Today, the Commission unveils the second part of the European Semester Autumn Package. The first part, presented on 26 November, marked the first launch of the implementation cycle under the new economic governance framework. This second instalment builds upon the first and includes the following: the Commission's proposal for a recommendation on the economic policy of the euro area for 2025, the 2025 Alert Mechanism Report, and the Commission's proposal for the 2025 Joint Employment Report.
The European Semester will continue to identify socio-economic challenges and provide guidance on the policy action needed to address them. For this purpose, the 2025 European Semester cycle will improve its analytical basis and strengthen the dialogue with Member States and other stakeholders on concrete policy actions. Based on this, the European Semester Spring Package will provide country-specific recommendations (CSRs) to tackle main country-specific challenges identified in the Country Reports.
Proposal for a recommendation on the euro area economic policy for 2025
The euro area recommendation presents policy advice to euro area Member States on issues that affect the functioning of the euro area as a whole.
This year's euro area recommendation calls on Member States to act both individually, including through the implementation of their Recovery and Resilience Plans, and collectively within the Eurogroup to improve competitiveness, to foster economic resilience and to continue ensuring macroeconomic and financial stability.
In particular, the recommendation calls to:
- Strengthen innovation, including in critical technologies.
- Improve the business environment, reinforcing access to funding and reducing administrative burden and regulatory complexity.
- Support public and private investment in areas of common priorities, such as the green and digital transitions and the build-up of defence capabilities.
- Promote upskilling and reskilling of the workforce, while further increasing labour market participation.
- Ensure compliance with the new fiscal framework, improve debt sustainability and monitor risks to macro-financial stability.
Alert Mechanism Report
The Alert Mechanism Report (AMR) serves as a screening tool to identify potential macroeconomic imbalances that could impact the economy of individual Member States or the EU as a whole. It marks the start of the annual cycle of the macroeconomic imbalance procedure, highlighting which Member States require in-depth reviews to determine whether they are experiencing imbalances.
In 2025, in-depth reviews will be prepared for the nine countries that were identified as experiencing imbalances or excessive imbalances in 2024: Cyprus, Germany, Greece, Italy, Hungary, the Netherlands, Romania, Slovakia and Sweden.
This year's AMR concludes that an additional in-depth review is warranted for Estonia due to specific risks of newly emerging imbalances. The country continues to face accumulating cost competitiveness losses driven by strong cost pressures, a worsening current account, and rising house prices and household borrowing.
Proposal for a Joint Employment Report
The proposal for a Joint Employment Report (JER) confirms that the EU labour market remains remarkably resilient. The EU employment rate reached a record high of 75.3% in 2023 and rose further to 75.8% in the second quarter of 2024. At the same time, the unemployment rate decreased to a historic low of 6.1% in 2023, a trend that continued in 2024. Labour productivity continued to decelerate in 2023, after slowing significantly between 2010 and 2019. This could harm the EU's ability to compete globally and sustain economic growth, job creation and improvements in living standards.
Real wages began to recover in the second half of 2023, as inflation pressures eased. However, these gains have not yet fully restored the purchasing power lost in previous years. Adequate minimum wages remain essential to protect low-wage earners and reduce in-work poverty, boosting demand and strengthening incentives to work. Widespread labour and skills shortages remain bottlenecks for productivity gains, innovation and competitiveness. In March 2024, the Commission presented an Action Plan to tackle labour and skills shortages, building on existing initiatives and setting out new actions to be implemented by the EU, Member States and social partners.
The 2025 Joint Employment Report maintains a strong country-specific focus on employment, skills and social aspects based on the principles of the Social Convergence Framework, as foreseen in the new economic governance framework . The report also monitors progress towards the 2030 targets set out in the European Pillar of Social Rights Action Plan . The EU is well on track to achieve its headline employment rate target of 78% by 2030. However, significant progress is still needed to ensure that 60% of adults participate in learning every year, and to reduce by at least 15 million the number of people at risk of poverty or social exclusion.
Next steps
The European Commission invites the Eurogroup and Council to discuss the second part of the Autumn Package and to endorse the guidance offered today. It looks forward to engaging in a constructive dialogue with the European Parliament on the contents of this package and each subsequent step in the European Semester cycle, as well as further engagement with social partners and stakeholders.
Background
The European Semester provides a well-established framework for coordinating economic and employment policies of the Member States. Since its introduction in 2011, it has become a well-established forum for discussing EU countries' fiscal, economic and employment policy challenges under a common annual timeline.
