In Cyprus, "significant vulnerabilities persist despite an improved economic context and some recent stepping up of policy commitments", according to the European Commission.
The European Commission has given country-specific recommendations (CSRs) and economic policy guidance to all EU Member States for the next 12 to 18 months.
In February 2019, the Commission identified imbalances in 13 member states. Country-specific recommendations need appropriate follow-up to address these imbalances.
Based on in-depth reviews, the Commission concluded that 10 member states experience imbalances for the purposes of the macroeconomic imbalance procedure (Bulgaria, Croatia, France, Germany, Ireland, Portugal, the Netherlands, Romania Spain, and Sweden) and three member states experience excessive imbalances (Cyprus, Greece, and Italy).
According to the report, while a large number of member states has already embarked on various types of spending reviews (e.g. Cyprus, Estonia, Luxembourg, Slovakia and Spain), there is still scope to increase the use of such processes, expand their scope, improve the underpinning methodology and better link the reviews with the budgetary cycle.
In order to improve the functioning of the labour market, targeted interventions to strengthen the effectiveness of active labour market policies and/or to reinforce the capacity of employment services are recommended to Belgium, Bulgaria, Cyprus, Finland, Greece, Hungary, Ireland, Slovenia and Spain.
Poland, Portugal and Spain should tackle the high share of workers on temporary contracts, while promoting transitions towards open-ended jobs.
Recommendations to improve effectiveness, accessibility and sustainability of health care were addressed to Austria, Bulgaria, Cyprus, the Czech Republic, Greece, Finland, Hungary, Italy, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia.
Although progress in addressing investment barriers has been made both at national and at EU level, important barriers remain across countries and policy areas, the Commission said.
Skills shortages, institutional shortcomings and regulatory uncertainty remain among the main obstacles to investment in Bulgaria.
Unstable regulatory environment and insufficient availability of adequately skilled labour in some sectors remain the barriers in Poland. Weak business environment and access to finance are the main barriers in Cyprus.
In a number of Member States, notably in Austria, Cyprus, France, Germany, Malta, the Netherlands, Poland, additional efforts are needed towards meeting their greenhouse gas emission targets. Further investments in water and waste infrastructure are required in many Member States.
Supervision and enforcement of anti-money laundering frameworks remains an issue in several member states; country- specific recommendations are addressed to Bulgaria, Denmark, Estonia, Latvia, Malta and Sweden.
Country-specific recommendations are addressed to Bulgaria, Cyprus, Ireland, Italy, and Portugal to further reduce non-performing loans.
Further actions are also recommended to Bulgaria and Cyprus to strengthen the supervision of the non-banking financial sectors.
Brussels has adopted reports under Article 126(3) for 4 member states (Belgium, Italy, France and Cyprus), in which the Commission assesses their compliance with the debt or deficit criterion of the Treaty.
As an immediate next step, the Economic and Financial Committee is expected to formulate its opinion on the reports within two weeks.
“The Commission calls on the Council to endorse these country-specific recommendations and on member states to implement them fully and in a timely manner.”
