Let me start with the European Semester. Today, we discussed the country reports that the Commission presented at the end of February.
Our main message is that economic growth in Europe continues and our economic policy mix – investment, structural reforms and responsible fiscal policies – is working.
We acknowledged the progress made in correcting macro-economic imbalances. However, progress is uneven across Member States. We still see high levels of both public and private debt, unemployment issues related to competitiveness and low productivity growth in several Member States as well as high levels of non-performing loans in some Member States.
We will have a substantial discussion on this issue at the Informal ECOFIN Council in April. Large stocks of NPLs weigh on European growth. This is why we plan to propose a coordinated approach at EU level. Efforts should also be stepped-up at national level.
Briefly, on the implementation of CSRs: our assessment shows that while there has been tangible progress on a large majority of recommendations since the launch of the European Semester in 2011, year-on-year progress could be better.
There is positive progress in the areas of the financial sector and labour market policy, taxation and transport. The same cannot be said about such areas as long-term sustainability of public finances, competition in services and the business environment, where progress has been, at best, more limited.
Turning to taxation, our proposal to reduce VAT rates for e-books and other e-publications would allow us to keep step with the digital revolution. Many ministers today strongly supported this targeted and simple initiative.
We hope that agreement on this can be reached quickly.
We also discussed the reverse charge mechanism. More work on this is needed, and there are some diverging views on this issue.
On the financial sector, we informed ministers of the public consultation that we launched today on the operation of the European Supervisory Authorities (ESAs).
These European Supervisory Authorities played a key role in ensuring that financial markets across the EU are well regulated, strong and stable.
Six years after the launch of their operations, it is time to take stock. We want to see how the ESAs fulfil their mandate and how we could improve on them, especially how to improve supervisory convergence.
Coordinated and integrated supervision will be increasingly important in future, notably to develop and integrate EU capital markets through the Capital Markets Union.
But it is also important to engage in this reflection process in a timely way. Now is good timing because of the new challenges we are facing.