European Semester: State of Play and what is new Meeting of the ESF Committee 9 February 2017 Ana Xavier Employment and social aspects of the European Semester DG Employment, Social Affairs and Inclusion

Economic surveillance cycle November Annual Growth Survey Joint Employment Report Winter forecast February Autumn forecast Alert Mechanism Report Euro area recommendations Fiscal stance communication Assessment of draft budgetary plans Country Reports October April Stability/Convergence Programmes National Reform Programmes Euro Area Member States: Draft Budgetary Plans Country-Specific Recommendations Spring forecast May

2017 Autumn Package Working for a stronger and more inclusive economic recovery 1) Annual Growth Survey 2017 2) Draft Joint Employment Report 2017 3) Alert Mechanism Report 2017 4) Fiscal Stance Communication 5) Euro Area Recommendation 2017

European Semester: what is new Stronger focus on employment and social dimension: Increased ownership with consultation of authorities and stronger involvement of social partners Recognition of multiannual dimension of reform implementation Better integrating the euro area and national dimension

1) Annual Growth Survey

2017 Annual Growth Survey …virtuous triangle of economic policy… focus on social fairness to deliver more inclusive growth

2017 Annual Growth Survey Positive developments but recovery still modest and uneven Monetary, fiscal and structural to strengthen job creation, growth, investment and financial stability On Investment: remove barriers to investment, better access to finance, more projects to benefit from Investment Plan Includes focus on "human capital and social investment" On Responsible fiscal policies: support on-going recovery, more efforts towards a positive fiscal stance for the Euro area.

On structural reforms: Employment and social priorities Investment Human capital Youth and jobseekers Social infrastructure, including childcare Job creation Equal opportunities Balance between flexibility and security Wage setting systems that react to productivity Effective social dialogue Enhancing skills Focus on labour market relevance of skills Modernise education and training systems New Skills Agenda for Europe Social policy as productive factor Labour market participation and employment security Adequate income support and quality social services Pension and health reforms

2) Draft Joint Employment Report

JER - Key messages Labour market and social situation improving 8 million new jobs since 2013 Employment rate reached 71.1% EU unemployment rate down to 8.5% - 10% in euro area (now below 10% also in the euro area Risk-of poverty or social exclusion decreasing but high Absolute poverty (SMD) down: 9.1 million people less than 2012 peak Promoting job creation remains a priority 4 million unemployed youth and 10 million LTU Tax wedge on labour high (low-earners and second earners) Align wage developments to productivity (explicitly including also upward adjustments)

Employment and poverty trends Employment levels for EU and Euro area (20-64) At-risk-of-poverty and social exclusion rate in the EU

JER - Key messages (cntd) Important reform progress Reforms supporting resilient and inclusive labour markets must continue Better balance flexibility and security Implement YG and YEI Enhance PES and coordination between agencies Stimulate labour market participation notably for women, persons with disabilities, low-skilled Reduce tax wedge notably of low- and second-earners 5 novembre 2014 Name, surname – EMPL C1

JER - Key messages (cntd) Social protection systems must be modernised 119 million people at risk of poverty and social exclusion – including children (25 million) High inequality levels: challenge to growth and social fairness Improve coverage and adequacy of benefits while promoting activation Improve cost-effectiveness Investing in labour supply and skills essential For both youth and adults Align with labour market needs Addressing inequalities in access

JER - Key messages (cntd) Effective social dialogue is key Ensuring fair and efficient reforms Involvement of Social Partners uneven Inflow of refugees: an integration challenge Early intervention, skills assessment and recognition, Followed by language skills, education and training Comprehensive integration into the labour market and society – take medium to long-term perspective 5 novembre 2014 Name, surname – EMPL C1

3) Alert Mechanism Report, communication on fiscal stance & Euro Area recommendation

Alert Mechanism Report (AMR) 2017 Correction of macroeconomic imbalances continues Increased emphasis on the Euro area dimension External deficits and debt levels doing down; Private debt reducing but slow and uneven pace Large current account surpluses remain in some countries Challenges in the banking sector persist Positive labour market developments, but social distress persists in some countries 13 Member States subject to an In-Depth Review Down from 19 and no new countries identified

4) Communication on Fiscal Stance

Communication on Fiscal Stance Towards a positive fiscal stance for the Euro Area Fiscal expansion in 2017 of up to 0.5% of GDP at the level of the euro area First time ever an Euro area fiscal direction To support reforms and strengthen the recovery. As overall expansionary direction but also in the composition of the fiscal adjustment. Different national efforts, depending on fiscal space of the Member State Objective remains long term fiscal sustainability and macroeconomic stabilisation.

5) Euro area recommendations

Euro area recommendations Recommendation in five parts for the euro area as a whole: Policies to support growth and investment and remove bottlenecks to investment and job creation Positive fiscal stance Job creation, social fairness and convergence; reduce labour taxation Agree on European Deposit Insurance Scheme, start work on the common backstop for the Single Resolution Fund; address risks to viability of banking sector; promote deleveraging of private debt. Accelerate completion of EMU, including remaining actions under stage 1 of Five Presidents' Report

Next Steps Winter Package - February: publication of 2017 Country Reports and chapeau communication Spring Package - May: Country-Specific Recommendations issued and chapeau communication

2016 CSRs per policy area in numbers

Thank you for your attention!