EU Semester Spring Package Unveiled by Dombrovskis
If I am to summarise today’s package in two words, they are “competitiveness” and “security”.
Indeed, it brings us back to the basics of the European project: peace and prosperity.
First, with regard to competitiveness.
The European Commission has made improving Europe’s competitiveness a top priority.
The rest of the world will not wait for us.
The time for action is now.
Our Competitiveness Compass plots the course for the next five years to arrive at a more competitive Europe.
It is vital that the EU continues to coordinate its economic and social policies effectively to implement the Competitiveness Compass, bolster our competitiveness and secure our long-term prosperity.
The European Semester is the key mechanism for making this happen.
Correspondingly, this year’s country-specific recommendations call on all Member States to take policy action to promote competitiveness and increase productivity.
They include, for example, recommendations to Member States on:
So, by implementing these recommendations, Member States can play their part in enhancing Europe’s competitiveness all together.
The recommendations on fiscal policy focus on improving the efficiency and quality of public finances, including through a balanced tax mix.
This will help Member States to finance policy priorities.
A short word on the Recovery and Resilience Facility, as it enters its final stage.
With just over a year remaining until the August 2026 deadline, the clock is ticking.
We have therefore made recommendations to certain Member States to step up implementation efforts.
There is no time to waste.
After this press conference, I will present the Communication on the closure of the Recovery and Resilience Facility at a separate press point with Executive Vice-President Fitto.
Moving to the main fiscal elements of the Spring Package.
This also brings us to our second major priority: security.
The ReArm Europe plan/Readiness 2030 initiative is designed to encourage significant and sustained investment in defence, with the potential to mobilise €800 billion in additional spending.
The activation of the national escape clause under the Stability and Growth Pact is a key pillar of this initiative.
So far, 16 Member States have requested its activation.
The flexibility under the national escape clause allows deviations from the recommended maximum growth of net expenditure of up to 1.5% of GDP over the period from 2025 to 2028.
In other words, this will result in a rapid increase in defence spending by allowing these Member States to temporarily deviate from the normal fiscal requirements in the years ahead.
Today, the Commission has positively assessed 15 out of the 16 requests to activate the national escape clause.
Europe has every advantage over the Russian aggressor in terms of economic weight, technology and population.
With today’s positive assessments, we are taking an important step towards making those advantages count by facilitating the investment needed to rebuilding Europe’s defence capabilities.
Allow me now to flag some other important highlights of today’s package.
This Spring Package marks an important milestone in the implementation of the new economic governance framework.
For the first time, the Commission is assessing the implementation of the medium-term plans and compliance with the recommendations under the excessive deficit procedure.
Our assessment is, overall, positive.
12 Member States are compliant with the recommended maximum growth of net expenditure, taking into account, where relevant, the flexibility provided by the national escape clause.
Two Member States – Portugal and Spain – are broadly compliant.
Four Member States – Ireland, Cyprus, Luxembourg, and the Netherlands – are at risk of deviating from the recommended net expenditure path in 2025.
These Member States need to ensure that net expenditure respects the recommended path.
We will closely monitor the evolution of these risks in the coming months.
The Commission will come forward with its final assessment based on outturn data for 2025 next year, as part of the European Semester Spring 2026 Package.
The Commission also prepared a Report under Article 126(3) to assess compliance with the Treaty’s deficit criterion for four Member States – Austria, Finland, Latvia and Spain.
For Austria, the report concludes that the deficit criterion was not complied with.
The next step is for the Economic and Financial Committee to formulate an opinion on this report.
On that basis, the Commission will propose to the Council to open an Excessive Deficit Procedure (EDP) for Austria.
For the other three countries, the report concludes that the deficit criterion was complied with.
Turning to the Member States under an excessive deficit procedure.
The Commission considers that the procedures for Italy, Slovakia, Hungary, Poland, France and Malta can be held in abeyance.
That said, France and Malta should be ready to take further measures in view of projected small slippages.
For Belgium, the Commission has recently recommended a new corrective path following the submission of its medium-term plan.
And Belgium appears compliant with the path it must follow.
Now, I wish to draw your attention to Romania.
Romania is under an excessive deficit for over five years now.
Its deficit reached 9.3% of GDP last year.
Our assessment finds that net expenditure growth is well above the ceiling established by the recommended corrective path.
This obviously presents clear risks to the timely correction of the excessive deficit by 2030 and it also fuels important external imbalances.
Therefore, the Commission is today recommending to the Council to adopt a decision that establishes no effective action has been taken by Romania to correct its excessive deficit.
Romania has been experiencing excessive deficits for too long without taking the necessary corrective action.
So, with today’s recommendation, we are sending a clear signal.
Now is the time for Romania to urgently take decisive action to bring down its deficit and correct its imbalances.
A quick update on the macroeconomic imbalances procedure.
The Commission has assessed the existence of macroeconomic imbalances for the ten Member States selected for in-depth reviews in the 2025 Alert Mechanism Report.
Over the past year, economic developments have eased some macroeconomic imbalances in several Member States.
However, given the high and increasing levels of uncertainty, risks around imbalances have increased.
The most significant development in regarding our assessment of imbalances is our de-escalation of Germany and Cyprus to experiencing ‘no imbalances’.
For Germany, this a clear recognition that progress has been made towards addressing its persistently large current account surplus.
We also welcome that significant policy measures and investments have recently been announced to further address the surplus.
For Cyprus, vulnerabilities related to external and private debt have been receding over a long period of time, including because of solid policy action.
Finally, some very positive news on Bulgaria.
The Commission has published a convergence report which finds that Bulgaria now meets all the criteria to become the 21st member of the euro area.
Today’s report is a historic moment for Bulgaria, the euro area and the European Union as a whole.
It is not the final step, but it is an important one.
On the basis of this positive report, the Council is now expected to take the final decision on Bulgaria’s entry into the euro area in the first half of July.
This would pave the way for the adoption of the euro by Bulgaria at the beginning of 2026.
For Bulgaria, the euro will bring tangible benefits for citizens and businesses: lower transaction costs, protected savings, more investment, and increased trade, and lower interest rates.
A larger euro area means more stability and greater international heft for the euro.
It also underlines the strength of the euro globally.
Of course we know that the euro is more than a currency.
It is a tangible symbol of European unity and of the peace and prosperity that our European project continues to deliver right across our continent.
Following on from Bulgaria becoming a full member of the Schengen area earlier this year, it brings Bulgaria ever closer to the heart of Europe.
I look forward to travelling to Sofia to meet the government and Bulgarian authorities on the next steps for Bulgaria’s accession to the euro area.
To conclude, the overall theme of this year’s package is competitiveness, with a strong emphasis on resilience and security, in light of the turbulent world in which we currently live.
In this uncertain geopolitical environment, if you are looking for a bastion of stability, a place where the rules-based order is upheld – that place is Europe.
I will stop here. Thank you very much.
https://ec.europa.eu/commission/presscorner/detail/en/statement_25_1415