Blog post

Implementation of European Semester recommendations worsens further

Economic policy coordination in the EU hardly works: the initially modest implementation has worsened further.

Publishing date: 15 June 2016
Authors: Zsolt Darvas Alvaro Leandro

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 , similar to the work of . 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 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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About the authors

Zsolt Darvas

Zsolt Darvas is a Senior Fellow at Bruegel and a part-time Senior Research Fellow at the Corvinus University of Budapest. He joined Bruegel in 2008 as a Visiting Fellow, and became a Research Fellow in 2009 and a Senior Fellow in 2013.

From 2005 to 2008, he was the Research Advisor of the Argenta Financial Research Group in Budapest. Before that, he worked at the research unit of the Central Bank of Hungary (1994-2005) where he served as Deputy Head.

Zsolt holds a Ph.D. in Economics from Corvinus University of Budapest where he teaches courses in Econometrics but also at other institutions since 1994. His research interests include macroeconomics, international economics, central banking and time series analysis.
Alvaro Leandro

Álvaro Leandro Fernández-Gil, a Portuguese and Spanish citizen, worked at Bruegel as a Research Assistant from November 2014 until July 2016 in the area of Global and European Macroeconomics. Prior to this, Álvaro worked as a Research Assistant at “la Caixa” Research. He has also worked as an intern at the Sustainable Development Network of the World Bank. He holds an undergraduate degree in Economics from the University of Sussex, and a master in Specialised Economic Analysis from the Barcelona Graduate School of Economics (Universitat Pompeu Fabra).

The subject of his Master's thesis was the inter-connectivity in the financial system, and its consequences for systemic risk and regulation. At the University of Sussex he wrote a dissertation on Political Business Cycles.

Álvaro’s research interests include Macroeconomics, International Finance and Political Economy.

He is fluent in English, French, Portuguese and Spanish.

Theme: Macroeconomic policy and governance
Keyword: European semester and fiscal rules
Language: English