The European Commission has released its annual policy recommendations for the 28 member states.
Here are the highlights for the biggest economies on the continent.
- Reduce state spending, currently the highest in the EU at 56 percent of GDP.
- Simplify the tax code.
- Harmonize different pension schemes. (Something President Emmanuel Macron has said he will do.)
- Reduce labor costs for employers to encourage the use of open-ended, full-time contracts.
- Improve labor force participation of workers with a migrant background by providing language training, job counseling and recruitment support and by taking firmer action on discrimination.
- Apprenticeships can help close the skill mismatch between graduates and companies.
- Take (more) steps to boost domestic demand rather than rely on export-driven growth.
- Public investment has increased, but remains modest.
- Shift the tax burden from income to consumption, inheritance and property.
- Expand high-speed Internet access to small towns and rural areas.
- Make it more attractive for women to work.
- Use windfalls to reduce debt, at 130 percent of GDP one of the highest in the world.
- Shift taxes away from capital and labor and toward consumption and property.
- Simplify the tax code. (The incoming Five Star-League government wants to reduce business and income tax rates to two, although that would mainly benefit high incomes and do little to improve tax compliance.)
- Reduce pension spending. At 15 percent of GDP, Italy has one of the highest rates in the EU. (The Five Stars and League want to reverse pension reforms.)
- Encourage higher public- and private-sector investment.
- Step up job training and requalification services.
- Reduce regional disparities in education.
- Improve the efficiency of the justice system, which would both improve the business climate and tackle corruption.
- Clamp down on international tax evasion.
- The share of self-employed workers is rising and they are often underinsured against disability, unemployment and old age.
- Provide more affordable housing on the private rental market to mend imbalances in housing, which is the main source of high household indebtedness.
- Reduce public- and private-sector debt.
- Use growth to structurally improve public finances.
- Incentivize more transitions from temporary into open-ended contracts to boost productivity and social security.
- Simplify income support schemes and family benefits. Too many poor Spaniards don’t get the help they are legally entitled to.
- Under- and over-qualification at work are widespread due to high school-dropout rates and skill mismatches.
- Regulatory disparities between regions inhibit growth.