2011/2071(INI)

European semester for economic policy coordination

Procedure completed

2011/2071(INI) European semester for economic policy coordination
RoleCommitteeRapporteurShadows
Opinion AFCO TRZASKOWSKI Rafał (EPP)
Opinion BUDG SURJÁN László (EPP)
Opinion CULT TAKKULA Hannu (ALDE)
Lead ECON BERÈS Pervenche (S&D)
Opinion EMPL LUDVIGSSON Olle (S&D)
Opinion ENVI RIVELLINI Crescenzio (EPP)
Opinion FEMM CORNELISSEN Marije (Verts/ALE)
Opinion IMCO STIHLER Catherine (S&D)
Opinion ITRE
Opinion REGI THEURER Michael (ALDE)
Lead committee dossier: ECON/7/05534
Legal Basis RoP 048
Subjects
Links

Activites

  • 2011/12/21 Additional information
  • 2011/12/01 Text adopted by Parliament, single reading
    • T7-0542/2011 summary
    • Results of vote in Parliament
  • 2011/11/30 Debate in Parliament
  • 2011/11/17 Committee report tabled for plenary, single reading
  • 2011/11/17 Committee report tabled for plenary, single reading
  • 2011/11/14 Vote in committee, 1st reading/single reading
  • 2011/10/07 Deadline Amendments
  • 2011/07/12 Resolution/conclusions adopted by Council
  • #3105
  • 2011/07/12 Council Meeting
  • 2011/05/26 Committee draft report
  • 2011/05/12 Referral to associated committees announced in Parliament
  • 2011/05/12 Committee referral announced in Parliament, 1st reading/single reading
  • 2011/05/05 EP officialisation
  • 2011/01/12 Non-legislative basic document published
    • COM(2011)0011 summary
  • 2011/01/12 Date
  • 2011/01/12 Non-legislative basic document
    • COM(2011)0011 summary
    • DG Economic and Financial Affairs, REHN Olli

Documents

Votes

A7-0384/2011 - Pervenche Berès - Am 6

2011/01/12
Position Total ALDE ECR EFD GUE/NGL NI PPE S&D Verts/ALE correctional
For 115 3 0 9 29 20 7 3 44 0
Against 497 72 51 11 0 2 219 141 1 0
Abstain 9 0 0 2 2 0 0 5 0 0

A7-0384/2011 - Pervenche Berès - Considérant F

2011/01/12
Position Total ALDE ECR EFD GUE/NGL NI PPE S&D Verts/ALE correctional
For 608 74 50 23 29 21 216 150 45 0
Against 8 0 1 0 0 0 7 0 0 0
Abstain 3 0 0 0 2 1 0 0 0 0

A7-0384/2011 - Pervenche Berès - Résolution

2011/01/12
Position Total ALDE ECR EFD GUE/NGL NI PPE S&D Verts/ALE correctional
For 501 73 0 4 1 5 223 150 45 0
Against 106 0 48 18 24 16 0 0 0 0
Abstain 11 0 1 1 6 1 0 0 2 0
AmendmentsDossier
576 2011/2071(INI) European semester for economic policy coordination
2011/05/10 AFCO 1 amendments...
source: PE-473.806
2011/06/16 CULT 27 amendments...
source: PE-467.140
2011/06/21 EMPL 99 amendments...
source: PE-467.222
2011/06/22 BUDG 16 amendments...
source: PE-467.234
2011/06/23 REGI 57 amendments...
source: PE-467.224
2011/07/15 ECON 164 amendments...
source: PE-469.851
2011/07/22 IMCO 20 amendments...
source: PE-469.829
2011/08/31 AFCO 19 amendments...
source: PE-470.072
2011/10/10 ECON 173 amendments...
source: PE-473.879

History

(these mark the time of scraping, not the official date of the change)

2012-02-09
activities added
  • date
    2011-01-12
    docs
    • text
      • PURPOSE: setting annual priorities for European growth with a view to advancing the EU's comprehensive response to the crisis (Annual growth survey).

        BACKGROUND: the EU has taken decisive action to deal with the crisis: as a result, the deterioration of public finances and the increase in unemployment have been less marked than in other parts of the world. The EU's high levels of social protection cushioned the worst impact of the crisis but because of its weak productivity growth, recovery is slower in Europe. The consequences of the crisis are still making themselves felt:

        • the rise in unemployment is a central problem. On aggregate, 9.6% of the working population is unemployed. In some countries, youth unemployment can be as high as 40%. Around 80 million people are estimated to live below the poverty line in Europe;
        • by the end of 2012, eleven Member States are expected still to remain at output levels below those preceding the crisis;
        • EU gross government debt rose, on aggregate, to around 85% of GDP in the euro area and to 80% EU-wide. The budgetary impact of the crisis will compound the effect of demographic change, which will add a fiscal burden of some 4.5% of GDP in the long term;
        • the financial sector has not yet returned to normal conditions and there are situations of vulnerability to stress and dependency on state-support;
        • credit conditions are not yet back to normal and in a number of Member States household and corporate debts are still excessive;
        • price and cost competitiveness remain problematic.

        Medium term potential growth for Europe is projected to remain low and estimated at around 1.5% up to 2020 if no structural action is taken namely to resolve the labour productivity gap with our main competitors. To avoid stagnation, unsustainable debt trends, accumulated imbalances and ensure its competitiveness, Europe needs to accelerate the consolidation of its public finances, the reform of its financial sector and to frontload structural reforms now.

        In this context, the EU has also decided to change its economic governance. January 2011 launches the first European Semester of ex-ante policy co-ordination starting with this Annual Growth Survey which is anchored in the Europe 2020 strategy.

        This Annual Growth Survey brings together the different actions which are essential to strengthen the recovery in the short-term, to keep pace with our main competitors and prepare the EU to move towards its Europe 2020 objectives.

        CONTENT: given the urgency, the Commission has chosen to present 10 priority actions. It focuses on an integrated approach to recovery concentrating on key measures in the context of Europe 2020 and encompassing three main areas:

        • the need for rigorous fiscal consolidation for enhancing macroeconomic stability,
        • labour market reforms for higher employment, and
        • growth enhancing measures.

        This first Annual Growth Survey is designed to apply to the EU as a whole but will need to be tailored to the specific situation of each Member State.

        The ten actions put forward by the Commission are as follows:

        1) Implementing a rigorous fiscal consolidation: public expenditure must be put on a sustainable track as a pre-requisite for future growth. Annual adjustments of the structural budget balance in the order of 0.5% of GDP will be clearly insufficient to bring debt ratios close to the 60% requirement. Therefore, stronger consolidation is needed and should be implemented on the basis of the reinforced fiscal rules proposed by the Commission. All Member States should keep public expenditure growth firmly below the rate of medium term trend GDP growth, while prioritising sustainable growth friendly expenditure in areas such as research and innovation, education and energy. All Member States should demonstrate that their Stability or Convergence Programmes are based on prudent growth and revenue forecasts. Indirect taxes are more growth-friendly than direct taxes and broadening tax bases is preferable to increasing tax rates. 

        2) Correcting macro-economic imbalances: many Member States need to tackle their lack of competitiveness with greater urgency. Member States with large current account surpluses should identify and tackle the sources of persistently weak domestic demand (including further liberalisation of the service sector and improving conditions for investment).

        3) Ensuring stability of the financial sector: at EU level, the regulatory framework must be further reinforced, while the quality of supervision should be enhanced by the ESRB and European Supervisory Authorities, which have become operational at the beginning of 2011.  Bank restructuring must be accelerated to safeguard financial stability and underpin the provision of credit to the real economy.

        4) Making work more attractive: the participation rate of low income earners, young people and second earners is worryingly low. The most vulnerable face the risk of long term exclusion from employment. In response, training and job search should be tied more closely to benefits. Shifting taxes away from labour should be a priority for all Member States in order to stimulate demand for labour and create growth.

        5) Reforming pension systems: Member States that have not already done so should increase the retirement age and link it with life expectancy. They should: (i) reduce early retirement schemes as a priority, and use targeted incentives to employ older workers and promote lifelong learning; (ii) support the development of complementary private savings to enhance retirement incomes; (iii) avoid adopting measures related to their pension systems which undermine the long term sustainability and adequacy of their public finances.

        6) Getting the unemployed back to work: once the recovery has gained ground, unemployment benefits should be reviewed to ensure that they provide incentives to work, avoid benefit dependency and support adaptability to the business cycle. Member States should design benefits to reward return to work or incentives to go into self-employment for the unemployed.

        7) Balancing security and flexibility: in some Member States, employment protection legislation creates labour market rigidity, and prevents increased participation in the labour market. Such employment protection legislation should be reformed to reduce over-protection of workers with permanent contracts, and provide protection to those left outside or at the margins of the job market. At the same time, reducing early school leaving and improving educational achievements is essential to help young people to have access to the labour market.

        8) Tapping the potential of the single market: barriers to market entry and obstacles to entrepreneurship remain acute in the single market. Cross-border services only represent 5% of GDP, less than a third of trade in goods and only 7% of consumers buy on-line because of the numerous restrictions which prevent the development of cross-border on-line sales. All the Member States should i) fully implement the Services Directive and ii) remove unjustified restrictions on professional services such as quotas and closed shops, together with restrictions on the retail industry. Tax treatment disadvantaging cross-border trade or investment should be eliminated.

        9) Attracting private capital to finance growth: innovative solutions are required to mobilise urgently a greater share of private EU and foreign savings. The Commission will make proposals: (i) for EU project bonds to help bring public and private financing together for priority investments and (ii) to enable venture capital funds established in one Member State to operate freely anywhere in the EU and to eliminate remaining tax obstacles to cross-border activities.

        10) Creating cost-effective access to energy: Member States should rapidly: (i) implement the third internal market energy package in full, (ii) step up their energy efficiency policies. This will lead to significant savings and create jobs in the construction and services sectors. The Commission is developing EU-wide standards for energy efficient products to help the expansion of markets for innovative products and technologies.

        The Commission proposes that these form the basis of an agreement by the European Council that Member States should commit to the implementation of these 10 actions. The proposals set out in this Communication would already enable the next meeting of the European Council to take concrete steps to maintain and accelerate the momentum of efforts to frontload and raise growth, and agree on the timetable for implementing the comprehensive response to the crisis. For the latter, the European Council has already agreed on two benchmarks: for finalising work on the permanent European Stability Mechanism (ESM) by March and the legislative package to enhance economic governance in the EU by June.

      title
      COM(2011)0011
      type
      Non-legislative basic document published
      celexid
      CELEX:52011DC0011:EN
    body
    type
    Non-legislative basic document published
  • body
    EP
    date
    2011-01-12
    type
    Date
  • date
    2011-01-12
    docs
    • text
      • PURPOSE: setting annual priorities for European growth with a view to advancing the EU's comprehensive response to the crisis (Annual growth survey).

        BACKGROUND: the EU has taken decisive action to deal with the crisis: as a result, the deterioration of public finances and the increase in unemployment have been less marked than in other parts of the world. The EU's high levels of social protection cushioned the worst impact of the crisis but because of its weak productivity growth, recovery is slower in Europe. The consequences of the crisis are still making themselves felt:

        • the rise in unemployment is a central problem. On aggregate, 9.6% of the working population is unemployed. In some countries, youth unemployment can be as high as 40%. Around 80 million people are estimated to live below the poverty line in Europe;
        • by the end of 2012, eleven Member States are expected still to remain at output levels below those preceding the crisis;
        • EU gross government debt rose, on aggregate, to around 85% of GDP in the euro area and to 80% EU-wide. The budgetary impact of the crisis will compound the effect of demographic change, which will add a fiscal burden of some 4.5% of GDP in the long term;
        • the financial sector has not yet returned to normal conditions and there are situations of vulnerability to stress and dependency on state-support;
        • credit conditions are not yet back to normal and in a number of Member States household and corporate debts are still excessive;
        • price and cost competitiveness remain problematic.

        Medium term potential growth for Europe is projected to remain low and estimated at around 1.5% up to 2020 if no structural action is taken namely to resolve the labour productivity gap with our main competitors. To avoid stagnation, unsustainable debt trends, accumulated imbalances and ensure its competitiveness, Europe needs to accelerate the consolidation of its public finances, the reform of its financial sector and to frontload structural reforms now.

        In this context, the EU has also decided to change its economic governance. January 2011 launches the first European Semester of ex-ante policy co-ordination starting with this Annual Growth Survey which is anchored in the Europe 2020 strategy.

        This Annual Growth Survey brings together the different actions which are essential to strengthen the recovery in the short-term, to keep pace with our main competitors and prepare the EU to move towards its Europe 2020 objectives.

        CONTENT: given the urgency, the Commission has chosen to present 10 priority actions. It focuses on an integrated approach to recovery concentrating on key measures in the context of Europe 2020 and encompassing three main areas:

        • the need for rigorous fiscal consolidation for enhancing macroeconomic stability,
        • labour market reforms for higher employment, and
        • growth enhancing measures.

        This first Annual Growth Survey is designed to apply to the EU as a whole but will need to be tailored to the specific situation of each Member State.

        The ten actions put forward by the Commission are as follows:

        1) Implementing a rigorous fiscal consolidation: public expenditure must be put on a sustainable track as a pre-requisite for future growth. Annual adjustments of the structural budget balance in the order of 0.5% of GDP will be clearly insufficient to bring debt ratios close to the 60% requirement. Therefore, stronger consolidation is needed and should be implemented on the basis of the reinforced fiscal rules proposed by the Commission. All Member States should keep public expenditure growth firmly below the rate of medium term trend GDP growth, while prioritising sustainable growth friendly expenditure in areas such as research and innovation, education and energy. All Member States should demonstrate that their Stability or Convergence Programmes are based on prudent growth and revenue forecasts. Indirect taxes are more growth-friendly than direct taxes and broadening tax bases is preferable to increasing tax rates. 

        2) Correcting macro-economic imbalances: many Member States need to tackle their lack of competitiveness with greater urgency. Member States with large current account surpluses should identify and tackle the sources of persistently weak domestic demand (including further liberalisation of the service sector and improving conditions for investment).

        3) Ensuring stability of the financial sector: at EU level, the regulatory framework must be further reinforced, while the quality of supervision should be enhanced by the ESRB and European Supervisory Authorities, which have become operational at the beginning of 2011.  Bank restructuring must be accelerated to safeguard financial stability and underpin the provision of credit to the real economy.

        4) Making work more attractive: the participation rate of low income earners, young people and second earners is worryingly low. The most vulnerable face the risk of long term exclusion from employment. In response, training and job search should be tied more closely to benefits. Shifting taxes away from labour should be a priority for all Member States in order to stimulate demand for labour and create growth.

        5) Reforming pension systems: Member States that have not already done so should increase the retirement age and link it with life expectancy. They should: (i) reduce early retirement schemes as a priority, and use targeted incentives to employ older workers and promote lifelong learning; (ii) support the development of complementary private savings to enhance retirement incomes; (iii) avoid adopting measures related to their pension systems which undermine the long term sustainability and adequacy of their public finances.

        6) Getting the unemployed back to work: once the recovery has gained ground, unemployment benefits should be reviewed to ensure that they provide incentives to work, avoid benefit dependency and support adaptability to the business cycle. Member States should design benefits to reward return to work or incentives to go into self-employment for the unemployed.

        7) Balancing security and flexibility: in some Member States, employment protection legislation creates labour market rigidity, and prevents increased participation in the labour market. Such employment protection legislation should be reformed to reduce over-protection of workers with permanent contracts, and provide protection to those left outside or at the margins of the job market. At the same time, reducing early school leaving and improving educational achievements is essential to help young people to have access to the labour market.

        8) Tapping the potential of the single market: barriers to market entry and obstacles to entrepreneurship remain acute in the single market. Cross-border services only represent 5% of GDP, less than a third of trade in goods and only 7% of consumers buy on-line because of the numerous restrictions which prevent the development of cross-border on-line sales. All the Member States should i) fully implement the Services Directive and ii) remove unjustified restrictions on professional services such as quotas and closed shops, together with restrictions on the retail industry. Tax treatment disadvantaging cross-border trade or investment should be eliminated.

        9) Attracting private capital to finance growth: innovative solutions are required to mobilise urgently a greater share of private EU and foreign savings. The Commission will make proposals: (i) for EU project bonds to help bring public and private financing together for priority investments and (ii) to enable venture capital funds established in one Member State to operate freely anywhere in the EU and to eliminate remaining tax obstacles to cross-border activities.

        10) Creating cost-effective access to energy: Member States should rapidly: (i) implement the third internal market energy package in full, (ii) step up their energy efficiency policies. This will lead to significant savings and create jobs in the construction and services sectors. The Commission is developing EU-wide standards for energy efficient products to help the expansion of markets for innovative products and technologies.

        The Commission proposes that these form the basis of an agreement by the European Council that Member States should commit to the implementation of these 10 actions. The proposals set out in this Communication would already enable the next meeting of the European Council to take concrete steps to maintain and accelerate the momentum of efforts to frontload and raise growth, and agree on the timetable for implementing the comprehensive response to the crisis. For the latter, the European Council has already agreed on two benchmarks: for finalising work on the permanent European Stability Mechanism (ESM) by March and the legislative package to enhance economic governance in the EU by June.

      title
      COM(2011)0011
      type
      Non-legislative basic document
      celexid
      CELEX:52011DC0011:EN
    body
    EC
    commission
    • DG
      Economic and Financial Affairs
      Commissioner
      REHN Olli
    type
    Non-legislative basic document
  • body
    EP
    date
    2011-05-05
    type
    EP officialisation
  • date
    2011-05-12
    body
    type
    Referral to associated committees announced in Parliament
  • date
    2011-05-12
    body
    EP
    type
    Committee referral announced in Parliament, 1st reading/single reading
    committees
  • date
    2011-05-26
    docs
    • url
      http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE466.955
      type
      Committee draft report
      title
      PE466.955
    body
    EP
    type
    Committee draft report
  • date
    2011-07-12
    text
    • The Council adopted:

      • a recommendation on the implementation of the broad guidelines for the economic policies of the Member States whose currency is the euro;
      • for each Member State, a recommendation on its 2011 national reform programme and including an opinion on the 2011 update of its stability or convergence programme.

      The Council thus concluded the European Semester, which is being implemented this year for the first time as part of a broader reform of the EU's economic governance. The European Semester involves simultaneous monitoring of the Member States' economic, employment and budgetary policies, in accordance with common rules, during a six-month period every year.

      The national reform programmes enable multilateral surveillance of the Member States' economic and employment policies, identifying growth-enhancing measures and setting national targets under the "Europe 2020" strategy for jobs and growth.

      The stability and convergence programmes are aimed at ensuring sound government finances, in accordance with the EU's stability and growth pact, as a means of strengthening the conditions for price stability and for sustainable growth.

    body
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    Resolution/conclusions adopted by Council
  • date
    2011-07-12
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    Economic and Financial Affairs ECOFIN
    meeting_id
    3105
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    2011-10-07
    type
    Deadline Amendments
  • date
    2011-11-14
    text
    • The Committee on Economic and Monetary Affairs adopted
      an own-initiative report by Pervenche Berès (S&D, FR) on
      the European Semester for Economic Policy Coordination. The report
      follows on from the Commission’s communication entitled
      “Annual Growth Survey: advancing the EU's comprehensive
      response to the crisis”.
      Members consider that the current stage of the crisis
      calls for strong and ambitious answers. They consider that, until
      further notice, the European Semester is the valid framework for
      the implementation of the EU strategy and for effective economic
      government. They are convinced that the introduction of the
      European Semester and the enhanced coordination of economic and
      budgetary policies should leave enough scope and flexibility to the
      EU Member States to pursue an effective budgetary, economic and
      social strategy, appropriate in accordance with the EU 2020
      strategy, geared to distribution and development and providing an
      adequate level of public services and infrastructure for EU
      citizens.
      The report reiterates that Member States should regard
      their economic and fiscal policies as a matter of common
      concern and that the economic pillar of Economic and Monetary
      Union, including its fiscal dimension, must therefore be
      strengthened through more coordination in the introduction and
      implementation of fiscal measures as well as an effective fight
      against tax fraud and tax evasion and the phasing-out of existing
      detrimental measures;
      (1) Role of the Commission: Members note that the European Semester has been
      established to ensure sustained convergence of the economic and
      fiscal performance of the Member States, achieve closer
      coordination of economies and overcome the sovereign debt crisis
      and that the Annual Growth Survey (AGS) has been established as the
      initial basic document of the cycle.
      Lessons from the first cycle: the report notes that the quality of National Reform
      Programmes under the first European Semester varies greatly
      regarding concreteness, transparency, feasibility and
      comprehensiveness. It calls on the Commission to:

      invite Member States to upgrade the quality and
      transparency of their contribution and to elevate the National
      Reform Programmes of best quality to the standard format for future
      European Semesters;
      ensure that the national policies and targets
      announced in the National Reform Programmes together add up to a
      level that is sufficiently ambitious to reach the EU 2020 headline
      targets.

      Annual Growth Survey: Members consider that the AGS should be in line
      with: i) the EU 2020 strategy, ii) the integrated guidelines (broad
      economic policy guidelines and employment guidelines), and iii)
      specific Council agreements regarding the euro area or the Union as
      a whole such as the Euro Plus Pact.
      The report calls on the Commission to reflect better
      the comprehensive multidimensional (smart, sustainable and
      inclusive) approach of the EU2020 strategy in the benchmarks used
      to assess the progress made by Member States and to issue
      country-specific recommendations accordingly. It requests that the
      AGS be transformed into ‘Annual Sustainable Growth
      Guidelines’ (AS2G), focusing on enhancing sustainable
      growth.
      It calls on the Commission to:

      when drawing up the Annual Sustainable Growth
      Guidelines, to draw upon a wide range of scientific expertise to
      the greatest extent possible and to take relevant recommendations
      of the European Parliament, Member States and local and regional
      governments into account;
      assess clearly, in the Annual Sustainable Growth
      Guidelines, the main economic and fiscal problems of the EU and
      individual Member States, to propose priority measures to overcome
      those problems;
      identify the initiatives taken by the Union and the
      Member States to support enhanced competitiveness and long-term
      investment, to remove obstacles to sustainable growth, to achieve
      the targets laid down in the Treaties and the current EU 2020
      strategy, to implement the seven flagship initiatives and to reduce
      macroeconomic imbalances;
      ensure that policy guidance for fiscal consolidation
      and structural reforms is consistent with the EU 2020 strategy for
      growth and jobs.

      Country-specific
      recommendations:
      the Commission is invited to:

      ensure greater comparability of the National Reform
      Programmes (NRPs) and establish common benchmarks to assess the
      Programmes;
      present its recommendations to the European Parliament
      at an appropriate time, once the analysis of the NRPs and SCPs
      (Stability and Convergence Programmes) has been completed, and to
      highlight the potential cross-border spill-over effects especially
      within the eurozone;
      organise a hearing with the aim of providing
      information on the yearly monitoring events announced in the
      various flagship initiatives;
      step up the role of the macroeconomic dialogue so as
      to improve the interaction among those responsible for wage
      development, economic, fiscal and monetary policy.

      Members call on the Council to come to Parliament in
      July to explain any significant changes it has made to the
      Commission’s proposed country-specific
      recommendations.
      (2) Role of the European Parliament: Members recall that the parliamentary debate on
      economic policy guidelines is the cornerstone of any democratic
      system. They consider that Parliament has to become a fully fledged
      partner in the macroeconomic dialogue.
      Expressing their concern regarding the democratic
      legitimacy of the introduction of the European Semester, Members
      take the view that the European Parliament should be recognised
      as the appropriate European democratic forum to provide an
      overall evaluation at the end of the European Semester. They want
      Parliament to organise each year, from 2013, prior to the Spring
      European Council each year, an interparliamentary forum at the
      European Parliament for members of the competent national
      parliamentary committees.
      The report notes that the crisis and the developments
      especially inside the euro area call for an upgrading of the
      European dimension of the economic policies of its Member States,
      especially within the eurozone. In this context, Parliament would
      need to adapt its structure and working methods to the
      latest developments within the Council and the Commission on the
      eurozone structure. Members warn against the establishment of any
      practice that lacks parliamentary approval at the European or
      national level and underline the need for country-specific
      recommendations to be based on democratic procedures. Highlighting
      the need for upgrading the parliamentary dimension in parallel
      to the Council one, Members ask that: i) the Parliament votes
      before the Spring Council on the Annual Sustainable Growth
      Guidelines with amendments proposals to be submitted to the
      European Council; ii) the Annual Sustainable Growth Guidelines to
      be subject to a codecision procedure that should be introduced by
      the next Treaty change.
      (3) Role of the Council:
      Members call on the European Council to invite the President
      of the European Parliament to participate in its meetings on the
      European Semester. They call on the Council and the Commission to
      report to it with an exact overview of actions and measures in the
      first few weeks of each year on the developments and successes of
      the previous European Semester.
      Member States are invited to provide information which
      is as detailed as possible on the measures and instruments provided
      for in the national reform programmes to attain the national
      objectives set, including the deadline for implementation, the
      expected effects, the potential spill-over effects, the risks of
      unsuccessful implementation, the costs and, if applicable, the use
      of EU Structural Funds.
      The report invites the Council to strengthen the
      macroeconomic dialogue, in particular by establishing
      corresponding macro-dialogues at national level, and considers it
      to be of major importance to include in the constant dialogue
      between European Institutions the involvement of the European
      Central Bank.
      (4) Sectoral contributions to the European
      Semester: Members consider that, in
      the context of the European Semester, Member States should be
      encouraged to attach special importance to specific issues,
      such as facilitating young people’s access to education,
      guidance and training and preventing early school-leaving,
      promoting lifelong learning, promoting employment and reducing
      unemployment, especially among young people, promoting integration
      of older people into the labour market, combating undeclared work,
      facilitating reconciliation of work and family life and improving
      childcare facilities.
      The Council and the Commission are invited to assess
      comprehensively whether the measures proposed in national
      programmes to combat poverty and social exclusion and to
      increase employment levels are in line with the Europe 2020
      objectives. They call on Member States which have not set national
      targets, or which have not sufficiently committed themselves to
      achieving the employment rate in Europe for women and men of 75% by
      2020, to undertake to pursue this objective.
      Members declare their readiness to engage in a regular
      policy dialogue and exchange of views with national
      parliaments and other relevant stakeholders, including the social
      partners, business sector and NGOs, on the employment and social
      aspects of Europe 2020 and the European Semester.
      Lastly, deploring the cut in public spending and
      investment in the field of education observed in many national
      budgets, Members re-emphasise the need to prioritise public
      investment in sustainable growth-friendly areas such as R&D
      and education.
    body
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    Vote in committee, 1st reading/single reading
  • date
    2011-11-17
    docs
    • url
      http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A7-2011-0384&language=EN
      type
      Committee report tabled for plenary, single reading
      title
      A7-0384/2011
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    type
    Committee report tabled for plenary, single reading
  • date
    2011-11-17
    docs
    • url
      http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A7-2011-0384&language=EN
      type
      Committee report tabled for plenary, single reading
      title
      A7-0384/2011
    body
    EP
    type
    Committee report tabled for plenary, single reading
  • date
    2011-11-30
    body
    EP
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    Debate in Parliament
  • date
    2011-12-01
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    body
    EP
    type
    Text adopted by Parliament, single reading
  • date
    2011-12-21
    text
    • The financial crisis and the more recent turmoil in sovereign debt markets have clearly highlighted challenges in the European Union's economic governance. There is a need for a stronger economic governance and coordination at EU level.

      The European semester is one of the first key initiatives to emerge from a Task Force on economic governance set up at the request of the European Council in March 2010 and chaired by the President of the European Council, Herman Van Rompuy.

      It is a six-month cycle of economic policy coordination which covers all 27 EU Member States. It relates to a procedure for the ex ante assessment of Member States' structural reforms, budget plans, and macroeconomic imbalances. The main innovation introduced by the European Semester is that the enforcement of economic policy coordination is now being extended right through to the budgetary process of all the Member States.

      The tools of the European semester are firmly rooted in the jointly agreed Europe 2020 Strategy and in the Stability and Growth Pact.

      HISTORY:

      1997: meeting in Amsterdam, the European Council agreed on a Stability and Growth Pact (SGP). This framework of rules was designed to ensure budgetary discipline after the creation of the euro and a new exchange rate mechanism. It was set up to provide stability both for the euro and the national currencies of countries that had not yet entered the euro zone. The SGP was underpinned by Council Regulation 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (preventive arm), Council Regulation 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure (dissuasive arm), as well as a European Council resolution. Council Regulation 1466/97 provided both for stability programmes (for euro-zone members) and convergence programmes (for Member States outside the euro area) that the Member States were to submit annually to the Commission.

      The criteria to be respected by Member States were the following:

      • an annual budget deficit no higher than 3% of GDP (this includes the sum of all public budgets, including municipalities, regions, etc.)
      • a national debt lower than 60% of GDP or approaching that value.

      1999: 1 January 1999 saw the beginning of the third stage of EMU, when the euro became a fully-fledged currency and a single monetary policy was introduced under the authority of the European Central Bank. Several pieces of legislation were adopted to pave the way for this third stage of EMU.

      2005: the European Council of March 2005 agreed that Council Regulations 1466/97 and 1467/97 should be amended to strengthen and clarify the implementation of the SGP and Regulations 2005/1055 and 2005/1056 were subsequently adopted in June 2005. The two original criteria were maintained but other aspects were introduced, including the long-term sustainability of public finances in the assessment of the stability and convergence programmes.

      March 2010: one of the earliest Task Force recommendations to reinforce policy coordination, the so-called "European semester", was agreed.

      May and June 2010: the Commission presented two communications on economic governance: a communication on Reinforcing economic policy coordination (May 2010) and a communication on enhancing economic policy coordination for stability, growth and jobs - Tools for stronger EU economic governance (June 2010). It proposes a set of tools to effectively strengthen the preventive and the corrective arms of the Stability and Growth Pact, extend surveillance to macro-economic imbalances and enforce effectively economic surveillance through appropriate sanctions and incentives.

      The establishment of a "European Semester" from January 2011 would become the cornerstone of economic policy coordination. The series of proposals, based on Articles 121 and 136 of the Treaty on the Functioning of the European Union (TFEU), aimed to improve the EU's economic governance.

      The establishment of the European Semester that would provide a European input to national policy decisions, leading to more effective ex-ante policy coordination was at the core of these proposals. The European Semester would also apply to the structural reforms and the growth enhancing elements of the Europe 2020 strategy.

      Following the European Commission's proposals and the EU political agreement of 7 September (Ecofin), the Commission would already table its amendment proposal for the relevant Regulation 1466/97 on 29 September.

      September 2010: the Commission presented the EU economic governance "Six-Pack" consisting of five Regulations and one Directive. These proposals represented the most comprehensive reinforcement of economic governance in the EU and the euro area since the launch of the Economic Monetary Union almost 20 years ago. The legislative package already brought a concrete and decisive step towards ensuring fiscal discipline, helping to stabilise the EU economy and preventing a new crisis in the EU.

      12 January 2011: the Commission adopted the first Annual Growth Survey, marking the start of a new cycle of economic governance in the EU and the first European semester of ex-ante and integrated policy coordination, which is anchored in the Europe 2020 strategy.

      March 2011: the Euro+ Pact was concluded in late March by the 17 euro zone countries, with the participation of six of the remaining ten Member States (Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania) with the purpose of further improving the fiscal strength and competitiveness of Member States. The European Council invited the Member States participating in the Euro Plus Pact to present their commitments in time to be included in their Stability or Convergence Programmes and their National Reform Programmes.

      25 March 2011: adoption of European Council Decision 2011/199/EU amending Article 136 of the Treaty on the Functioning of the European Union (TFEU) with regard to a stability mechanism for Member States whose currency is the euro.

      September 2011: adoption of the "Six Pack" based on a compromise reached between Parliament and the Council.

      CONTENT: the European semester was a first step in a raft of reforms that will substantially change the face of European economic policy. Given the interdependent nature of Member States' economies, and in particular in the Euro area, ex-ante coordination in the Council is the essential element of the European semester.

      The first cycle of the European semester commenced in 2011 and will run for the period between January and July of each year.

      The European Semester cycle is as follows:

      • In January, the Commission publishes the Annual Growth Survey. This report is then discussed in the various Council formations and in the European Parliament ahead of the European Council's Spring meeting.
      • At the Spring Council, Member States - essentially on the basis of the Annual Growth Survey - would identify the main challenges facing the EU and give strategic advice on policies.
      • Taking this guidance into account, the Member States will present and discuss their medium-term budgetary strategies through Stability and Convergence Programmes and, at the same time, draw up National Reform Programmes setting out the action they will undertake in areas such as employment, research, innovation, energy or social inclusion. These two documents would be then sent in April to the European Commission for assessment.
      • Based on the Commission's assessment, the Council would issue country-specific guidance by June and July and possible country-specific guidance to countries whose policies and budgets are out of line (for instance, if their plans are not realistic in terms of macroeconomic assumptions or if they do not address the main challenges in terms of fiscal consolidation, competitiveness, imbalances, etc).
      • Each July, the European Council and the Council of Ministers would provide policy advice before Member States finalise their draft budgets for the following year. Draft budgets would then be sent by Governments to the national Parliaments, which would continue to fully exercise their right to decide on budget.

      Annual Growth Survey (AGS): in January 2011, the Commission published its 2011 Annual Growth Survey as the first step in the first European Semester exercise which changes the way governments shape their economic and fiscal policies.

      This Annual Growth Survey brings together the different actions which are essential to strengthen the recovery in the short-term, to keep pace with the EU's main competitors and prepare the EU to move towards its Europe 2020 objectives. The Commission will continue its work on a broad range of other policy areas, including trade and a host of internal policies.

      Given the urgency of the situation, the Commission chose to present 10 priority actions that can be grouped under three main areas:

      (1) Fundamental Prerequisites for Growth:

      • Implementing a rigorous fiscal consolidation.
      • Correcting macroeconomic imbalances.
      • Ensuring stability of the financial sector.

      (2) Mobilising Labour Markets, Creating Job Opportunities:

      • Making work more attractive.
      • Reforming pension systems.
      • Getting the unemployed back to work.
      • Balancing security and flexibility.

      (3) Frontloading Growth:

      • Tapping the potential of the Single Market.
      • Attracting private capital to finance growth.
      • Creating cost-effective access to energy.

      The Commission proposed that these actions should form the basis of an agreement by the European Council whereby Member States would commit to their implementation.

      National Reform Programmes: based on the guidance of the European Council, Member States presented their national commitments in their medium term budgetary strategies under the Stability or Convergence Programmes and set out in their National Reform Programmes the measures needed to reflect this comprehensive response to the crisis anchored in the Europe 2020 Strategy.

      In early June 2011, the Commission adopted a series of country-specific recommendations for each of the 27 EU Member States, as well as one for the euro zone as a whole, to help Member States gear up their economic and social policies to deliver on growth, jobs and public finances. These had the purpose of helping each country to focus on strategic levers in the next 12 to 18 months, and thus boost EU economy as a whole.

      To formulate these recommendations, the Commission based itself on the analysis of national programmes - stability or convergence and national reform programmes - submitted by the Member States. An evaluation of progress made at EU level would be included in the following year's Annual Growth Survey. The Commission will examine the progress made by each Member State in its next set of country-specific recommendations to be issued in June 2012.

      POSITION AND IMPACT OF THE PARLIAMENT: Parliament's Committee on Economic and Monetary Affairs appointed Pervenche Berès (S&D, FR) to draft its own-initiative procedure on the 2011 Annual Growth Survey.

      In a resolution adopted on 1 December 2011, Parliament expresses its concern regarding the lack of democratic legitimacy of the introduction of the European Semester. It considers that Parliament should be recognised as the appropriate European democratic forum to provide an overall evaluation at the end of the European Semester and therefore should organise, from 2013, prior to the Spring European Council each year, an interparliamentary forum at the European Parliament for members of the competent national parliamentary committees. It also takes the view that its President should participate in the European Council's meetings on the European Semester.

      Parliament invites the Commission to reflect better the comprehensive multidimensional (smart, sustainable and inclusive) approach of the EU2020 strategy in the benchmarks used to assess the progress made by Member States and to issue country-specific recommendations accordingly. It also calls for the AGS be transformed into 'Annual Sustainable Growth Guidelines' (AS2G), focusing on enhancing sustainable growth and subject to the codecision procedure. Country-specific recommendation should also be based on democratic procedures.

      Although Parliament considers the European Semester to be the valid framework for the implementation of the EU strategy and for effective economic government, it expresses disappointment with the quality of Member States' National Reform Programmes and calls for these to be improved in the next cycle. It also asks the Commission to ensure that the national policies and targets announced in the National Reform Programmes together add up to a level that is sufficiently ambitious to reach the EU 2020 headline targets.

      Lessons learned from the first European Semester: 2011 was the first year of the European Semester. The European Parliament raised some concerns in particular as regards the divergences between the national reform programmes in terms of correctness, transparency and feasibility. Member States are urged to improve the quality of their reports. Parliament also calls on the Commission to ensure that that the programmes are sufficient to reach the EU2020 headline targets which was apparently not the case in the first European Semester.

      NEXT STEPS

      2012 European Semester exercise: the 2012 exercise began with the publication by the Commission of the 2012 Annual Growth Survey (AGS) on 23 November 2011. The key message of the 2012 AGS is that, faced with a deteriorating economic and social situation, more efforts are needed to put Europe back on track and sustain growth and jobs.

      The AGS calls for the EU and Member States to focus on five priorities:

      • pursuing differentiated, growth-friendly fiscal consolidation;
      • restoring normal lending to the economy;
      • promoting growth and competitiveness;
      • tackling unemployment and the social consequences of the crisis;
      • modernising public administration.

      In the coming weeks and months, the different Council formations will discuss the AGS and report to the March European Council so that it can adopt appropriate policy guidance for the Member States. This guidance should be incorporated into Member States' National Reform Programmes (regarding economic reforms) and Stability or Convergence Programmes (regarding public finances) presented in April/May. Having analysed these programmes, the Commission will issue its Country-Specific Recommendations in time for these to be endorsed by the June 2012 European Council. The Member States should then incorporate this policy guidance in their national economic and budgetary decisions.

      In November 2011, the Commission also presented a new proposal on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area. This proposal sets out provision for enhanced monitoring of budgetary policies in the euro area by:

      • complementing the European semester with a common budgetary timeline,
      • complementing the multilateral surveillance system of budgetary policies with additional monitoring requirements in order to ensure that Union policy recommendations in the budgetary area are appropriately integrated in the national budgetary preparations; and
      • complementing the procedure for correction of a Member State 's excessive deficit by a closer monitoring of budgetary policies of Member States subject to an excessive deficit procedure in order to secure a timely durable correction of excessive deficits.
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European semester for economic policy coordination
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© European Union, 2011 – Source: European Parliament