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Commissioner: EU semester recommendations outline ways to improve competitiveness

Recommendations of the European semester outline ways to improve the European Union's resilience and competitiveness, the Trade Commissioner Valdis Dombrovskis said in Brussels on Wednesday.

The country reports published as part of the package review the economic, employment and social developments, and the implementation of the recovery and cohesion programmes, Dombrovskis said.

The recommendations also tackle the most important challenges member states are facing, he said.

In its country report, the EC said Hungary should curb the growth of net expenditures “to put or keep general government debt on a plausibly downward path”, so the general government deficit could converge to 3 percent.

The EC also recommended that Hungary wind down energy support measures before the next heating season, and phase out the remaining price and interest rate caps.

Meanwhile, the government should take measures targeted to improve housing for low-income households, the EC said.

Further, “in light of prolonged delays, [Hungary should] significantly accelerate the implementation of cohesion policy programmes and the recovery and resilience plan, including the REPowerEU chapter, ensuring completion of reforms and investments by August 2026,” the report said.

During the half-time review of cohesion programmes, Hungary should stick to already accepted priorities, and focus on energy poverty and the least developed regions of the country.

The EC also called on Hungary to “improve the regulatory framework and enhance competition in product markets and services by avoiding arbitrary administrative interventions and the selective use of tailor-made legislation providing undue advantage or disadvantage to specific companies, by applying competition scrutiny systematically to business transactions and by reducing the use of emergency measures to what is strictly necessary, in line with the principles of the single market and the rule of law.”

Hungary must also improve the “adequacy of the social protection system”, including unemployment benefits; educational attainment levels as well as access to effective active labour market measures, the EC said.

Hungary should also “reduce overall reliance on fossil fuels, accelerate the diversification of gas supply towards non-Russian sources, and take steps to phase out fossil fuel subsidies”, the recommendation said.

The EC has also reviewed 12 member states’ compliance with deficit criteria as laid down in the European treaties, and said an excessive deficit procedure should be started in the case of 7 member states, Belgium, France, Italy, Hungary, Malta, Poland and Slovakia.

In a report prepared on macroeconomic imbalance, the EC said that while most member states returned to a stabler economy, Hungary was still suffering from imbalance.

The EC will now call on the euro group and the European Council to debate and eventually approve the recommendations.

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