Introduction to the European Semester: Coordinating and monitoring economic and fiscal policies in the EU

Written by Angelos Delivorias and Christian Scheinert,

In response to the financial and economic crisis, the European Union introduced a series of changes to its institutional architecture for economic and social governance, with the aim of achieving more integrated fiscal and economic coordination. At the heart of this new architecture is the ‘European Semester’, a process of socio-economic policy coordination that lasts from November until July each year, in which Member States discuss their economic reform and budget plans before adopting them, while the European institutions monitor progress and address recommendations at specific times throughout the year.

At the centre of the European Semester are three separate processes that work in parallel: fiscal surveillance based mainly on the stability and growth pact (SGP); surveillance of macroeconomic policies, under the macroeconomic imbalance procedure (MIP); and coordination of EU countries’ economic and employment policies, based on the integrated guidelines (in other words, the broad economic policy guidelines (BEPGs), together with the employment guidelines).

The Semester officially starts every November with the publication of the Annual Growth Survey and the Alert Mechanism Report (along with other documents) by the European Commission. Another ‘milestone’ is in February, when the country reports and (when required) in-depth reviews are published for Member States. In April, the Member States publish their stability or convergence programmes. In May comes another milestone, with the publication of the country-specific recommendations.

After July, the ‘European’ Semester, is followed by a ‘National’ Semester, where Member States incorporate what has been discussed and recommended at European level into their national draft budgets, which are then debated and adopted during the autumn.

During its limited existence, the Semester has been debated and examined by academics and institutions alike. The main points of discussion relate to parliamentary involvement in the Semester (notably linked to broader issues of legitimacy and accountability of the wider framework of economic governance), the country-specific recommendations and their declining level of implementation, as well as the role that the regions could play in the context of the Semester.

This overview touches on the latest factors that could have an impact on the process: the priorities that the new European Commission President, Ursula von der Leyen, has addressed to Commissioners Paolo Gentiloni and Valdis Dombrovskis in her mission letters. While those priorities were articulated very succinctly, they could provide a useful idea of how the Semester might evolve over the new Commission’s term.

Read this ‘in-depth analysis’ on ‘Introduction to the European Semester: Coordinating and monitoring economic and fiscal policies in the EU‘ in the Think Tank pages of the European Parliament.