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Broad Economic Policy Guidelines (2008- 2010)

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The potential economic stability and growth of the European Union (EU) should be developed through the implementation of adapted national policies. The Council recommends that Member States align their macroeconomic * and microeconomic * policies taking into account changes in European society and fluctuations in the international situation.

ACT

Council Recommendation 2008/390/EC of 14 May 2008 on the broad economic policy guidelines for the Member States and the Community (2008-2010) [Official Journal L 137 of 27.5.2008].

SUMMARY

The recommendation on the broad economic policy guidelines (BEPG) establishes the framework for coordinating the policies of the European Union (EU) Member States.

Macroeconomic policies for growth and jobs

Compliance with guidelines 1 to 5 will contribute towards:

  • securing economic stability for sustainable growth,by calling on Member States to ensure the development of their public finances in line with the Stability and Growth Pact (SGP) and by ensuring that in the case of current account deficits they implement structural reforms and fiscal policies to encourage the competitiveness of their markets;
  • strengthening sustainable economic and fiscal viability,in the context of Europe’s ageing population. Member States must undertakea satisfactory pace of debt reduction and improve the efficiency of their pension, social protection and health care systems. They should encourage the presence of workers in the labour market for a longer period;
  • improving the effectiveness of public finances, by aligning public expenditure to the growth objectives of the renewed Lisbon Strategy and by taking fiscal measures to encourage jobs and investment;
  • ensuring that wage developments support economic growth and stability, by encouraging the creation of framework conditions for wage-bargaining systems as labour costs should encourage price stability and contribute to productivity;
  • coordinating macroeconomic, structural and employment policies, to increase theadjustment capacity in labour and product markets in the worldwide economy following the principle of flexisecurity.

Guideline 6 recommends that States in the euro area coordinate their economic and fiscal policies better in order to contribute to a dynamic and well-functioning euro area. In particular they should pay attention to fiscal sustainability in compliance with the SGP and accelerate structural reforms aimed at productivity, competitiveness and economic adjustment capacity. The euro area should also increase its influence and competitiveness at the international level.

Microeconomic reforms to raise Europe’s growth potential

In accordance with the Lisbon Strategy, guidelines 7 to 11 highlight the importance of knowledge and innovation as factors for competitiveness, growth and sustainable development. Member States and the Community should pursue an integrated approach to climate and energy policy with the aim of increasing the security of supply and the availability of affordable energy, and combating climate change.

Measures taken by Member States should:

  • increase investmentin research and development, particularly by businesses, with a general aim of 3% of Europe’s GDP being invested by 2010. Public-private partnerships should be developed, as well as centres of excellence of educational institutions and national research institutes and the transfer of technologies between public research institutes and businesses;
  • facilitate innovation in all its forms, through the establishment of support services, recourse to public procurement, access to national and international funds and the protection of intellectual property rights. Local and regional innovation poles should contribute to the technological convergence of European territories;
  • accelerate the dissemination and widespread use of information communication technologies (ICTs), by increasing the deployment, power and interoperability of information networks in particular;
  • strengthen the European industrial base, by adopting an approach which strengthens the ability of the economy to reorient its activities towards sectors with higher productivity;
  • use resources in a sustainable way, and create synergies between production, the environment and growth. This implies that Member States should give priority to energy efficiency and tackling climate change.

The European Union (EU) should become more attractive to foreign investors and workers. Guidelines 12 to 16 make recommendations to:

  • extend and deepen the internal market,byeliminating remaining obstacles to cross-border activity in the EU, including activities related to the single market for services and public procurement;
  • ensure open and competitive markets,as a result of implementing competition policy more effectively, including in the network industries. State aid should be directed towards horizontal objectives such as research, innovation and the optimisation of human capital;
  • improve European and national regulationsin terms of their impact on economic, social and environmental areas and on the competitiveness of businesses. Administrative burdens which weigh heavily on enterprises should be reduced;
  • encourage an entrepreneurial culture and create a supportive environment for SMEs, in particular regarding their creation, transfer of ownership and access to finance;
  • expand, connect and modernise European infrastructures,for better integrated markets. Member States should give priority to transeuropean networks (TENs).
Key terms of the Act
  • Macroeconomic policies: this term encompasses policies believed to influence economic factors on ‘a large scale’ such as price levels, unemployment, growth potential, Gross Domestic Product, etc.
  • Microeconomic policies: this term encompasses policies aimed at directing decisions of an economic nature, for example people or morals.

RELATED ACTS

Council Recommendation 2009/531/EC of 25 June 2009 on the 2009 update of the broad guidelines for the economic policies of the Member States and the Community and on the implementation of Member States’ employment policies [OL L 183 of 15.7.2009].
The Council addresses recommendations to Member States to ensure that they take account of the 2009 update of the integrated guidelines for growth and employment. These recommendations are specific to the situation of each State. They have been drawn up in the context of the slowdown in economic activity and employment growth resulting from the international financial crisis.

Member States are to adapt their national reform programmes and to give an account of those adaptations in their annual reports on the implementation of those programmes.

These recommendations, issued as part of the second cycle (2008 - 2010) of the Lisbon strategy for growth and jobs, are presented in the form of a single instrument. The latter is intended for the revision of the broad guidelines for the economic policies and the employment policy guidelines.

Last updated: 19.11.2009

See also

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