Now that Europe is caught up in the second wave of the pandemic, we are again facing a very deep socio-economic impact.
It is a difficult time for everyone. All EU countries are affected by the crisis, some more than others. But we are all in the same boat.
Our economic outlook remains very uncertain. It is now clear that Europe's economic recovery will take longer than we initially expected.
All of us -- will have to endure a renewed period of restrictive measures.
Today's Autumn Semester Package builds on our earlier work to support each other in weathering this storm and to guide all EU economies into calmer waters.
Collectively - and looking out for one another. This is important, because our economies are tightly linked - especially in the euro area.
As each EU country manages the downturn and its local impact, the effects are also felt on the other side of national borders. So it is all the more important to coordinate our economic and fiscal policies to avoid a further widening of divergences.
Today's package provides a set of recommendations for economic and social policies of euro area Member States.
Given the situation, our recommendations focus on immediate priorities: addressing the health crisis, supporting the euro area recovery and strengthening the resilience of our economies and societies, while facilitating the green and digital transitions.
In this context, national economic and fiscal policies must remain supportive in 2021. It is important to make sure that policy support is not withdrawn prematurely.
However, we need to look beyond the short term as well.
Due to these extraordinary circumstances, debt levels will inevitably rise: for companies, for households but also for governments.
So Member States should take supportive measures that are targeted, temporary and , do not permanently burden public finances.
Because that would only make it harder for those countries to return to prudent fiscal positions, when economic and health conditions allow.
Overall, we found that that Members States' Budgetary Plans are in line with the Council's fiscal policy recommendations from July: supporting economic activity against a background of considerable uncertainty.
In some cases, we also point out measures that are not temporary or matched by offsetting measures. This concerns France Italy, Lithuania and Slovakia. For France and Italy, given the high level of their government debt and high sustainability challenges, it is particularly important to ensure that, when taking supportive measures, fiscal sustainability is preserved.
Paolo will say more on this shortly.
A second policy priority for the euro area is to improve convergence, resilience and inclusive growth. This will require reforms to strengthen productivity and employment, as well as investments to facilitate green and digital transitions.
Our labour market and social policies will play an important role in this respect as well: for instance, we will need to improve labour market integration and job transitions.
Nicolas will tell you more on this.
A third priority is to maintain bank credit flowing to the economy while keeping healthy bank balance sheets. And finally, we need to work further on completing the Banking Union and Capital Markets Union.
Now, turning to the European Union as a whole:
Today, we also decided for which Member States the Commission should - take an in-depth look at possible macroeconomic imbalances.
Imbalances have been declining in recent years in light of the favourable economic conditions. But the pandemic and the consequent downturn has halted this process and we see new risks emerging.
Debts accrued by governments, businesses and, to a lesser extent, by households are rising again and this is against the backdrop of an uncertain economic outlook. This may have implications for bank balance sheets.
All in all, the crisis appears to be accentuating existing patterns of economic divergences and indebtedness.
So, next Spring, we will prepare in-depth reviews for the nine Member States already identified with imbalances - Croatia, France, Germany, Ireland, the Netherlands, Portugal, Romania, Spain and Sweden - and for three that already have excessive imbalances: Cyprus, Greece and Italy.
Two further points:
First, good news for Greece. Our 8th enhanced surveillance report finds that Greece has taken the necessary action to achieve its specific commitments towards the Eurogroup, despite the challenging circumstances.
This can be the basis for the possible release of €767 million of debt relief measures by the Eurogroup.
Second, Romania, which is the only Member State under the excessive deficit procedure. Due to the impact of the crisis and due to the absence of corrective measures, Romania's deficit is set to rise above 10% of GDP this year and increase further in the coming years.
Romanian authorities need to consider substantial further structural actions to set the deficit on a declining path and prevent a steep increase of the debt-to-GDP ratio.
Coming back to the overall package:
Today's Semester Package shows that we have taken the right approach to this crisis by coordinating our policy response: monetary, fiscal and social, accompanied by supervisory and regulatory policies for the financial sector.
This has been instrumental in cushioning the impact of the crisis and making sure that we are able to bounce back from it.
Now that the outlook has deteriorated, Member States should make full use of the emergency instruments available: there is still €9 billion from SURE, €200 billion from the European Investment Bank and €240 billion from the European Stability Mechanism.
And we now need to finalise discussions on the Recovery and Resilience Facility. This will be a key source of support to all EU economies when its funding begins to flow.
It is vital to get these RRF funds flowing quickly to where they are needed, so that countries can move ahead with targeted reforms and investments in line with the relevant country-specific recommendations. The RRF will provide them with a solid financial boost without adding to public debt.
Discussions have already started with Member States on their own Recovery and Resilience Plans. There has been a good progress for a large number of countries.
But we also need the other pieces of this recovery jigsaw to fall into place. We need a quick agreement on all elements of the EU's €1.82 trillion recovery package to support the real economy. People and businesses are waiting. All sides should take their responsibilities to make sure that we will get the full recovery package done.
We need to get it signed, sealed and delivered.
Thank you and now over to you, Paolo.