European Commission gives fiscal verdicts for member states

Euronews

2 days ago

The European Commission delivered its Spring Package on Wednesday, an economic update that feeds into its five-year plan to boost the EU's resilience and includes country-specific recommendations.
While fiscal responsibility remains important, the Commission underlined a need to boost defence capabilities.
This comes not only in the wake of Russia's invasion of Ukraine, but also increased hostility from Washington. US President Donald Trump has continually warned Europe that it needs to increase financial contributions to guarantee its own security.
'Amid rising security challenges, the national escape clause (NEC) under the Stability and Growth Pact is also drawn upon for the first time,' said the Commission.
The NEC allows member states to temporarily exceed maximum growth rates of net expenditure to boost defence financing. A total of 16 countries asked the Commission to implement this mechanism, specifically: Belgium, Bulgaria, Croatia, Czechia, Denmark, Estonia, Finland, Germany, Greece, Hungary, Latvia, Lithuania, Poland, Portugal, Slovakia and Slovenia.
Wednesday's Package also outlined country-specific recommendations to ensure that EU members are on track to boost their economic standing.
'Member States are encouraged to boost their competitiveness by closing the innovation gap, advancing decarbonisation in line with the Clean Industrial Deal, reducing excessive dependencies, increasing security and resilience, including by building up defence capabilities and promoting skills and quality jobs while ensuring social fairness,' said the Commission.
While 12 member states are considered to be 'compliant' in terms of medium-term spending plans, the Commission flagged Cyprus, Ireland, Luxembourg and the Netherlands as countries that could overshoot fiscal limits. Portugal and Spain were considered to be 'broadly compliant'.
The Commission noted that Austria, on the other hand, will face a formal procedure to bring its deficit back under control.
Romania was another member state rebuked in the report.
'Romania's net expenditure growth is significantly above the ceiling set by its corrective path, posing clear risks to correcting its excessive deficit by 2030,' said the Commission.
'The Commission is therefore recommending that the Council adopt a decision that establishes Romania has not taken effective action.'
Volvo Cars announced worldwide sales of 59,822 cars in May, which was a decrease of 12% compared with the same month in 2024. This was partly due to the company struggling with recently imposed US automotive tariffs.
Electrified models — both plug-in hybrids and fully electric vehicles — made up 44% of all car sales in May. This was a fall from 66% in May 2024. While fully electric models made up 21% of all May sales, plug-in hybrid models accounted for 23%.
The best-selling model in May was the XC60, which sold 19,408 units — a slight dip from the 20,507 units sold in the same month last year. The XC40/EX40 model took second place, with 14,892 units sold — an increase on May 2024's 13,640 units.
The third best-selling model was the XC90 with 8,794 units sold in May 2025. By contrast, 9,072 units of this model were sold in May 2024.
As of December 2024, Volvo Cars had about 42,600 full-time employees, with its head office based in Gothenburg, Sweden, and production plants across the US, Belgium and in China.
Volvo Cars also recently announced that it would be slashing 3,000 jobs, as part of wide-ranging cost-cutting measures, which are expected to save the company about SEK 18 billion (€1.6bn).
These layoffs will primarily affect office-based positions in Sweden, which make up around 15% of Volvo Cars' white collar workforce. Out of these 3,000 layoffs, around 1,000 will be consultant positions.
Earlier in May, the company laid off 5% of its staff in its Ridgeland, South Carolina facility, which accounted for 125 roles.
Volvo Cars said in a press release about the redundancies on its website: 'These structural changes are necessary for Volvo Cars to deliver on its long-term strategy, strengthening its foundations for profitable growth.
'Volvo Cars remains firm on its ambition of becoming a fully electric car company, as fully electric is the fastest growing market segment and Volvo Cars is a leader in this transition.'
Back in 2021, the company revealed that all its models would be electric by the end of the decade. However, it has pushed back this goal, citing rising uncertainties due to electric vehicle (EV) tariffs in many markets.
Apart from tariffs, slower European sales and the higher cost of materials have also affected several major car companies in Europe.
Nissan, Ford, General Motors, Volkswagen, Tesla and Stellantis have all announced layoffs in the last few months, as car companies scramble to become more efficient and adaptive in the current uncertain economic environment.