Commission focuses on human capital and competitiveness.

On 1 and 2 December, the European Commission presented the autumn package of the European Semester to the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO). With this package, the Commission sets out the political and economic priorities for the coming cycle, placing particular emphasis on reforms and investments to strengthen human capital and competitiveness.

Contents of the package

The autumn package comprises the proposal for the Joint Employment Report, the Alert Mechanism Report and the newly introduced European Macroeconomic Report, as well as a proposal for a Recommendation on Human Capital in the EU. In March 2026, the Council is expected to approve the Joint Employment Report and formally adopt the recommendation on human capital.

European Semester

The European Semester is the central framework for coordinating and monitoring economic, budgetary and social policies in the EU. The annual cycle begins in November with the European Commission's autumn package, which sets out the policy guidelines for the following year, and ends in October with the submission of national budget plans. It provides the analytical and political basis for reforms and investments and serves as a reference framework for for guiding and assessing Member States' national reform and budget plans.

Joint Employment Report

According to the Commission’s proposal, labour markets generally remain robust. At the same time, certain structural weaknesses persist, threatening the EU’s global competitiveness and social cohesion. These include, in particular, slow growth in labour productivity and a pronounced shortage of labour and skilled workers.

The Joint Employment Report also contains the results of the country analysis under the framework for social upward convergence, based on the indicators of the Social Scoreboard. Using these indicators, the risks to upward convergence for all 27 Member States were initially identified. Subsequently, countries that, due to limited progress, will undergo in-depth analysis in spring 2026 were identified: Bulgaria, Finland, Greece, Italy, Latvia, Lithuania, Luxembourg, Romania, and Spain.

European Macroeconomic Report

The European Macroeconomic Report, newly introduced in this semester cycle, is intended to underpin the recommendations on economic policy for the euro area and the Alert Mechanism Report. The report provides an analysis of the main macroeconomic opportunities and risks. Key topics include productivity challenges and measures to strengthen long-term competitiveness, for example through promoting innovation, deepening the internal market, and mobilising private investment.

Against the backdrop of high savings rates in Europe and fragmented capital markets, the report examines the potential benefits of a savings and investment union for more effective capital allocation within the Union. It also highlights the growth and competitiveness challenges arising from pressure on spending on pensions, health and long-term care due to the ageing population.

Recommendation on Human Capital

For the first time, the Commission is proposing a Recommendation on Human Capital to the Council. It calls on Member States to mobilise both public and private resources and invest in people. The recommendation emphasises that these social investments benefit society, businesses and people alike and are essential for Europe's competitiveness.

EU Commissioner and Vice-President Roxana Mînzatu highlights that the European Semester must place greater focus on social investments. Alongside education and skills development, improved access to affordable housing is identified as a key social policy priority. The Recommendation on Human Capital places investment in people on an equal footing with the previous focus on capital investment.

The recommendation also highlights the importance of high-quality, up-to-date data and analysis. This includes the recently launched Social Investment Knowledge Hub (see the news on social investment). The aim of this hub is to bring together expertise that establishes a positive link between social investment and economic growth and fiscal sustainability.

What happens next?

On 15 December, the Commission presented the Autumn Package at a joint meeting of the Committees on Employment and Social Affairs (EMPL) and on Economic and Monetary Affairs (ECON). Following this, the European Parliament will outline its priorities, recommendations, and, where applicable, criticisms in a resolution. In March 2026, the Joint Employment Report will be officially approved by the Council, while the recommendation on human capital will be formally adopted.