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Questions and answers on the 2025 European Semester Spring Package
What is included in this year's European Semester Spring Package?
The 2025 European Semester Spring Package includes:
- a communication on the main elements of the European Semester Spring Package
- country reports identifying Member States' main economic, employment and social challenges affecting competitiveness and prosperity;
- country-specific recommendations for policy actions to tackle reform and investment needs;
- a report examining the reasons for exceeding the 3% of GDP deficit reference value for 4 Member States
- proposals for Council recommendations on the activation of the national escape clause for 15 Member States, amid rising security challenges;
- Commission Opinion on the Draft Budgetary Plan of Belgium;
- a proposal for a Council recommendation on the medium-term plan for Lithuania;
- reports on post-programme surveillance for five Member States (Greece, Spain, Portugal, Cyprus and Ireland);
- a proposal for a renewal of the guidelines for the employment policies of the Member States.
What are the key priorities for the European Semester in 2025?
In the face of the current geopolitical reality and complex economic and social challenges, the EU seeks to build a robust and future-proof economy that secures competitiveness and long-term prosperity for all Europeans. This requires an integrated approach across all policy areas. The European Semester provides the policy coordination framework for that purpose, also embedding the implementation of NextGenerationEU, with the Recovery and Resilience Facility (RRF) at its core, and of the Cohesion Policy programmes. While implementation of national recovery and resilience plans (RRPs) is underway, risks of delays need to be addressed. In parallel, the Commission publishes today a Communication on the RRF towards 2026, to give guidance to Member States on a smooth and successful closure of the RRF instrument. Member States should continue to focus on the full and timely implementation of the national plans until 2026 and Cohesion Policy programmes.
Policies to strengthen competitiveness are key to give the EU economy a boost and receive further reinforced attention in this year's Semester cycle. The Competitiveness Compass for the EU sets out the priorities and actions guiding the work of the Commission over the next five years, establishing competitiveness as an overarching objective. It provides a framework to boost competitiveness by closing the innovation gap, decarbonising our economy, reducing excessive dependencies and increasing security, including by building up defence capabilities. These objectives are supported by five horizontal enablers, widely covered in the 2025 Country-Specific Recommendations: cutting red tape, removing barriers in the single market, enabling more efficient financing, promoting skills and quality jobs while ensuring social fairness, and ensuring better coordination at EU level.
What is the link between the European Semester Spring Package and the new Economic Governance Framework?
The new fiscal surveillance process is embedded in the European Semester, which remains the central framework for economic and employment policy coordination. This Spring Package marks the conclusion of the first complete annual cycle of macroeconomic surveillance under the reformed economic governance framework, which entered into force in April last year.
Following the submission of the first medium-term plans by Member States last autumn, today's package takes stock of the progress made in their implementation. For its assessment of compliance, the Commission compares the projected net expenditure growth with the ceilings recommended by the Council or set out in the medium-term plans, when the Council recommendation is not yet available. The Commission's assessment is underpinned by outturn data for 2024, the Spring 2025 Forecast and the Annual Progress Reports submitted by Member States at the end of April.
In exchange for a more gradual fiscal adjustment path, some Member States committed to implementing reforms and investments that comply with specific criteria, such as addressing country-specific recommendations and targeting the achievement of specific EU policy priorities, including the European Pillar of Social Rights, and a fair green and digital transition. For those Member States, the assessment also considers the state of play of implementation of these investments and reforms.
The proposed country-specific recommendations reflect the Commission's assessment of compliance with the new fiscal framework. They call on Member States in compliance to adhere to the maximum growth rates of net expenditure recommended by the Council or, when there is a risk of deviation, to ensure that these are respected. The Commission proposes to use the flexibility provided under the national escape clause to accommodate higher defence expenditure for Member States that have requested its activation.
The European Semester remains the key channel for the Commission and the Council to monitor Member States' economic and fiscal policies.
How is the Commission assessing the fiscal performance in 2025?
For its assessment of compliance, the Commission compares the projected net expenditure growth with the ceilings recommended by the Council or set out in the medium-term plans, when the Council recommendation is not yet available. The Commission's assessment is underpinned by outturn data for 2024, the Spring 2025 Forecast and the Annual Progress Reports submitted by Member States at the end of April. For Member States under the excessive deficit procedure, the Commission undertakes an assessment of effective action to correct their excessive deficits.
The assessment of the Commission already considers the flexibility under the national escape clause, pending its activation by the Council, which allows deviations from the recommended maximum growth of net expenditure of up to 1.5% of GDP over the period 2025 to 2028, for increased defence expenditures based on 2021 as reference year.
For 22 Member States, the Commission has assessed compliance of projected net expenditure growth in 2025 (and 2024 and 2025 taken together) vis-à-vis the maximum net expenditure growth recommended by the Council.
For Belgium, Bulgaria and Lithuania, the assessment is based on the net expenditure path put forward in their medium-term plans, which the Commission has found to be in line with the rules. For Austria, the assessment is based on its plan, which is still under review by the Commission. For Germany, a full assessment cannot be undertaken for the time being, in the absence of a medium-term plan. The Commission expects Germany to submit its plan by end-July 2025
Is the Commission proposing to open new deficit-based excessive deficit procedures?
The Commission prepared a Report under Article 126(3) of the Treaty on the Functioning of the EU (TFEU) to assess compliance with the Treaty's deficit criterion for four Member States: Austria, Finland, Latvia and Spain. In light of the assessment contained in the report, opening of a deficit-based excessive deficit procedure is warranted for Austria. After considering the opinion of the Economic and Financial Committee, the Commission intends to propose to the Council to open deficit-based excessive deficit procedures for Austria and propose to the Council recommendations to put an end to the excessive deficit situation.
How does the Commission assess the recent evolution of macroeconomic imbalances?
Economic developments have helped ease some imbalances in several Member States. However, uncertainty has augmented significantly, compounding risks around imbalances. The main conclusions of the in-depth reviews are as follows:
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- While inflation has passed its peak, inflation differentials remain sizeable in several cases, potentially leading to competitiveness losses and affecting the effectiveness of the monetary stance, especially within the monetary union.
- Some large current account deficits and surpluses persist, reflecting different domestic demand dynamics. The largest external debts have continued to decline.
- House prices gained dynamism over the course of 2024 and are expected to keep rising driven by long-standing structural effects, including bottlenecks to housing supply.
- Large debt ratios for households and non-financial corporations continued to fall but at a lower pace, with weaker denominator effects due to lower inflation. Borrowing has edged up. Government debts have generally declined, with the exception of a few Member States.
- The banking sector has become even stronger.
What are the main themes in the country-specific recommendations addressed to Member States?
As every year, the fiscal country-specific recommendations set out the Commission's guidance on the fiscal policies Member States are expected to pursue.
As was the case last year, Member States have also received a recommendation on the implementation of their Recovery and Resilience Plans (RRPs), urging the Member States to ensure or accelerate its implementation. The recommendations also invite Member States to ensure the implementation of Cohesion Policy funds.
This year, the country-specific recommendations also include a focus on the pillars and horizontal enablers of the Competitiveness Compass. This aims to support increased productivity and strengthen the EU's long-term competitiveness by providing a framework to close the innovation gap, decarbonise the economy and strengthen social and economic resilience. In addition, they urge Member States to increase R&D investment, facilitate both private and public financing, enhance the effectiveness of innovation support, improve access to finance, simplify administrative and regulatory procedures, tackle skills shortages, and modernise infrastructure and social systems to respond to growing global challenges and drive sustainable growth.
What is the link between the European Semester Spring Package and the implementation of the Recovery and Resilience Facility (RRF)?
Among other EU budget instruments, the Recovery and Resilience Facility (RRF) continues to promote EU's common objectives through national investments and reforms. With over EUR 300 billion disbursed, the RRF supports the implementation of country-specific recommendations and drives structural reforms in key policy areas for competitiveness.
The European Semester Spring Package plays a crucial role in monitoring the implementation of the RRF, as it provides an assessment of the progress made by Member States in implementing their Recovery and Resilience Plans (RRPs). This will help ensure that Member States are on track to meet their commitments and achieve the objectives of the RRF.
As the RRF is coming to an end in 2026, the 2025 European Semester cycle moves to a consolidated set of country-specific recommendations (CSRs), phasing out the approach introduced during the earlier phases of RRF implementation. The 2025 Semester provides guidance on reform and investment priorities in each Member State based on a broadening analysis to identify the relevant structural challenges. This will help to ensure a smooth transition and support the continued implementation of reforms and investments that are crucial for the EU's long-term competitiveness and economic growth.
What is included in the proposal on guidelines for employment policies?
The proposed Employment Guidelines present common priorities for national employment policies and provide the legal basis for Country-Specific Recommendations in the employment and social areas.
The Commission proposes to carry over the current Employment Guidelines adopted in December 2024, as they had already been updated to reflect the need to tackle to skills and labour shortages.
The recitals of the Guidelines were updated to reflect changes in the geopolitical context including current trade policy tensions and the need to increase defence spending. The updated recitals also refer to recent initiatives aimed at increasing competitiveness, skills levels and productivity in the Union, such as Union of Skills and the Competitiveness Compass. In addition, references to preparing for the green and digital transition, the challenge of energy and the second Commission in-depth assessment of risks and challenges to upward social convergence have been integrated.
Which Member States have requested activation of the National Escape Clause (NEC) so far? Can this initiative be considered a success?
To date, 16 Member States that have requested the activation of the national escape clause. These are Belgium, Bulgaria, Czechia, Denmark, Germany, Estonia, Greece, Croatia, Latvia, Lithuania, Hungary, Poland, Portugal, Slovenia, Slovakia, and Finland. This is a critical number of countries, showing the benefit of following a coordinated approach.
At the same time, Member States can still submit their requests for the activation of the national escape clause.
Given the requests received so far for the activation of the NEC, does the Commission have an updated estimate of the total amounts expected to be mobilised through it?
It is at the current juncture too early to draw definitive conclusions on the scope of the additional defence spending that will materialise in this context.
What are the next steps in the European Semester process?
The Commission invites the Eurogroup and Council to discuss the 2025 European Semester Spring Package and endorse the policy guidance presented today. The Commission looks forward to engaging in a constructive and open dialogue with the European Parliament on this package's content and on each subsequent step of the European Semester cycle, alongside continued engagement with social partners and stakeholders. More details can be found on European Semester website.
The Commission also calls on all EU Member States to implement the recommendations fully and in a timely and effective manner, in close dialogue with their social partners, civil society organisations and other stakeholders.
For more information
Press release on the 2025 European Semester Spring Package
2025 European Semester Autumn package – Documents