Blog Post

Implementation of European Semester recommendations worsens further

Economic policy coordination in the EU hardly works: the implementation of economic policy recommendations made in the context of the European Semester was modest in 2011, and has deteriorated in each year since then.

By: , and Date: June 15, 2016 Topic: European Macroeconomics & Governance

The European Semester is a yearly cycle of economic policy coordination within the European Union. It is supposed to improve economic policy coordination within the union and ensure the implementation of the EU’s economic rules, such as those in the Stability and Growth Pact (SGP) and the Macroeconomic Imbalance Procedure (MIP). Each year, the European Semester ends with country-specific recommendations (CSRs) regarding budgetary and economic policies for each EU country not under financial assistance, as well as for the euro area as a whole.

Last year we calculated a European Semester reform implementation index, similar to the work of Servaas Deroose and Jörn Griesse. The index ranges between zero (no or limited progress on all recommendations) and one (full implementation of, or substantial progress on, all recommendations). The index is based on the European Commission’s qualitative assessment of the implementation of the CSRs.

We have updated our conclusions with the 2016 assessments of the 2015 CSRs. The figure below shows continued deterioration: while implementation of CSRs was modest at the inception of the European Semester in 2011, the implementation index has fallen steadily each year since then. The weak and deteriorating implementation is likely related to the fundamental problem of EU economic policy coordination, which we highlighted last year: national policymakers are accountable to their national parliaments and focus on national interests, which often differ widely across member states. It is therefore not all that surprising that economic policy coordination in the EU hardly works at all.


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Parliamentary Testimony

European Parliament

New life for an old framework: redesigning the European Union's expenditure and golden fiscal rules

Testimony before the European Parliament on the subject of EU fiscal policies.

By: Zsolt Darvas Topic: European Macroeconomics & Governance, European Parliament, Testimonies Date: November 17, 2020
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External Publication

European Parliament

New life for an old framework: redesigning the European Union's expenditure and golden fiscal rules

This briefing paper focuses on two aspects of the EU fiscal framework: whether an expenditure rule would be more reliable than a structural budget balance rule and the possible benefits and drawbacks of introducing a golden rule to exclude certain types of investment from the operational fiscal rule.

By: Zsolt Darvas and Julia Anderson Topic: European Macroeconomics & Governance, European Parliament, Testimonies Date: October 14, 2020
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External Publication

European Parliament

What role for the European Semester in the recovery plan?

In this paper, the author looks at the implications arising from the focus of the Recovery and Resilience Plans in the context of the European Semester.

By: Thomas Wieser Topic: European Macroeconomics & Governance, European Parliament, Testimonies Date: October 12, 2020
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Opinion

EU policy recommendations: A stronger legal framework is not enough to foster national compliance

In 2011, the EU introduced stricter rules to monitor the implementation of country-specific policy recommendations. Using a new dataset, this column investigates whether these new laws have increased national compliance. There is no evidence that these stricter processes matter for implementation rates, whereas macroeconomic fundamentals and market pressure are important determinants of implementation progress. These results suggest ways to improve the effectiveness of European policy coordination that go beyond stronger legal processes.

By: Konstantinos Efstathiou, Guntram B. Wolff and Bruegel Topic: European Macroeconomics & Governance Date: July 23, 2019
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Working Paper

What drives national implementation of EU policy recommendations?

The authors use a newly-compiled dataset to investigate whether and why European Union countries implement the economic policy recommendations they receive from the EU.

By: Konstantinos Efstathiou, Guntram B. Wolff and Bruegel Topic: European Macroeconomics & Governance Date: April 25, 2019
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Blog Post

What to look out for in the latest European Semester package

Implementation of the European Commission’s country-specific policy recommendations (CSRs) is at a low rate overall. Whether this trend has continued, particularly among those countries judged to have excessive macroeconomic imbalances, will be evident in the soon-to-be-released reports of the Commission.

By: Konstantinos Efstathiou, Guntram B. Wolff and Bruegel Topic: European Macroeconomics & Governance Date: February 26, 2019
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Policy Contribution

Is the European Semester effective and useful?

The authors study whether and to what extent EU countries implement recommendations on macroeconomic imbalances given by the EU in the so-called European Semester. Overall implementation of recommendations by EU countries has worsened in the last few years, in particular when it comes to recommendations addressed to countries with excessive macroeconomic imbalances.

By: Konstantinos Efstathiou and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: June 13, 2018
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Blog Post

Naughty students or the wrong school: why is the European Semester proving ineffective?

The fundamental problem of economic policy coordination in the EU is that national policymakers are accountable to their national parliaments and focus on national interests, which in many cases differ widely in different member states. It is therefore not all that surprising that economic policy coordination in the EU hardly works.

By: Zsolt Darvas, Alvaro Leandro and Bruegel Topic: European Macroeconomics & Governance Date: November 18, 2015
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Policy Contribution

European Parliament

The limitations of policy coordination in the euro area under the European Semester

This paper assesses economic policy coordination in the euro area under the European Semester. Despite the collective decision to create this new system of policy coordination, this paper shows that the European Semester has been rather ineffective.

By: Zsolt Darvas, Alvaro Leandro and Bruegel Topic: European Macroeconomics & Governance, European Parliament, Testimonies Date: November 12, 2015