Usually, the EPF Secretariat analyses in one go the Country-specific Recommendations and the Country Reports that underpin them. This year, however, the analysis of the Country Reports was done earlier (epf20-34 of 29.04.2020), because we expected a major disconnect between the Country Reports released just before Covid-19 broke out and the Council Recommendations released in the summer.

That is what happened. Whereas the Country Reports dwelt on all the classic real estate concerns with an extra new emphasis on affordable housing, the virus ended all that.

The European Semester was conceived as a post financial crisis instrument to contain spending and rationalise economies. That is now in complete reversal.

For every single country, Recommendation N° 1 is now:

  1. Take all necessary measures, in line with the general escape clause of the Stability and Growth Pact, to effectively address the COVID-19 pandemic, sustain the economy and support the ensuing recovery. When economic conditions allow, pursue fiscal policies aimed at achieving prudent medium-term fiscal positions and ensuring debt sustainability, while enhancing investment. Reinforce the overall resilience of the health system and ensure the supply of critical medical products.

Real estate, including what used to be N° 1 Recommendations for housing rental market reform in the Netherlands and Sweden, is all gone.

Energy renovation of buildings

The EPF Secretariat's April analysis of the Country Reports also stated:

"There is one new aspect to this year's Country Reports that is a big change and that in our view will survive the virus and even be strengthened by it: the new section on environmental sustainability. It is one manifestation of the European Commission's commitment to impregnate all of its work with environmental sustainability considerations, to ensure that the sustainability opportunities in each policy field are exploited."

That is what happened. In the Council Recommendations, every member state is asked to front-load investment in the green and digital transition and, with the exception of Austria, Finland, Poland, Romania, Slovenia and Sweden, there is special emphasis on front-loading energy efficiency renovation of buildings.

The operative word is 'front-load'. They want a disproportionate investment in the next couple of years and they are thinking of the € 750 billion of EU Recovery Funding that they want to front-load as well.

Full Secretariat report under epf20-55 of 16.07.2020

European Semester 2020 Country Reports