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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,

Publishing date
26 February 2019

This Wednesday, the European Commission is expected to adopt the winter package of the so-called European Semester, the cycle of surveillance and coordination of economic policies at the EU level. The package will include the categorisation of countries in the Macroeconomic Imbalances Procedure (MIP) for 2019 and, thus, mark a significant juncture in this year’s process.

Specifically, for a number of member states[1], an in-depth review (IDR) will determine the existence and nature of macroeconomic imbalances and evaluate their gravity. Based on that assessment, the member states will be classified accordingly into groups: countries with no imbalances, those with imbalances, and those with excessive imbalances.

This classification will, in turn, determine the stringency of monitoring that member states will be subject to in relation to their country-specific recommendations (CSRs), as well as the possible enforcement mechanisms available to European institutions in case of poor compliance.

But do countries actually follow the guidance they receive from Brussels on their economic policies? The answer is that so far overall implementation rates have been low[2]. Between 2013 and 2017, the implementation record of member states has ranged from what the European Commission considers “limited progress”[3] to “some progress”[4] (Figure 1).

In addition, implementation has deteriorated over time. This has been the case particularly among countries classified as having excessive imbalances (Figure 2). Whether this trend continued into 2018 remains to be seen on Wednesday, when the Commission’s assessment of progress with last year’s CSRs will be also released.

Notes

[1] Last November, the Alert Mechanism Report concluded that 15 member states were facing significant risk of imbalances. As a result no IDR is carried out for these member states, which are classified in the no imbalances category. Categorisation is pending only for the remaining 13 member states (Bulgaria, Croatia, Cyprus, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Romania, Spain, and Sweden).

[2] The European Commission uses five-point scale to assess implementation of recommendations: “no progress”, “limited progress”, “some progress”, “substantial progress” and “fully addressed”.

[3] “Limited progress” means that the member state: has announced certain measures but these only address the CSR to a limited extent; and/or presented legislative acts in the governing or legislator body but these have not been adopted yet and substantial non-legislative further work is needed before the CSR will be implemented; presented non-legislative acts, yet with no further follow-up in terms of implementation which is needed to address the CSR.

[4]  “Some progress” means that the member state: has adopted measures that partly address the CSR; and/or  the Member State has adopted measures that address the CSR, but a fair amount of work is still needed to fully address the CSR as only a few of the adopted measures have been implemented. For instance: adopted by national parliament; by ministerial decision; but no implementing decisions are in place.

About the authors

  • Guntram B. Wolff

    Guntram Wolff was the Director of Bruegel. Over his career, he has contributed to research on European political economy and governance, fiscal, monetary and financial policy, climate change and geoeconomics. Under his leadership, Bruegel has been regularly ranked among the top global think tanks and has grown in influence and impact with a team of now almost 40 recognized scholars and around 65 total staff. Bruegel is also recognized for its outstanding transparency.

    A recognized thought leader and academic, he regularly testifies at the European Finance Ministers' ECOFIN meeting, the European Parliament, the German Parliament (Bundestag) and the French Parliament (Assemblée Nationale). From 2012-16, he was a member of the French prime minister's Conseil d'Analyse Economique. In 2018, then IMF managing director Christine Lagarde appointed him to the external advisory group on surveillance to review the Fund’s priorities. In 2021, he was appointed to the G20 high level independent panel on pandemic prevention, preparedness and response. He is also a professor (part-time) at the Solvay Brussels School of Université Libre de Bruxelles, where he teaches economics of European integration.

    He joined Bruegel from the European Commission, where he worked on the macroeconomics of the euro area and the reform of euro area governance. Prior to joining the Commission, he was coordinating the research team on fiscal policy at Deutsche Bundesbank. He also worked as an external adviser to the International Monetary Fund.

    He holds a PhD in economics from the University of Bonn and studied in Bonn, Toulouse, Pittsburgh and Passau. He taught economics at the University of Pittsburgh and at Université libre de Bruxelles. He has published numerous papers in leading academic journals. His columns and policy work are published and cited in leading international media and policy outlets. Guntram is fluent in German, English, French and has good notions of Bulgarian and Spanish.

  • Konstantinos Efstathiou

    Konstantinos, a Greek citizen, works in Bruegel as an Affiliate Fellow in the Macroeconomics and Governance area. Before joining Bruegel, Konstantinos was at the European Commission, as a Blue Book Trainee in the Cabinet of President Juncker. He also interned at the Central Bank of Luxembourg (BCL) as a research assistant, involved in projects related to the Wage Dynamics Network (WDN) research group.

    He holds a Master in International Economics and International Relations from the Johns Hopkins University School of Advanced International Studies (SAIS), where he specialized in Quantitative Methods and European Studies.

    Konstantinos’ research interests include macroeconomics, European economic governance and international economics.

    Konstantinos is a native speaker of Greek, speaks fluent English and has good knowledge of French.

    Declaration of interests 2017

    Declaration of interests 2018

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