EUROPEAN SEMESTER P R O C E S S What is the European Semester? The European Semester is a cycle of economic and fiscal policy coordination within the EU. It is part of the 's economic governance framework. Its focus is on the 6- month period from the beginning of each year, hence its name - the 'semester'. During the European Semester the member states align their budgetary and economic policies with the objectives and rules agreed at the EU level. The roles are explained below.

European Commission Council of the EU EU governments

Each year, it undertakes a detailed Discusses, endorses and Any policy decisions in analysis of each country's plans for formally approves the response to the country- budget, macroeconomic and proposals of the specific recommendations structural reforms. Commission are made by the national government in question, On the basis of the detailed based on whatever action analysis, it then provides EU they deem appropriate governments with country-specific recommendations for the next 12-18 months. It also monitors EU countries' efforts towards the EU2020 targets.

Why was the European Semester created? The recent economic crisis demonstrated a need for better policy coordination between the EU member states. The rationale is that enhanced policy coordination can help prevent discrepancies and contribute to convergence and stability in the EU and member states. The economic policy coordination procedures that existed until 2010 were carried out independently of each other. The member states therefore saw the need to synchronize the timetables of these procedures in order to streamline the process and to better align the goals of national budgetary, growth and employment/social policies, while taking into account the objectives they have set at the EU level. For these reasons and as a part of a wider reform of the EU economic governance, the decided to establish the European Semester in 2010. The legal basis for the process is the so-called 'six-pack' - 6 legislative acts that reformed the Stability and Growth Pact. The first European Semester cycle took place in 2011.

Key objectives of the European Semester • contribute to ensuring convergence and stability in the EU • contribute to ensuring sound public finances • foster economic growth and sound social policies • prevent excessive macroeconomic imbalances in the EU • implement the strategy

What policies are coordinated during the European Semester? ✓ structural reforms, focusing on growth and employment in line with EU 2020 strategy ✓ fiscal policies to ensure sustainability of public finances (Stability and Growth Pact) ✓ social policies since 2018 when the EU Pillar of Social Rights was integrated in the process with monitoring and policy coordination based on social scoreboard

How does the European Semester work?

The Semester has a clear timetable, according to which the member states receive EU-level guidance and then submit their national reform programmes to be assessed at EU level. After the evaluation of these plans, the member states are given individual recommendations ('country-specific recommendations') for their national budgetary and reform policies. The member states are expected to take into account these recommendations when they define their budget for the following year and when they take decisions related to their economic, employment, education and other social policies. Preparatory phase: analysis of the situation and follow-up on the previous year November and December Commission issues an annual growth survey for the upcoming year presenting the Commission's view of EU policy priorities for the coming year. The member states are invited to take them into account when drawing up their economic policies for the coming year. 1st phase: policy guidance at the EU level January and February The Council of the EU debates the annual growth survey, sets out overall policy guidelines, adopts conclusions. The Semester has implications for a range of policies. the Council of the EU discusses it in its various configurations. The also discusses the annual growth survey and may publish its own initiative report. It issues an opinion on employment guidelines. March The Commission publishes country reports presenting the social and economic overview of the situation in each of the EU member states. The member states are invited to take into account the findings of the country reports when preparing their national reform programmes. The programmes outline member states' budgetary policies and policies for promoting growth and competitiveness. 2nd phase: country-specific objectives, policies and plans April The member states submit their national reform programmes outlining member states' structural reform plans, focused on promoting growth, employment and sound social policies. May The evaluates national policy plans and presents draft country- specific recommendations. June-July The Council of the EU discusses and adopts the country-specific recommendations. Member states are invited to implement them. 3rd phase: implementation July - end of the year During the remaining 6 months of the year, the member states take into account the recommendations when drawing up national budgets for the following year. The member states adopt their national budgets at the end of the year. The cycle starts again towards the end of the year, when the Commission gives an overview of the economic situation in its annual growth survey for the coming year. The Commission also looks into the progress achieved by each country in implementing the recommendations.