On 17 June 2010, the European Council adopted the Europe 2020 Strategy which provides a framework to put the European economies on the path to smart, sustainable and inclusive growth.
It also agreed on the introduction of the European Semester, an EU level policy coordination tool which is part of a broader EU aim to strengthen economic governance. This more integrated surveillance framework governs the:
- implementation of fiscal policies under the Stability and Growth Pact to strengthen economic governance and ensure budgetary discipline,
- implementation of structural reforms in the context of Integrated Guidelines outlined in National Reform Programmes to ensure progress towards the agreed goals of the EU Strategy for Growth and Jobs ("Europe 2020").
The Euro Plus Pact provides complementary objectives agreed by the euro area Member States as well as by six non euro area Member States: Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania.
The annual European Semester is a process composed of two phases:
- the first phase runs up to the spring European Council meeting,
- the second phase runs from that meeting to early summer.
Why was the European Semester developed?
The economic crisis demonstrated a need for stronger economic governance and better policy coordination at the EU level.
On the initiative of a task force chaired by President Van Rompuy, the Council endorsed in 2010 the European Semester as a policy coordination tool. In 2011, EU countries decided to strenghten economic coordination by adopting the so-called "six-pack". This includes:
- strengthened fiscal rules of the Stability and Growth Pact,
- a new cooperation on macroeconomic imbalances, and
- a directive on national budgetary framework.
The first European Semester cycle was launched in January 2011.