Economic policy coordination in the EU - much is in motion
In 2011, the European Semester was implemented for the first time as a reaction to the crisis in the euro area at that time. The main focus was on public finances. Since then, the Semester has become a multi-layered process, in which Member States coordinate their budgetary, economic, employment, social and also environmental policies along rules agreed at EU level. The cycle begins with the autumn package, where, among other, the Annual Sustainable Growth Strategy, in which the Commission sets out its priorities for the coming year, and the Joint Employment Report are presented. After comprehensive coordination processes, the spring package contains the country reports and the country-specific recommendations to the Member States.
 

In the wake of the pandemic and the war, it was felt necessary to further strengthen coordination between the Member States. This led to the creation of the Recovery and Resilience Facility, which is implemented through European Semester and now occupies a large part of it. In addition, economic governance - especially fiscal rules - was reviewed, which was reflected in the EU Commission’s economic governance rules fit for the future in April. (More on this in the next newsletter.)

A thorough reform of the European Semester     
The European Economic and Social Committee (EESC) has been critically monitoring the European Semester for some time now; and quite rightly so, since it is a matter of important political decisions. In the course of drafting its latest opinion, social partners and civil society in the Member States were consulted and the results collected in a comprehensive Annex. Furthermore, studies and national debates were also taken into account.

In it, the EESC advocates a thorough reform overall, especially with regard to the promotion of democracy and transparency. This should be done in conjunction with the following objectives: Economic growth and quality employment, social cohesion and convergence between Member States, and accelerating the green and digital transformation. Existing indicator systems are to be reviewed, supplemented and harmonised. It is pointed out that the poor implementation of the country-specific recommendations is also due to an excessive focus on public finances and a comparatively poor integration of the European Pillar of Social Rights.

Insufficient involvement of parliaments, social partners and civil society
The EESC concludes that the Semester process does not satisfactorily involve citizens. The extent and quality of participation is insufficient in most Member States, despite some improvements. The EESC believes that “the involvement of social partners and civil society organisations (CSOs) must become one of the pillars of this revised Semester, as well as that of national parliaments and local and regional authorities.” In addition, the competences of the European Parliament (EP) should be increased to the level of being able to have more co-decision rights on economic policy guidelines and proposals of an European nature.

The EESC's proposals for the revision of the European Semester
The EESC also proposes that, among other, the social partners be involved through a structured formal consultation procedure. The characteristics of such permanent involvement in the different phases of the Semester are to be laid down in a European regulation. This is to cover timetables, structure of meetings, timely public access to documents and minutes, public communication of proposals, government responses and a roadmap for implementation of agreements. In addition to a permanent consultation mechanism, the best possible access to data and statistics is to be ensured. Furthermore, the country-specific recommendations are to cover a period of three years with annual evaluations. These EESC proposals can certainly be considered from the workers' perspective. However, utmost caution is required with regard to the idea of linking the implementation of the country-specific recommendations to the EU budget.

Further information:
EESC: The EESC’s recommendations for a solid reform of the European Semester
EESC: Annex to the own initiative opinion: The EESC´s recommendations for a solid reform of the European Semester
EU Commission: Commission proposes new economic governance rules fit for the future
AK EUROPA: Proposal to reform the European fiscal rules: better, but still not good