack of progress in the effective implementation of the CSRs; notes that between 2019 and 2023, 25.125,1 % of CSRs showed no or limited progress; calls on the Commission to rethink the way in which CSRs are developed and followed up, in particular with regard to their future role in access to EU funds; recalls its demand for fewer and more targeted CSRs;
Change 10
Changed:26. Takes note of the Commission’s ambition to further reflect in the CSRs the actions that are instrumental to the savings and investments union, as announced in its communication of 19 March 202510;2025;
8 unchanged paragraphs
27. Notes that CSRs are set to play a greater role in the next multiannual financial framework in guiding investment and reform at national and regional level; is of the opinion that the selection of reforms and investments should be guided by their effectiveness in addressing the relevant CSRs for achieving a just transition towards a green and competitive European economy; underlines that this process must be accompanied by stronger democratic scrutiny and greater ownership by Member States;
28. Stresses the growing importance of CSRs linked to the national and regional partnership plans; draws attention to the fact that there is currently no transparent or traceable methodology for developing and selecting CSRs, nor clarity on why some are proposed and others are not, which raises concerns regarding accountability and equal treatment of Member States; calls on the Commission to clarify the underlying procedures and selection criteria; underlines that any overall increase in the Commission’s discretionary power must be accompanied by corresponding ex post accountability mechanisms and a substantial improvement in the flow of information towards Parliament;
29. Notes that the 2025 CSRs focused more on competitiveness and simplification, in line with priorities identified in the Competitiveness Compass, while also highlighting the need to boost scientific excellence, research and innovation, and technology development as key drivers of long-term productivity and resilience; underlines that fewer CSRs are being dedicated to social and climate policies; notes that for some Member States, the CSRs include a recommendation to phase out fossil fuel subsidies;
30. Notes that the Commission considers the euro area recommendation to be first and foremost a steering tool for Eurogroup discussions; invites the Commission, however, to follow up on euro area recommendations, including by taking them into consideration when developing CSRs; regrets that in 2025, the Commission did not publish an overview of the implementation of euro area recommendations, as it used to do as part of its euro area reports; notes that in 2025, CSRs did not directly include any climate-change-related recommendations;
Closing the investment gap
31. Recalls that the Draghi report forcefully demonstrated the need to increase public and private investment and pursue ambitious reforms to boost EU competitiveness; calls on the Commission and the Member States to present a strategy to meet investment needs beyond 2026;
32. Believes that the EU economic governance framework should be complemented by EU-level instruments and tools, where appropriate, in order to minimise the costs for EU taxpayers and maximise efficiency in the provision of European public goods and to respond to Union-wide crises, such as the ongoing crisis in the area of security and defence; notes that EU debt securities could serve as a benchmark, thereby strengthening the integration of EU financial markets; calls for the introduction of new own resources to finance the Union’s policies; supports the creation of the European Competitiveness Fund and the Scaleup Europe Fund;
33. Underlines the European Council’s agreement to provide an EUR 90 billion loan to Ukraine for 2026 and 2027, based on EU borrowing on the capital markets backed by the EU budget’s headroom;
Change 11
Changed:34. Notes that the evolving geopolitical environment requires even more unity and solidarity among the Member States, especially when taking into account the security concerns of the EU and its Member States; considers that strengthening Europe’s security by reducing strategic dependencies remains essential to safeguarding the Union’s long-term resilience; supports the Commission’s efforts to move towards a more coordinated approach to defence; notes that the Security Action For Europe (SAFE) instrument establishes a loan facility of EUR 150 billion to support Member State investments in defence; regrets the fact, however, that the SAFE instrument was based on Article 122 TFEU, limiting parliamentary oversight; welcomes the fact that the net expenditure indicator excludes all national co-financing of EU-funded programmes, providing increased fiscal space for Member States to invest in the EU’s common priorities, as laid down in Regulation (EU) 2024/126311,2024/1263, thus helping to strengthen synergies between the EU budget and national budgets, thereby reducing fragmentation and increasing the overall efficiency of public spending in some areas, such as defence; stresses that Member States’ commitment to increase defence spending should not come at the expense of other EU common priorities;
7 unchanged paragraphs
35. Notes that 16 Member States have activated the NEC for defence spending; underlines that this provides Member States with flexibility to increase defence expenditure without an immediate need to finance such increases through spending cuts or revenue-raising measures; notes that this flexibility thus gives Member States the necessary time to accommodate higher defence expenditure within national budgets; highlights that the partial participation significantly reduces the projected additional defence expenditure from EUR 650 billion to approximately EUR 297-337 billion;
36. Cautions that defence spending is consumptive investment by nature and does not per se increase an economy’s potential output; considers that defence spending should therefore not be financed through increased debt issuance in the long-term;
37. Stresses the importance of increasing coherence and cooperation in defence investment across Member States, particularly as regards strategic enablers or strategic weapons systems that are too expensive for individual Member States, in the light of the pressing need to scale up the European defence sector and ensure long-term security and strategic autonomy;
38. Recalls that the Commission has never launched an excessive imbalance procedure, despite the fact that some Member States have recurrent imbalances in their current accounts; notes that the Commission will assess the existence of macroeconomic imbalances for the seven Member States selected for in-depth reviews in its 2026 alert mechanism report;
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39. Instructs its President to forward this resolution to the Council and the Commission.