The European Semester of economic policy coordination Alexia Zammit - - PowerPoint PPT Presentation

The European Semester of economic policy coordination

Alexia Zammit European Semester Officer European Commission

Valletta, 3 February 2020

The European Semester The priorities for the upcoming cycle Future collaboration

• Failure to adapt to requirements of EMU
• Accumulation of unsustainable debt levels, both in public and private sector
• Excessive risk-taking in the banking sector
• Failing market discipline
• Member States delayed necessary structural reforms
• Inadequate governance framework
• Insufficient monitoring and enforcement tools to safeguard fiscal discipline
• No established sovereign-debt crisis resolution mechanism for euro-area Member States
• No integrated European supervisory and regulatory architecture for financial institutions
• No instruments available to address macroeconomic imbalances

The original design of the EMU was incomplete

• The European Semester is the EU’s annual integrated surveillance cycle for fiscal

and macro-economic policies.

• In the presence of cross-border spill-overs, economic policies are a matter of shared

concern.

• Since Maastricht, the EU has acquired a "coordinating competence", which extends to

economic, employment and social policies of the Member States.

• Specific procedures for dealing with fiscal policies (SGP) and macro-economic

imbalances (MIP) are integrated into a broader integrated surveillance framework.

• The EU’s power of enforcement varies by policy area.
• The European Semester is a problem-oriented policy coordination process.

The European Semester: rationale and basic points

Political and legal framework

The European Semester

Country-specific recommendations after analysis of challenges, national reform plans and progress towards the Europe 2020 strategy Stability and Growth Pact Preventive: Recommendations Corrective: Excessive deficit procedure Macroeconomic Imbalances Procedure regulation Preventive: Recommendations Corrective: Excessive imbalances procedure

Key policy areas

Public Finances and Taxation Financial Sector Labour Market Single Market and Sectoral Performance Education and Skills Social Inclusion Governance and Business Environment Productivity and Innovation Environmental Sustainability

The Annual Coordination Cycle

Annual Growth Survey Alert Mechanism Report Euro Area Recommendations Opinions on Draft Budgetary Plans Autumn Forecast Winter Interim Forecast Spring Forecast 15 October May/June November Draft Budgetary Plans (EA Member States only) April Country-specific recommendations Country Reports February Stability/convergence programmes National Reform Programmes

Adopted at EU level Submitted by Member States

Summer Interim Forecast

Involvement of other EU institutions and Member States

From the EU to the Member States

• Opinions on Draft Budgetary Plans (for EA MS)
• Decisions under the Stability and Growth Pact
• Country Reports/Enhanced surveillance

reports/Specific Monitoring Reports

• Assessment of the Stability/Convergence

Programmes

• Country-Specific Recommendations

From the Member States to the EU

• Reporting tables
• National Reform Programmes
• Stability or Convergence programmes
• Draft Budgetary Plans (for EA MS)

Between Commission and Member State

• Bilateral meetings with Member State

authorities

• Fact-finding missions to the Member States
• European Semester Officer discussions with

stakeholders

• In-depth country team sessions with national

experts

• Political Semester Missions to the Member

States In a multilateral setting

• Council Committee discussion (EFC, EPC,

EMCO and SPC)

• Council Discussions

The main Semester channels for dialogue and interaction

Formal written exchanges Formal and informal discussions

Semester as essential channel for internal dialogue and interaction

Within the European Commission, a country team exists for each Member State

• These teams are chaired by the Secretariat-

General

• The teams prepare the contributions for the

country reports

• DG ECFIN is pen-holder for the country reports
• The teams consist of all Directorates-General

that are interested (usually around 20)

• In each capital, there are 1-2 European

Semester Officers who report to the country teams

European Semester country teams

The Semester country teams have become an essential process for:

• Better understanding the specific conditions

and challenges in each Member State

• Thinking across organisational silos: all DGs

are a member of all country teams

Impact of the Semester teams

The European Semester The priorities for the upcoming cycle Future collaboration

The evolving nature of the European Semester

2019 2017

Integration of the Social Pillar

2018

Strengthened link with Cohesion Policy Enhanced focus on Investment Juncker Commission Virtuous triangle Link with Cohesion Policy

2014 2011

1st European Semester

A New Economic Narrative focussing on four broad and interrelated policy objectives…

• Environmental Sustainability
• Fairness and Equal Opportunities
• Productivity and Competitiveness
• Stability and Resilience

… and which integrates the UN’s Sustainable Development Goals in the Economic Governance Framework

“I will refocus the European Semester into an instrument that integrates the United Nations Sustainable Development Goals”

Integration of the Sustainable Development Goals

Integration of the Sustainable Development Goals

The 17 Goals and 167 targets to be achieved by 2030 are universal (all countries) and indivisible (interlinked)

Environmental sustainability in the Semester

‘Environmental sustainability’ is about how environment contributes to economic and social development, and the other way around. In the Semester, this could include:

• Economic development implications related to environmental problems
• Issues related to the performance of related network industries
• Employment and social impacts of environmental challenges and policies
• Efficiency gains in resource use (e.g. through circular economy); effects on import

dependency/vulnerability; impacts on productivity, competitiveness and trade

• Identification and, where possible, quantification of investment needs linked to tackling environmental

challenges

• Financing and budgetary constraints
• Internalisation of environmental costs through fiscal and/or other policies

Political Guidelines : The Green Deal (and its financing)

Social Considerations in the Semester (1)

Social Considerations in the Semester (2)

Political Guidelines: European Pillar of Social Rights Action Plan

The European Semester The priorities for the upcoming cycle Future collaboration

• Meetings
• Fact-finding mission (November)
• Presentation of Country Report (March)
• Request for written feedback
• Publication of Autumn Package (November)
• Publication of Country Report (February)
• Publication of Country-Specific Recommendations (May)

Current interaction

• Greater presence at MCESD for discussions pertaining to the European

Semester;

• Video-Conference links with country team members in Brussels to

discuss specific files;

• Study visit to Brussels on the European Semester;
• Channel my communication through MCESD secretariat;
• Anything else?

How can we improve things?

Thank you