Economic
and Monetary Affairs Committee (ECON) held an Economic Dialogue with
Commissioners Valdis Dombrovskis and Paolo Gentiloni. MEPs inquired
about several issues that dominated their last such meeting, such as the
deactivation of the General Escape Clause (GEC) in 2023 amid persisting
inequalities in the EU. They also put forward proposals for a stronger
alignment between the Recovery and Resilience Facility and National Plans and the European Semester and Country Specific Recommendations.
The GEC allowed member states to deal
with the consequences of the COVID-19 crisis, as they were able to
depart from normal budgetary requirements. ECON MEPs insisted again that
the GEC deactivation might be premature amid the economic impact of the
Omicron variant alongside rising inflation and energy prices, supply
bottlenecks and international tensions. Numerous MEPs highlighted the
issue of persistent wealth disparities in the EU, including rising house
prices excluding young people from the property market.
While Vice-President Dombrovskis
reiterated that the EU economy has already recovered to pre-crisis
levels, presenting record low unemployment as evidence, he also reminded
MEPs that the GEC decision is data-based and can be altered in case of a
major economic shock. The commissioners also assured MEPs the
Commission would share fiscal guidance on how to apply fiscal rules in
2023. The Commission will also work with member states on reducing their
post-crisis debts in a way that does not hamper their growth.
MEPs proposed combining the European
Semester with the RRF, while avoiding any overlaps and administrative
burden on member states. They suggested that the higher ownership of the
RRF and the readiness to implement reforms result not only from the
implementation-based financing but also from the bigger involvement of
member states in designing their national recovery plans according to
their own investment and reform needs.
The Commissioners admitted that there
are lessons that have been learned from the RRF that could be applied to
the European Semester process, but they assured that the discussions
are ongoing. They also said that the interlinkage between the RRF and
the Semester will be a part of the economic governance framework review,
for which the Commission will present a proposal in the coming months.