1. Visnja Samardzija and Ivana Skazlic
The European Union and North America: An Inevitable Partnership? ECSA-C 11th Biennial Conference
Comparing the Economic Governance in the New EU Member States - Is the European Semester a Success or Failure?
Visnja Samardzija and Ivana Skazlic
Institute for Development and International Relations IRMO, Zagreb, Croatia

2. The paper is resulting from the project “Policy Observatory in Croatia (POLO-Cro28)”, IRMO, Zagreb
Funded by the European Commission through the ERASMUS + programme, Jean Monnet Support to Institutions ( )

3. The reasons behind the European Semester
the EU’s annual cycle of policy guidance, coordination and monitoring, as a response to the crisis
created to support implementation of the Europe Strategy and to ensure compliance with economic and fiscal rules in the context of the Stability and Growth Pact (SGP) and the Macroeconomic Imbalance Procedure (MIP)
in operation since 2011 – legal basis Art. 121 of the TFEU + specific provisions of the ‘Six pack’ legislation

4. The European Semester at a glance
The European Semester introduces ex-ante coordination of national economic policies during a 6-month period every year
The Commission conducts in-depth analysis of economic programs and structural reforms of every MS, issues CSRs and monitors their implementation on annual basis
Participation in the European Semester is mandatory for all EU MS!
During a remaining 6-month period of a ‘National Semester’ the MS implement the commonly agreed policies

5. Three components of the European Semester
EUROPE 2020 STRATEGY
(thematic surveillance)
STABILITY AND GROWTH PACT
(fiscal surveillance)
MACROECONOMIC IMBALANCE PROCEDURE
(macroeconomic surveillance)
Education
Employment
Environmental and climate protection, energy efficiency
R&D
Fighting poverty and social exclusion
Preventive arm
Deficit <3% GDP
Debt <60%
Debt >60% which is decreasing
Corrective arm
Excessive Deficit Procedure
Preventive arm
1. Alert Mechanism Report
2. In-Depth Reviews
Corrective arm
Excessive Imbalance Procedure
Source: European Commission, 'Six pack' and 'Two pack' Regulative

6. The European Semester for Economic Policy Coordination: Main steps and actors
Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul.
Opinion on DBPs
Presentation of AGS, AMR and EA recommendations
In-depth review of imbalances
Assessment of implementation of CSRs
European Commission
Assessment of NRPs and SCPs
Draft CSRs
Council Eurogroup
Surveillance and implementation f CSRs
Assessment of DBPs
Conclusions on AGS and AMR and adoption of EA recommendations
Adoption of CSRs
European Council
Policy guidance based on AGS and AMR
Endorsement of CSRs
Member States National Parliaments
Implementation of CSRs
Submission of DBPs by Oct
Submission of NRPs and SCPs
Article 13 conference
EPW / Article 13 Conference
European Parliament
Debate /resolution on Semester and CSRs
Debate /resolution(s) on the AGS
Economic dialogues with other EU Institutions and member states
Source: Hagelstam, K. (2015) At a glance The European Semester: Main steps at the EU level. Economic Governance Support Unit, European Parliament

7. Number of CSRs under the SGP, MIP and Europe 2020 processes, in 2015
Source: Bénassy-Quéré , A. (2015) Economic policy coordination in the euro area under the European Semester. Available at:

8. Implementation of country-specific recommendations (CSRs) by EU Member States, 2015
2015: Source: Hradiský, A. (2016) At a glance Implementation of the 2015 Country Specific Recommendations. Economic Governance Support Unit, European Parliament

9. Implementation of country-specific recommendations (CSRs) by EU Member States, 2012–2014
Source: Gern, K.-J., Jannsen N., Kooths, S. (2015) Economic policy coordination in the euro area under the European Semester. Kiel Institute for the World Economy. Available at:

10. Addressing the weaknesses of implementation: Streamlined European Semester (2015)
Improving frameworks and mechanisms
publishing CSRs for the euro area at the begining of the cycle;
lowering the number and scope of CSRs; focus on priorities
greater emphasis on employment and social performance;
enhancing a democratic dialogue
supporting reforms from ESI Funds and technical assistance

11. Examples of five new EU Member States
Croatia, Czech Republic, Hungary – non Eurozone members
Slovakia, Slovenia – Eurozone members
New EU members, 5th and 6th enlargement
Similar economic and social challenges, geographical proximity
Covered by or passed through Excessive Deficit Procedure

12. The government deficit as proportion of GDP in selected EU Member States(in %)
Source: Eurostat data

13. General government gross debt as proportion of GDP in selected EU Member States (%)
Source: Eurostat data

14. Excessive Deficit Procedure (EDP) in selected EU Member States – an overview
EU MS
2009
2010
2011
2012
2013
2014
2015
2016
Czech Republic
EDP opened
EDP closed
Hungary
EDP opened in 2004
Slovakia
Slovenia
EDP still ongoing
Croatia
NOTE: In 2016 the EDP covers 9 countries. The EDP was closed for 17 countries in the past years, while 2 countries are not covered by EDP at all.
Source: European Commission

15. Excessive imbalances procedure
The status of selected new EU Member States under the Macroeconomic Imbalances Procedure of (MIP)
Year
No imbalances
Imbalances*
Excessive
imbalances*
Excessive imbalances procedure
2012
Czech Republic
Slovakia
Hungary
Slovenia -
2013
2014
Croatia
2015
2016  -
NOTE: In 2016, out of 18 countries identified for in-debt review, 12 countries experience imbalances. EIP has not been initiated yet
Source:

16. Comparative overview of CSRs under European Semester in five selected countries (2015)
Country-specific recommendations 2015
EU Member State
Public finances and welfare systems
Financial sector
Labor market
Product and services market
Education
Social inclusion
Administration
Public finances
Taxation
Pension system
Healthcare system
Banking and access to finance
Housing and private debt
Labor taxation
Wage-setting
Services and network industries
Innovation and business environment
Education and skills
Poverty and social inclusion
Administrative modernization and rule of law
Croatia
Czech Republic
Hungary
Slovakia
Slovenia
Shaded cells in the table mark the field for which the selected Member State received recommendations.
Source: European Commission,

17. Full/Substantial Progress
Implementation of the 2015 CSRs under the European Semester in five selected Member States
EU/Country level
Full/Substantial Progress
Some Progress
No/Limited Progress
Not yet Assessed
Total
Total CSR to EU-28 4 42 49 7
106 
Czech Republic 3 1 -
Croatia 5 6
Hungary
Slovenia 2
Slovakia
Source: Hradisky, Martin (2016). European Parliament. Economic Governance Unit. At a Glance. Implementation of the 2015 County Specific Recommendations. March 4, 2016

18. Conclusions
Accomplishment of the European Semester: contribution to predictability and transparency of economic policies in the EU
CSRs - the most important part for delivering reforms, but implementation is modest / low
Eurozone members - stronger CSRs implementation
Better implementation while under a financial assistance program; due to market pressure and/or due to high unemployment
Normalisation of situation often „softens” reforms
Political will of national authorities to implement reforms depends on eventual domestic consequences
Implementation of CSRs varies with the electoral cycle

19. Conclusions Impact of recent modifications of the European Semester?
Support for facilitating implementation of reforms through EU Funds and technical assistance
Existing shortcomings are strong argument for further improvements of the European Semester in order to increase efficiency
Need to identify more clearly articulated priorities at European level, raise awareness