There is a risk the draft budgetary plans of Croatia and three other member states will not be in line with Council of the EU recommendations due to a fast rise in nationally financed net primary expenditure and the fact that they have not begun to wind down energy measures, the Commission said on Tuesday.

The European Commission today presented the European Semester Autumn Package, which includes an annual growth survey, giving EU member states’ government political guidelines for 2024; the Alert Mechanism Report, which points to possible economic imbalances and initiates the annual Macroeconomic Imbalance Procedure; a Joint Employment Report for 2024; and recommendations for the euro area and opinions on the 2024 draft budgetary plans of its member states.

Assessing budgetary plans, the Commission called on Croatia, Belgium, Finland and France to take the necessary measures to align with Council recommendations.

Croatia is a country in which net increase in nationally financed net primary expenditure is really above what is recommended and that the expenditure is increasing quite fast, a Commission official said.

Croatia’s fiscal situation is not that bad and it is positive that public investments, supported by the Recovery and Resilience Facility, are increasing quite fast, the official said.

Nonetheless, it is important that departures from fiscal targets don’t make the situation worse, he added.

According to Council of the EU recommendations from July, euro area member states were asked to ensure a prudent fiscal policy, in particular by limiting the nominal increase in nationally financed net primary expenditure in 2024.

All member states should preserve nationally financed public investment and ensure the effective absorption of grants under the Recovery and Resilience Facility and other EU funds, and wind down the energy support measures in force as soon as possible.

Most member states are projected to phase out the remaining energy measures in 2023 and 2024, the Commission said. “However, this is not the case for France, Croatia, Luxembourg, Malta, Germany and Portugal, which are projected to have substantial measures still in force in 2024.”