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European Commission

[Check Against Delivery]

László Andor

Commissioner for Employment, Social Affairs and Inclusion

Speaking points by Commissioner Andor on the Country-Specific recommendations

Press conference

Brussels, 2 June 2014

Ladies and Gentlemen,

Although there are some signs of economic recovery, it remains slow; it is still very fragile; and it is uneven throughout the EU. Unemployment data confirm continuing stagnation in Europe's labour markets. The situation remains dire: unemployment has increased to close to 26 million; there are 5.3 million jobless young people; and around half of the unemployed have been without a job for more than a year.

The economic crisis also has had significant social consequences: today in the EU, nearly a quarter of the population is considered at risk of poverty or social exclusion. Compared to 2008, there are actually 6.6 million more people at risk of poverty or social exclusion.

The European Semester country-specific recommendations are not only about monitoring fiscal policies and competitiveness developments.

Indeed, this year, for the first time under the European Semester, the Commission uses a new employment and social scoreboard to ensure that country-specific recommendations are based on sound analysis and address employment and social concerns more precisely.

One of the biggest challenges we face today deals with the growing divergences in the employment and social situations of Member States within the euro area. The core-periphery gaps keep widening. As a result of the economic crisis, some Member States are witnessing declining household disposable income, rising inequalities, poverty and social exclusion.

Let's start with the main features of the recommendations in the employment field.

First, the 2014 recommendations highlight the need for greater focus on fighting long-term unemployment by stepping up active labour market policies and improving the performance of public employment services. This is crucial to support people back into work and to maintain their employability. Such CSRs are addressed to several Member States, notably Bulgaria, Estonia, Ireland, Greece, Italy, Luxembourg, Spain, Portugal, Slovakia, Finland, Sweden and the UK.

Second, we have seen that, since last year, many Member States have launched important reforms, but segmentation of the labour market persists, with an increasing number of part time and precarious jobs. In order to reduce labour market segmentation, we recommend measures to favour sustainable quality jobs including through reducing the number of contract types – notably in the case of Spain.

Third, a number of countries have taken steps to adapt their wage-setting systems to the economic environment, including France, Italy, Portugal and Spain. We also welcome steps to introduce a general minimum wage in Germany. Wage-setting systems, including minimum wage or wage indexation, have a central and complex role in our economy, both from a macro- and micro-economic perspective. This year's CSRs reflect the complexity and diversity of situations.

In some cases, we call on Member States to monitor the impact of such reforms on employment (Italy and Germany). In other cases, the Commission recommends specific actions to ensure that wage developments are in line with productivity developments, support and employment, and boost domestic demand.

Wages developments and wage bargaining systems (including indexation) are addressed in the cases of Spain, Portugal, Bulgaria, Romania, Slovenia, the Netherlands, Belgium and Luxemburg.

Fourth, increasing participation in the labour market is a challenge in several Member States. Increasing women's participation in the labour market is crucial notably for Austria, Germany and also Ireland, Italy, Malta and Poland. In the case of Germany for example, the Commission recommends – as it did last year - to reduce fiscal disincentives to work and to improve availability of quality and affordable childcare.

Let's now turn to the main features of the recommendations in the social field.

The Commission is proposing recommendations on inequality, poverty and social inclusion for 12 Member States, including Bulgaria, Romania, Hungary, Croatia, Spain, Portugal, Italy, Lithuania, Latvia, Ireland and the UK.

We point to the need to improve adequacy and coverage of social safety nets. We specifically focus is on improving social protection for those not in work, namely unemployment benefits (BG, LT, IT, HU, RO) and social assistance (ES, LT, LV, BG, RO, IT, HU), and on ensuring better transitions between income support and employment (ES, IE, UK). Child poverty is of specific concern in the case of UK and Ireland. We also have proposed specific recommendations to improve the situation of Roma to Bulgaria, the Czech Republic, Hungary, Romania and Slovakia.

Let me comment on our new approach in dealing with youth unemployment in the European Semester.

As you are aware, the Commission has received Youth Guarantee Implementation Plans from all the 28 Member States. The Commission's assessment of these implementation plans is part of the European Semester and is reflected in the Staff Working Documents.

18 Member States are receiving recommendations to improve transitions from school to work.

Structural measures include strengthening capacity of the public employment services, building partnerships to reach out to inactive young people not registered with an employment service, and developing apprenticeship systems. For 8 Member States where youth employment is particularly high and where there are serious implementation problems, more decisive actions are needed and the CSRs refer to the main challenges in delivering a Youth Guarantee for Spain, Italy, Slovakia, Croatia, Portugal, Poland, Bulgaria, and Ireland.

We now look to the Member States to act upon these proposed recommendations without delay. In particular, I am looking forward to a substantive discussion with the Council of Employment and Social Affairs Ministers on 19th June in preparation of their submission to the European Council.

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