European Semester

What changes did the European Semester introduce?

The European Semester introduced two novelties. The first is related to the timing of EU policy coordination procedures, while the other added a new component to policy coordination.  

 

Two timing-related innovations

The Semester:

1) synchronised the calendars of economic and fiscal policy reporting and evaluation at the EU level

Member states submit their national reform programmes (which include structural reform plans) and the stability and convergence programmes (fiscal plans) at the same time, in April each year.

The Commission evaluates them both at the same time too. In parallel, an assessment of macroeconomic imbalances is carried out.

This way the EU member states intend to achieve two goals:

  • better alignment of their reform and budgetary goals
  • more effective pursuit of their common EU-level goals

2) changed the coordination of national economic policies from ex-post to ex-ante


Under the Semester the member states submit their budgetary and reform plans in the early stages of their national budgetary processes. The Council issues recommendations for member states' plans before their budgets are presented to national parliaments.

In the past, the member states coordinated their policy plans at the beginning of the year in question, after the adoption of  national budgets. 

With such a shift of the timing of the EU policy coordination, the Semester provides timely input for the member states in early stages of their national policy planning.

 

A new component in policy coordination: surveillance of macroeconomic imbalances in the member states

The system, known as a macroeconomic imbalances procedure, was put in place in 2011 by the so-called "six-pack" (six EU legislative acts) that strengthens economic governance in the EU.

It is designed to: 

  • identify risks of unsustainable macroeconomic developments early,
  • help prevent their emergence and
  • correct them swiftly when they do occur.


The European Semester deals with the preventive part of this procedure.

Under the Semester, the Commission analyses the macroeconomic situation in the member states using a scoreboard of economic indicators. If the data show serious deviations from the agreed ranges, the Commission can carry out an in-depth review of the macroeconomic situation in separate countries and subsequently provide policy advice.

 

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