Competitiveness without compromising finances: EU recommendations for eurozone
From the EU executive 14 actions for the grand revival of the twelve-star economy. The knots of expensive housing and labour shortages, and the call to spend all Recovery Fund resources by the end of August 2026
Brussels – Growth and finances in order: the future of the EU and its eurozone passes through this imperative, which is by no means new, but which the Commission relaunches with new force. The European Commission’s recommendations for the eurozone and its countries can be summed up in this call for greater productivity and economic security, while maintaining sustainable public finances. An invitation, put in writing in the package of the European semester—the economic policy coordination and spending cycle for which monitoring and guidance documents are produced—delivered to capital cities.
In total, there are14 recommendations for governments, but the Commission emphasises six of them. The first of these is to re-prioritise budgets to meet the necessary expenditure on strategic investments. This is a reiteration of the “don’t spend more, but spend better” concept already used during the debate on the common budget. The second recommendation, linked to the first, is to invest as much as possible in defence. Specifically, it is urged here to focus on joint procurement and reduce market bottlenecks in the sector. And then, member states are called upon to utilise all Recovery Fund funds by 31 August 2026. A recommendation that closely concerns Italy, the main beneficiary of the special post-pandemic recovery fund, with about €191.5 billion between grants (69.5 billion) and loans (122 billion).
The goal for all is to work “individually and collectively within the Eurogroup” to promote quality work and skills. In this sense, for the first time, the Commission makes a recommendation concerning human capital, addressed to all 27 Member States, for “urgent action” to tackle structural challenges related to labour shortages that can damage competitiveness. The call is more wide-ranging and concerns strengthening the labour market by addressing the housing crisis.
The Commissioner for Economic Affairs, Valdis Dombrovskis [Strasbourg, 25 November 2025]
The report on the alert mechanism, which analyses macroeconomic risk factors, devotes a brief paragraph to the problem of high housing costs, emphasising how this can discourage labour mobility and have negative repercussions for productivity and competitiveness. The last two general recommendations are to strengthen the functioning of the single market and to implement the savings and investment market project.
“In a difficult global context, Europe must generate its own growth momentum by increasing productivity, fostering innovation, and removing obstacles to investment“, summarises Economy Commissioner, Valdis Dombrovskis, who calls on states to “release Europe’s full growth potential and ensure long-term prosperity.”
The remaining recommendations confirm the need to invest in the double green and digital transition across the board (research, development, training, and measures for businesses), insist on regulatory simplification, and the need to encourage sustainable wage growth, particularly for low-income groups.
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