BRUSSELS (AP) ― The European Union softened its demands for austerity Wednesday when it gave France, Spain and four other member states more time to bring their deficit levels under control so that they can support their ailing economies.

The EU Commission, the 27-nation bloc’s executive arm, said the countries must instead overhaul their labor markets and implement fundamental reforms to make their economies more competitive.

Issuing a series of country-specific policy recommendations in Brussels, Commission President Jose Manuel Barroso said that the pace of reform needed to be stepped up across the EU to kick-start growth and fight record unemployment.

“We need to reform, and reform now. The cost of inaction will be very high,” Barroso said. “There is no room for complacency.”

After Europe’s crisis over too much debt broke in late 2009, the region’s governments slashed spending and raised taxes as a way of controlling their deficits ― the level of government debt as a proportion of the country’s economic output.

But austerity has also inflicted severe economic pain.

Slashing spending and raising taxes have proved to be less effective at reducing deficits than initially thought. As economies shrink, so do their tax revenues, making it harder to close those budget gaps.

Besides France and Spain, the Commission is also granting the Netherlands, Poland, Portugal and Slovenia more time to bring their deficits below the EU ceiling of 3 percent of annual economic output. That means they will be allowed to stretch out spending cuts over a longer time as they try to fight record unemployment and recession.

The Netherlands and Portugal are now granted one additional year, whereas France, Spain, Poland and Slovenia are granted two additional years each.

Some critics, however, insisted the Commission’s softening of austerity wasn’t enough to kick-start growth and fight unemployment.