On 3 July 2026, the Council published an explanatory note detailing its modifications to the European Commission's proposed Country-Specific Recommendations (CSRs) for Czechia, Lithuania, Malta, and Spain under the 2026 European Semester. The note invokes the 'comply or explain rule' (Article 29 of Regulation 2024/1263), under which the Council must justify any deviation from the Commission's draft recommendations.
For Czechia (CSR 3), the Council retained the Commission's text on improving affordable housing through public and non-profit sector involvement and property and income tax reforms, but added that tax measures should be complementary to other structural factors. For Lithuania (CSR 3), the Council kept the Commission's recommendation to improve SME access to finance via competition, capital market liquidity, and market participation, but explicitly disagreed with strengthening supplementary pension schemes for this purpose, arguing they contributed little to SME finance and funnelled savings outside the EU. For Malta (CSR 3), the Council changed 'Strengthen' to 'Continue strengthening' research and innovation, citing Malta's nominal R&D expenditure increases reported by Eurostat. For Spain (CSR 4), the Council did not consider it necessary to recommend further developing the disaster financing framework, but acknowledged the importance of monitoring it as per recital 32 of the 2026 CSR for Spain.
The note confirms that other changes to the CSRs had full Commission support. The Council is scheduled to formally adopt the CSRs at a meeting on 8 July 2026. The European Semester process coordinates EU member states' economic and fiscal policies, with CSRs providing tailored guidance. The 'comply or explain' mechanism, introduced in 2024, aims to increase transparency and accountability in the Council's handling of Commission proposals.