The European Semester

The European Semester was established following proposals put forward by the Commission in the course of 2010 (the proposals, after being approved by Parliament and the European Council, were subsequently launched) with a view to strengthening the Union’s economic governance. In actual fact, the European Semester changes the coordination of both fiscal and structural economic policies of member states from ex-post to ex-ante coordination. Starting from 2011 the first half of each year is characterised by a cycle of intense political cooperation between the EU institutions and the 27 Member States, relating to both the economic agenda and fiscal surveillance. It is the mainstay of strengthened economic governance. The European Semester starts in Jaunuary with the submittal of the annual growth analysis by the Commission that sets EU priorities in terms of economic reforms and fiscal consolidation. These priorities are discussed and adopted in March by the Spring European Council. In April Member States submit to the Commission and their peers the National Reform Programs and the Stability and Convergence Programs. The Commission issues recommendations on these programmes, which are endorsed by the European Council in June and formally adopted by the EU Council in July. Member States take these recommendations into account when they draw up their national budgets that are discussed by the national parliaments in the second half of the year in compliance with the existing rules. This ensures that for the first time national budgets are discussed against the backdrop of a EU-wide frame of reference.

Further strengthening of the coordination of economic policies is ensured by the launch by the European Council meeting of 24-25 March 2011 of the Euro Plus Pact – “closer coordination of economic policies for competitiveness and convergence”. The Euro Plus Pact is a plan that has been added to the Europe 2020 Strategy, envisaging additional reforms aimed at improving competitiveness and convergence levels in Member states. The Euro Plus Pact has been approved by the Heads of State or Governments of the Euro zone and is adhered to by Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania. It may be adhered to by other countries. All participating States must submit their commitments in the relevant Stability or Convergence Programmes and in the National Reform Programmes.