According to the EU Commission’s spring economic forecast, the European economy defied the difficult global situation, albeit with modest success. The growth outlook for 2023 and 2024 was revised upwards to 1.0% and 1.7%, respectively. Difficult financing conditions and high core inflation are likely to have a negative impact. As part of the 2023 European Semester Spring Package, the Commission is presenting guidelines to support Member States in creating a robust and sustainable economy. In doing so, the EU Commission advises to adopt a comprehensive approach encompassing all policy areas, that promotes environmental sustainability, productivity, equity and macroeconomic stability.

EU Commission’s general recommendations for Member States
According to EU Commissioner for Economic Affairs Paolo Gentiloni, priority should be given to the implementation of national Recovery and Resilience Plans because they are “our most powerful tool to achieve lasting and shared prosperity”.  In this context, more than €152 billion have already been disbursed by the EU Commission for the implementation of “key reforms and investments”. With energy prices stabilised, Member States are to phase out their energy price shock measures by the end of this year, with the savings being used for debt reduction, the Commission said.

For the first time since the activation of the general escape clause, there are again quantified recommendations for fiscal policy, according to Executive Vice-President Valdis Dombrovskis: nationally financed public investment should be maintained and those Member States that have not reached their medium-term budgetary objective should pursue prudent fiscal policies. According to Nicolas Schmit, EU Social Affairs Commissioner, in order to enable smooth transitions into a greener and more digital economy and support quality job creation, “strong and targeted employment and social policies that work hand in hand with industrial, economic and fiscal policies” are needed. EU Commissioner for Economic Affairs Paolo Gentiloni also pointed to the particular need for further implementation of the European Pillar of Social Rights. 

As much as the social goals in the spring package are to be welcomed from the workers' perspective, a new austerity policy course is not off the table. Overall, the distribution situation remains worrying, and whether no one will really be left behind in the course of the green and digital transition is anything but certain. It is also questionable whether there is enough room to actually make the urgently needed investments in the future.

Recommendations for Austria from AK’s point of view
The country specific recommendations for Austria are more positive than negative, but there is still some need for improvement, which should be addressed and implemented in the course of the current negotiations.

The first recommendation of the Commission aims to reduce the current energy policy relief measures by the end of 2023, which is premature from the point of view of the AK in view of the continuing high risks in the energy sector. However, the planned extension of further relief measures for companies (see "Stromkosten-Ausgleichsgesetz") should be refrained from. And in the case of future new relief measures, it must also be ensured that these effectively reduce inflation and that the energy supply companies contribute significantly to their financing.

The recommendation to promote public investments in green and digital transformation and to improve the tax mix in favour of inclusive and sustainable growth is seen as positive. In this regard, from AK's point of view, a focus should also be set on adequate wealth-related taxation. The "financial sustainability" of the health and long-term care system continues to be an issue - AK additionally demands a clear focus on improving the working conditions in the sector. AK particularly welcomes the recommendation to boost women's participation in the labour market, including by improving childcare services. The recommendation to increase the participation of disadvantaged groups, such as low-skilled job seekers and people with a migrant background, with the help of training measures, is also very positive. However, companies should in this context be encouraged to invest more into the education and training of their employees. Likewise, a legal entitlement to further training measures should be granted to employees. Furthermore, there is no recommendation to improve the education system in general. And there is a fundamental lack of understanding that the federal government must do more to make the social system poverty-proof. In contrast, the recommendations to continue the reduction of dependence on fossil fuels, to accelerate the expansion of renewable energies, to increase energy efficiency and to reduce emissions, especially in the transport sector, are to be supported.

Further Information:
AK EUROPA: Promoting investment in the future and social balance? New proposal for EU fiscal rules unconvincing
EU Commission: Press release on policy guidance under the European Semester
EU Commission: Spring 2023 Economic Forecast
EU Commission: Country Specific Recommendations for Austria
EU Commission: Questions and answers on the 2023 European Semester Spring Package