On European Semester for economic policy coordination 2026
A-10-2026-0036
Committee on Economic and Monetary Affairs · Rapporteur: Kira Marie Peter-Hansen
- Voted on · Adopted 392–219–18 · See the decision →
- Full procedure 2025/2214
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This resolution on the European Semester for economic policy coordination 2026 notes the EU's economic outlook, investment needs, and the application of the reformed economic governance framework. It calls for prudent fiscal policies, completion of recovery plans, and a strategy to meet investment needs beyond 2026.¶¶¶ It stresses the need for more targeted country-specific recommendations, better implementation, and greater democratic scrutiny, while supporting new own resources and EU-level instruments to finance common priorities.¶¶¶
Committee position. The Committee on Economic and Monetary Affairs proposes a resolution that notes economic challenges, calls for prudent fiscal policies, and urges action on investment, CSRs, and defence spending.¶¶¶
Key points
- Notes that EU GDP is expected to increase by 1.4% in 2025 and 2026, and that potential growth is set to decline from 1.5% in 2024 to 1.3% in 2027 in the EU.¶¶
- Notes that the aggregate euro area deficit is projected to rise from 3.1% of GDP in 2024 to 3.2% in 2025 and 3.3% in 2026, and that 12 Member States are set to have deficits exceeding 3% of GDP in 2027.¶¶
- Calls on Member States to pursue prudent fiscal policies to safeguard public debt sustainability.¶
- Highlights that insufficient investment hinders growth and competitiveness; stresses the need to remove barriers and mobilise private investment, and insists on the crucial role of the next multiannual financial framework.¶
- Recalls that the purpose of the reformed economic governance framework is to be simpler, more transparent and effective, and stresses the need for even application of fiscal rules.¶¶
- Urges Member States to complete implementation of their recovery and resilience plans by August 2026, and notes that RRF debt is to be repaid by 2058.¶
- Calls for reducing tax gaps by improving tax compliance and combating tax avoidance and evasion.¶
- Notes the lack of progress in implementing country-specific recommendations; between 2019 and 2023, 25.1% showed no or limited progress; calls for fewer and more targeted CSRs.¶
- Calls on the Commission to clarify procedures and selection criteria for CSRs and to improve information flow to Parliament.¶
- Calls for a strategy to meet investment needs beyond 2026, and for new own resources to finance EU policies; supports the European Competitiveness Fund and Scaleup Europe Fund.¶¶
- Notes that 16 Member States have activated the national escape clause for defence spending, reducing projected additional defence expenditure from EUR 650 billion to approximately EUR 297-337 billion.¶
- Cautions that defence spending is consumptive and should not be financed through increased debt issuance in the long term.¶
Who is affected
- Member States: called on to pursue prudent fiscal policies, complete recovery plans by August 2026, and improve tax compliance.¶¶¶
- Commission: asked to clarify CSR methodology, ensure even application of fiscal rules, and present a strategy for investment needs.¶¶¶
- Independent fiscal institutions: encouraged to participate more in preparing medium-term fiscal-structural plans.¶
Figures and deadlines
- 1.4% GDP growth in 2025 and 2026¶
- Potential growth decline from 1.5% in 2024 to 1.3% in 2027¶
- Euro area deficit projected at 3.2% of GDP in 2025 and 3.3% in 2026¶
- 12 Member States with deficits exceeding 3% of GDP in 2027¶
- 25.1% of CSRs showed no or limited progress between 2019 and 2023¶
- EUR 650 billion projected additional defence expenditure, reduced to approximately EUR 297-337 billion¶
Legal basis: Articles 121, 126 and 136 of the Treaty on the Functioning of the European Union¶