Productivity is not growing fast enough in the European Union, investment is still too low and public debt remains high in countries most in need of reducing it, the European Commission said on Wednesday as it outlined a growth strategy for the bloc.
In annual recommendations to all EU countries, the executive Commission said the 27-nation bloc would only be successful if all its members focused on making growth sustainable.
"Public debt ratios remain on a declining path in many Member States, but not in those where debt reduction is most needed," the Commission said, referring to Italy, Greece, Portugal and Cyprus, which have debt to GDP ratios above 100%.
"Member States are still struggling to get back to their pre-crisis public investment levels. In particular, public investment spending remains at historically low levels and the ratio of public investment to GDP is projected to increase only marginally, especially in the euro area," it said.
The Commission said that countries with sound public finances, like Germany and the Netherlands which have had budget surpluses for years, should boost investment to raise growth and support the transition towards a greener and digital economy.
"Finally, a continued reduction of macroeconomic imbalances, both external and internal, will enhance the resilience of our economies," it said.