College Read-Out — Wednesday, 3 June 2026

Key Points

• The European Commission adopted a strategy and roadmap to enhance Europe's digital sovereignty and resilience.
• OceanEye initiative launched to advance Europe's ocean observation capabilities.
• Spring package emphasizes strengthening Europe's competitiveness amid geopolitical uncertainty and global competition.
• Member States urged to implement recommendations targeting fiscal sustainability, innovation, energy security, and education.
• Malta's excessive deficit procedure recommended for closure as it maintains a deficit below 3% of GDP.
• Bulgaria may face an excessive deficit procedure due to non-compliance with deficit criteria.

Full Transcript

Transcribed automatically from EbS (Europe by Satellite) · English audio track · AI-generated · May contain errors · Verify before quoting

Opening Statement

Good afternoon, everyone, and welcome to the readout of this morning's college meeting, as well as the press conference on the European semester, the spring package. With us today, we have the pleasure of having Executive Vice President Roxana Minzato and Commissioner Valdis Dombrovskis. EVP, the floor is yours for the readout. Thank you.

Good afternoon, and welcome to the readout of our college meeting. We have adopted two proposals, one strategy and one roadmap to strengthen Europe's digital sovereignty and resilience in a sustainable way. Executive Vice President Henna Virkkunen and Commissioner Jorgensen will come to the press room to present it after this press conference. Also, Executive Vice President Virkunen will announce a nomination that we have approved today, so please wait for that press conference to know more on this. Then we adopted OceanEye, an initiative to put Europe at the forefront of ocean observation. Commissioner Kadis and Commissioner Zaharieva will present it in the press room at 4.15 p.m. later today. We also had a very interesting orientation debate on the Public Procurement Act. And lastly, as you very well know, we adopted our spring package of the European semester, and Commissioner Dombrovskis and myself will present the package, and I will, of course, refer to the social and employment dimension aside. Thank you. Thank you. Commissioner.

Valdis Dombrovskis: Yes, thank you very much. Good afternoon, everyone. The European Commission is presenting the European semester spring 2026 package as a moment of profound geopolitical uncertainty and intensifying global competition. The European economy continues to demonstrate resilience as it navigates one crisis after another, but there remains an urgent need for Europe to act to enhance its competitiveness. This is essential to secure our long-term prosperity and preserve our strategic autonomy. The price of failing to act is simply too high, a diminished Europe shaped by global events rather than shaping them. It's a future we should be unwilling to accept. This project is a shared responsibility of the EU institutions and member states alike, and success demands that we all move in the same direction and move urgently. This is why this year's recommendations to member states target strengthening Europe's competitiveness. They broadly fall in four categories, first ensuring fiscal sustainability. They include recommendations of stepping up the use of spending reviews, reforms of taxation systems, and measures to improve long-term sustainability of care and pension systems. Secondly, closing the innovation gap and improving the business environment. These cover simplifying the regulatory framework, improving access to finance, and lowering single market barriers. Thirdly, energy security and affordability. This entails strengthening grid capacity and ensuring energy storage to enhance energy security. And fourthly, and Roxana will be speaking more about this, strengthening people's education and skills while improving social fairness. In some cases, the recommendations also tackle housing affordability challenges factoring in the regional dimension. And finally, our recommendations also acknowledge the unique challenges faced by our eastern border regions. Member states are directly concerned how to see the recommendations focused on addressing their socioeconomic preparedness and security challenges. The Commission calls on member states to translate today's recommendations into policy action without delay. This brings me to the fiscal aspects of today's package. Sound public finances are a vital asset for preserving macroeconomic stability in an increasingly unpredictable and challenging world. We must be careful to safeguard them in a context of persistently high debt in a number of Member States and new and urgent demands on public finances. The Spring Package also takes into account the impact of energy shock resulting from the conflict in the Middle East. We continue to insist that measures to support households and businesses must be temporary and targeted and should not increase aggregate demand for fossil fuels. Moreover, we have decided that measures to strengthen the structural resilience of the European energy system and accelerate the transition away from fossil fuels may benefit from the existing flexibility within the fiscal framework. Upon request by a Member State, the scope of the current National Escape Clause for Defence can be broadened. So within the existing cap of 1.5% of GDP, a dedicated annual cap of 0.3% of GDP could apply specifically for these energy support measures. This would be available for the period of 2026 to 2028 with a cumulative cap of 0.6% of GDP. For those few Member States which have already used full flexibility under the National Escape Clause to increase defence spending, this would allow to move beyond this 1.5% of GDP subject to additional fiscal sustainability assessment. Looking ahead, our recommendations call on Member States to remain in line with fiscal requirements under their medium-term plans or the excessive deficit procedures to enhance the quality and efficiency of public spending. Then we also assess Member States' compliance with the EU fiscal rules. All 10 Members currently subject to the excessive deficit procedure took effective action last year. This means no further steps need to be taken under the excessive deficit procedure at this stage. However, for Hungary, the net expenditure growth rate is projected to be at risk of material non-compliance with the Council recommendations this year. This entails a clear risk of no effective action for this year and could require a stepping up of its excessive deficit procedure at the later stage. The Commission will monitor the situation closely and reassess it in autumn. Then, Malta reduced its general government deficit below 3% of GDP in 2025 and is projected to remain below 3% of GDP both this year and next. The Commission is therefore recommending ending Malta's excessive deficit procedure. At the same time, several Member States recorded deficits above 3% of GDP last year. The Commission assessed the compliance of these Member States with the treaty's deficit criteria. It concluded that there is no case to open excessive deficit procedures for Germany, Estonia, Latvia and Slovenia. For Bulgaria, the budget deficit last year was not exceeding 3% of GDP when taking into account additional defence spending under the National Escape Clause. However, as of this year, the excess of 3% of GDP is no longer fully explained by the additional defence spending. Therefore, the report concludes that the deficit criterion is not complied with. The next step is for the Economic and Financial Committee to formulate an opinion on this assessment. And the Commission would be then proposing to open an excessive deficit procedure for Bulgaria. The Commission will continue to closely monitor fiscal developments in the coming months and we will return to our assessment of compliance of all Member States in the European Semester Autumn Package. And a final word on the findings of macroeconomic imbalances procedure. Seven Member States were selected to undergo the reviews on the basis of our alert mechanism reports. The report identified those Member States potentially experiencing economic imbalances and our classification of imbalances is based on three criteria. They are gravity, evolution and policy responses. And our assessments find that three Member States, Greece, the Netherlands and Sweden, no longer experience imbalances. Three Member States, Italy, Hungary and Slovakia are experiencing imbalances. And one Member State, Romania, continues to experience excessive imbalances. To conclude, a path forward is clear. Advancing our competitiveness agenda and maintaining fiscal sustainability go hand in hand. Both are essential to securing Europe's long-term prosperity, resilience and sovereignty. The work ahead, as laid out in today's recommendations, will require determined efforts and the Commission stands ready to support Member States in delivering on this essential agenda. Thank you. And with this, I pass the floor back to Roxana for the social part of the European Semester Package.

Roxana Minzatu: Thank you so much, Valdis. As my colleague mentioned, this Spring Package comes as the world is navigating a very complex economic and geopolitical environment. Europe is facing pressure from outside, but indeed our answer must be to strengthen our resilience from within. And I would add two figures to what was already said. Due to the war in the Middle East, up to 1.3 million jobs are at risk, and we are talking about jobs in energy-intensive industry particularly. Let me also underline that increased energy costs will have a particular negative impact on lower-income households in Europe, which is why we recommend that all Member States take targeted measures so that they can support vulnerable groups. At the same time, we look at a reality where 77% of our European companies say that skill shortages remain the main barrier for their investments. So all of the above are also reflected in the findings of our Social Convergence Framework, part of the European Semester. And compared to last year, we see that an additional of three Member States are now facing risks of social imbalance. Competitiveness that leaves social imbalances behind is really not sustainable competitiveness. And in this context, we have three main priorities that I would like to highlight from our employment guidelines and which are also reflected in the recommendations that we offer to our Member States. Our response is simple. Invest in people, improve working conditions, and tackle the cost-of-living crisis. First, a few words on human capital, on investing in people, because I think it's important to say that we cannot deliver on any of our goals as a union together without people having the right skills in the right time, in the right place. Skills are not a mere social add-on to competitiveness. Skills are competitiveness. And in a nutshell, that is actually the work that we are already doing while implementing the Union of Skills policy. Second, on labor shortages, which are due to poor working conditions, because this is part of the reality. We cannot attract talents. We cannot reduce shortages. We cannot improve people's earnings without making sure we have good working conditions. And third, we need to look at the cost-of-living crisis and the best ways to tackle it. And on this, I want to recall the fact that on the 6th of May, we have adopted our first-ever European anti-poverty strategy exactly addressing this important challenge. These three priorities that I've mentioned, skills, working conditions, fighting poverty, all reinforce each other. Better skills lead to higher quality jobs. Quality jobs are always the best way out of poverty and towards a life in dignity. And this is the virtuous circle that we need for Europeans. Better skills, better jobs, better lives, even in times of crisis and shocks. And allow me to underline the human capital perspective a bit more, because this is a novelty in this semester's cycle. So this semester marks a shift that we need to make. We are now looking at competitiveness through the lens of people. In the autumn package, we proposed for the first time an EU-wide recommendation on human capital. And in it, we looked at where Europe needs to step up collectively so that we raise skill levels across our union. But especially in those strategic sectors that define and will define our competitiveness. And we focused on six key areas. We focused on basic skills. We focused on STEM. On vocational education and training. On teachers. On skills portability and also on skills intelligence, anticipation and forecast. And we applied this same lens now to all of our 27 member states. We identified where each country should focus its efforts. And we translated that analysis into recommendations that are adapted to specific challenges of member states. For instance, 15 member states received recommendations on STEM. Science, technology, engineering, mathematics, education. And you know how important it is for our industry to have talent in exactly these fields. Ten of our member states received recommendations on improving vocational education and training. And you know that the biggest labor shortages that we have are in occupations that are in need of such a type of vocational training. Four of our member states received recommendations on skills intelligence. And these are systems that are very important. Because without the proper data, without the proper intelligence, we cannot tailor efficiently our policies. Especially in such a transforming, even disruptive world that we are navigating. We are of course not issuing one size fits all advice. We are identifying where each member state can really make the biggest difference according to their circumstances. With this semester we are making a very clear statement. That people, their skills, their jobs, their living standards matter enormously for our European competitiveness. And my message to our member states is that we need to strengthen our policies, our interventions. And we as European Commission are here to support and work together with them. In the end, Europe's strongest asset is not only its single market, is not only its industry, is not only its technology, it is its people. And a Europe that invests in its people is a Europe that will be able to out-compete, to out-innovate and outlast any challenge that is thrown at it. That is what this semester is about and that is what we will keep fighting for. Now with a more people-oriented approach. Thank you. Thank you, EVP and Commissioner. And as always on college days, do not hesitate to ask your questions in any of the 22, I think, official EU languages. And let us start there, Simone.

National Escape Clause and Defense Spending

Q (AGI): Hi, Simone Tusceli for the Italian news agency AGI. I have two questions, if I may. First question on the National Escape Clause on energy and the extension of the National Escape Clause. Are member states that apply for the National Escape Clause forced to spend it also for defense spending? Or can they use that flexibility for energy only? Do you have that possibility? And the second one is on the recommendations for Italy. It is criticized for the use of measures that are not untargeted and inefficient to tackle any energy crisis. So I was wondering, in the talks with the Italian government, did you mention this issue? And have you had any reassurance that measures like this will not be renewed, since the Italian government is considering renewing the cutting of the excise duties on fuels? Thank you so much.

Spokesperson: Thank you for this question. So how this new fiscal flexibility will function? So member states will be able to apply for extending the scope of the National Escape Clause from defense also to energy. And this energy spending will be capped to 0.3% per year for a period of 2026 to 2028, but with a cumulative cap of 0.6% over the three years period. And this flexibility will be available concerning measures undertaken as of February 2026, so since the beginning of the war in Iran. And it covers measures which help us in a way to reduce our dependency on fossil fuels. So it may concern, for example, large-scale investment projects in energy grids, in rolling out renewables, but it also may concern subsidies to households and companies if they take measures moving away from fossil fuels. That may include, for example, subsidies for purchasing electrical vehicles, subsidies for changing the heating system at homes from oil and gas to heat pumps, for example, energy efficiency improvements, solar installations, batteries to store electrical energy, these kind of measures. So you asked whether National Escape Clause forced member states to do so. Well, it's worth noting that National Escape Clause does not force anything. National Escape Clause provides additional fiscal flexibility which a member state may or may not use. And finally, on the measures, so this additional fiscal flexibility which we propose, indeed, so it does not cover support measures which subsidizes fossil fuel use, like, for example, untargeted excise tax reductions. And there, our recommendation remains unchanged to have temporary untargeted measures not to sustain the demand for fossil fuels because the problem right now is we are facing supply shock. And you cannot address supply shock with stimulating demand because if many countries will be doing this, this will just sustain higher energy prices for oil and gas prices. And as a result, member states will be spending lots of money for a limited gain. So, therefore, those are the temporary targeted measures which do not increase demand for fossil fuels remains our recommendation as regards the general support measures. Thank you. Let me see first here, Maria.

EU Housing Situation and Greece

Q (EFS): Hello, Maria Psarra with EFS in Greece. If I'm not wrong, in the report I saw a specific analysis about housing for the first time. I would like to know what's the situation in general in the EU when it comes to the housing needs. And a little more elaboration on Greece's housing problem because I think that it is one of the few countries that there is no social housing there. So, please, could you elaborate a little more? Thank you.

Spokesperson: Well, as regards housing, indeed, housing affordability is a new topic in a European semester which we are covering right now. It's worth noting that it's generally a new policy we are tackling also at the European level because we know that primarily housing is tackled at local, regional, national level. So, it's new for the European level. But it's true that many countries are experiencing issues with housing affordability. That's why it features in our analysis. And that's why also some member states are getting concerns. And that's why also some member states are getting country-specific recommendations regarding to addressing the issues of housing affordability, focusing primarily on the supply side of strengthening the supply of affordable housing. Thank you. Good. And we continue. Please, there.

Slovenia's Economic Policy

Q (Slovenian Press Agency): Hello, Blaž Mohorčič with the Slovenian Press Agency. I have a question for Commissioner Dombrowski on Slovenia. I would like to know what are the reasons that you have decided not to propose an EDP for Slovenia. Is one of them maybe also that we are getting a new government in these days so that they have time to adopt some measures? Thank you.

Spokesperson: Well, yes. In case of Slovenia, Slovenia was one of the countries we were assessing concerning its compliance with the deficit criterion as budget deficit is projected to exceed 3% of GDP both this year and next. So it's worth noting that last year Slovenia's budget deficit was still below 3% of GDP but is projected to stay at 3.3% this year and 3.5% next year. We are doing this assessment also in a context of national escape clause whether this excess is explained by increase in defense expenditure under the national escape clause and that is the case in Slovenia. But we will continue to monitor the situation closely and come back to this assessment in autumn European semester cycle. Very good. Yes, please.

Defense Spending via National Escape Clause

Q (EURACTIV): Good afternoon. Alice Tidy for EURACTIV. I have a question relating to the national escape clause for defense. Obviously this was the main financial plank in the defense readiness roadmap and the commission estimated that member states who activated the national escape clause could invest up to 650 billion into defense by 2030. It's now been a year. Can the commission tell us how much member states have collectively spent on defense by using this escape clause and whether or not it still sticks to the 650 billion estimate? Thank you.

Spokesperson: Yes. So as regards the 650 billion estimate that was a figure how much defense spending could potentially increase if all member states were to fully use the national escape clause. Well, we know that a large majority of member states have requested the activation of national escape clause but not all of them. So not all member states are using and also those member states which are using national escape clause, a large majority of those member states have not used it to full extent. So clearly I don't have specific figures right now on how much defense spending has increased the function of national escape clause but clearly it's not approaching the 650 billion euros we were mentioning because not all member states are not using it and not using it to full extent. Well, with that said, the national escape clause continues to apply for a four years period. Member states have their plans to continue increase defense spending. There may be new member states applying for using this national escape clause. Right now, for example, commission finalizes Spain's assessment and it's now pending council confirmation. So therefore one can project that this national escape clause will continue to help member states to increase their defense expenditure. Thank you and let's move online as we have a few questions there. Jan Disseldorf.

Extension of National Escape Clause

Q (Süddeutsche Zeitung): Thank you very much. Jan Disseldorf, Süddeutsche Zeitung. Two questions also on the national escape clause. So your documents refer in one place to the theoretical possibility of extending it and in another it says that the commission is proposing to extend the national escape clause to energy investments. What is required for this proposal to be implemented? Like who must give their approval for the national escape clause to be extended? And the second question, how do you prevent like a cutthroat competition with defense spending? So yeah, that's basically it. Thank you.

Spokesperson: Yes, so on this national escape clause, so member states would need to apply to extend the scope of national escape clause from defense to also the energy part. And for a large majority of member states that would be fairly automatic. For some member states which have reached or are reaching the 1.5% of GDP increase in defense expenditure, in a sense exhausting this flexibility for defense, we foresee that for those member states it's possible to move above 1.5% of GDP exactly to avoid this competition and also to ensure that level playing field among member states. But in this case it would be subject to additional debt sustainability assessment because, as you know, activation of national escape clause requires debt sustainability assessment, whether debt remains sustainable also after applying this additional flexibility. But we see that a large majority of member states are not approaching the 1.5 limits as regards this flexibility for defense, so therefore there is scope for this extension and we will avoid this, as you called, cutthroat competition. But it's also worth noting that there are also other existing possibilities to mobilize European resources to address energy challenges. I would just remind that Executive Vice President Fito recently wrote a letter to all relevant authorities and member states to encourage them on voluntary basis to make use of resources available under Recovery and Resilience Facility and Cohesion Policy. So also that possibility exists for member states to mobilize additional resources as a response to current energy crisis. Thank you, Commissioner. Indeed, and we've been making reference also to that in this press room often. Let me take another question online, as we have several there. Suzana Freix.

Portugal's Budgetary Situation

Q (Portugal): Thank you so much, Suzana, as I see Portugal. To Commissioner, I would like to ask you about the budgetary situation in Portugal. We see that you point to a deviation from what is the recommended limit for net expenditure. We see that for the time being, due to the fact that Portugal has a quite balanced budgetary situation, there are no consequences. But when you alert to this deviation, do you see here a concerning pattern? And for Vice President, there are also some recommendations when it comes to health, and I mean like those that are working for the health care system. You are recommending the government to increase their working conditions in terms to – well, so also the SNS, I mean the NHS in Portugal become more attractive, if you can elaborate on that. And also when it comes to housing, here we see that, well, the funds from the recovery fund paid off, but we can also read that more has to be done when it comes to building more social housings and housing at affordable prices. So how can the country build more without less funds once the RF now is over? Thank you.

Spokesperson: Yes, so on this first part of the question, well, all in all, Portugal has a strong fiscal performance, so its budget was in surplus last year, its debt-to-GDP ratio went below 90% of GDP last year, and Portugal's budget is expected to stay close to balance both this year and next, and correspondingly also debt-to-GDP ratio will continue to go down. So in terms of our assessment of Portugal's fiscal compliance, indeed we are using this clause that for member states whose budget is close to balance, this is seen as compliance with the EU's fiscal rules. And that's exactly what we are applying in case of Portugal. Just a few comments on the fact that we do look at all of our member states' quality of jobs. And we address, of course, specific challenges and constraints in our member states. And the care sector and the health care sector is quite important for our preparedness. And of course, challenges are different in different member states. Remember, it is a recommendation. We have the European Social Fund Plus. Portugal is an important beneficiary of this fund in the current cohesion policy framework. So it is important that funds are invested in a way that quality of employment in specific sectors, training, skilling, but also working conditions are improved. And of course, looking ahead at the negotiations for the next MFF, national, regional, and partnership plans, which will have a minimum of 14%, potentially, we'll see the negotiations, what result they lead to. Well, they will have a minimum social ambition. ESF will continue to be part of the plans. We need to address the connection between these resources and the sectors that need most investment in people. And actually, this cycle of the semester is extremely relevant for the way that the member states will be planning their NRPPs for the next budgetary cycle. Then on housing, I mean, I wouldn't add very much, because as was mentioned here also by Commissioner Dombrowski, generally speaking, this is present in the semester. We are looking at ways that member states need to address supply, developing social housing, and supporting vulnerable beneficiaries is of utmost importance. The tools that member states have at their disposal, as was also mentioned here, from the allocations in the current cohesion policy, with also the midterm review, so the incentives that we've given to member states so that they are able to more easily, and with some financial budgetary incentives, to reallocate towards housing. These are responses that this Commission has given. So it's not just the recommendations, but we also come with a set of solutions. Thank you. And we will take a final question. That's all we can do today in the room. Lorenzo.

Energy Expenses and Excessive Deficit

Q (Asca News): Thank you. Lorenzo Consoli from Asca News, Italy. I would like to ask Commissioner Dombrowski, what does this new proposal concerning the energy expenses, what does it mean for countries that are under excessive deficit procedure, like Italy and France? Because, of course, we know that countries that are not under excessive deficit procedures, they will have 1.5% expenditure for defence and 0.3% that will not be considered for entering the procedure. But countries that are under the procedure, what is the advantage for them? What can they do with this 0.3%?

Spokesperson: Well, yes. There, I would say, the approach is not changing. So it applies to the entire 1.5% National Escape Clause. It's available both for countries outside and inside excessive deficit procedures. So what it means that if a country is applying for National Escape Clause and then using, we are taking it into account when assessing the country's compliance with the fiscal target. So if you're assessing the country's compliance with excessive deficit procedure, we take into account this additional fiscal flexibility granted by National Escape Clause. Thank you. And this brings us to a close.

Thank you, EVP. Thank you, Commissioner, for sharing your knowledge across the 27 member states. And we've had some country-specific questions. So thank you very much to you. Please do not go far. We will resume at 2 p.m. for those of you who are interested with Executive Vice President Virkunen on the tax sovereignty package, which was adopted also today, this morning. So see you in 15 minutes. Thank you. This is a work of fiction. Any resemblance to anyone, living or dead, is coincidental and unintentional. This is a work of fiction. Any resemblance to anyone, living or dead, is coincidental and unintentional. Plus... It's the police! This is a work of fiction. This is a work of fiction. This is a work of fiction. This is a work of fiction.

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