| Author (Corporate) | European Parliament: European Parliamentary Research Service |
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| Publisher | EU |
| Series Title | In-Depth Analysis |
| Series Details | November 2017 |
| Publication Date | November 2017 |
| ISBN | 978-92-846-1697-8 |
| Content Type | Report |
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Background The European Semester - Countries in the European Union, particularly those that share the euro, coordinate their economic and fiscal policies to ensure their alignment with common objectives and responsibilities. The European Semester provides a framework for the coordination of economic policies across the European Union. It allows EU countries to discuss their economic and budget plans and monitor progress at specific times throughout the year. The autumn package kicks off the European Semester cycle. In the Annual Growth Survey, the Commission sets out general economic priorities for the EU and provides EU countries with policy guidance for the following year. The Commission also provides specific policy recommendations to euro area Member States based on the overall economic situation and common priorities. Moreover, the Commission assesses draft budgetary plans to ensure that euro area countries respect the EU’s economic and fiscal governance rules and coordinate their economic policy. In the Alert mechanism report, it also identifies countries for which it should undertake in-depth reviews to assess whether they that may experience imbalances which could prove harmful to the economy if not corrected.The European Parliamentary Research Service of the European Parliament published two separate reports in their In-Depth Analysis series in November 2017 called How to further strengthen the European Semester?. (1): The economic governance of the European Monetary Union is organised on an annual basis during the so-called European Semester. The improvement of the European Semester is an on-going process, and some recent propositions must be positively acknowledged. Still, the European Semester and Country Specific recommendations don’t focus enough on issues with clear spill-overs on other countries. This Briefing Paper argues for a systematic discussion of a nominal stance at the European level, based on wage and price analysis. It would monitor price and wage developments to avoid nominal and current account divergences or deflationary convergence. Seven suggestions are provided to improve the European Semester and European Economic Governance. External author: X. Ragot (2): The emphasis of the European Semester should shift from economic policy coordination – intended as the process through which Member States commit to common rules and recommendations adopted by the Council of the European Union under the surveillance of the European Commission – to a stronger national ownership. Coordination of national policies may be essential at times of crisis, when cross-country spillover effects tend to be large, but it may not be very effective when economic conditions return to normal, as spillovers tend to be small and the incentives for governments to coordinate lessen. Stronger national ownership should lead to better enforcement of commonly agreed rules, regardless of economic conditions and should take away the perception that rules are hierarchically imposed. National ownership could be improved by involving the national fiscal councils and the national productivity boards explicitly in the elaboration of EU? recommendations for national governments. This should be done without increasing the complexity of an already complicated EU governance system of governance or damaging their reputation as independent bodies. Reforms aiming to improve the structural functioning of the EU’s economies are of critical importance for Member States, yet the reasons why specific reforms should be embedded in the Semester are not always clear. Moreover, strengthening the Semester by further linking the EU budget to reforms undertaken in the Member States is fine in theory but very difficult in practice. Reforms cannot be ‘bought’ as such and it would be extremely difficult to measure the implementation of the CSRs precisely enough to make implementation a condition for funds. The role of the European Commission should remain predominant in fostering coordination in case of economic crisis and in providing technical support for reforms whenever needed. External authors: C.Alcidi, D.Gros. |
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| Source Link | Link to Main Source http://dx.publications.europa.eu/10.2861/258393 |
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| Subject Categories | Economic and Financial Affairs |
| Countries / Regions | Europe |
