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The European Semester – Reformed Governance of Europe 2020 Strategy

The monitoring of the strategy is integrated into the "European Semester", an annual cycle of economic and fiscal coordination. As a management tool the European Semester aims at strengthening the economic surveillance.

Whereas the political commitment of the Europe 2020 strategy was already enforced by focusing on the five EU-wide headline targets the economic policy coordination was also enhanced by introducing the European semester. Since the beginning of 2011, the Europe 2020 and Stability and Growth Pact reporting and evaluation are done simultaneously. The European semester aims at enhancing ex ante coordination of the economic and fiscal policies of the Member States and the EU by aligning the different strands of economic policy coordination.

The European Semester starts with the publication of the Annual Growth Survey. The spring meeting of the European Council continues by providing policy orientations covering fiscal, macroeconomic structural reform and growth enhancing areas and advises linkages between them. The Member States then submit information on the medium-term budgetary strategies in their Stability and Convergence Programmes and set out actions to be undertaken in their National Reform Programmes. After the assessment of both programmes, the country specific recommendations are issued by the Council (ECOFIN (Economic and Financial Affairs Council) in charge for those based on Article 121 Treaty on the Functioning of the European Union (TFEU) and EPSCO (Employment, Social Policy, Health and Consumer Affairs Council configuration) in charge for the employment recommendations based on Article 148 TFEU) and have to be incorporated in the formulation of national budgets for the coming year and provide ex ante guidance to Member States for configuring their employment and structural policies. The objective of this procedure is to early detect inconsistencies and emerging imbalances, so that countermeasures can be taken in time.

Where recommendations are not acted on within the given time-frame, policy warning can be issued. There is also an option for enforcement through incentives and sanctions in the case of excessive macroeconomic imbalances.

Despite the closer coordination of fiscal surveillance under the Stability and Growth Pact and the structural monitoring in the context of Europe 2020, the two processes remain two separate instruments.

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More on the Stability Programme

The cornerstone of the strengthened economic and budgetary coordination is the new set of rules on enhanced EU economic governance which entered into force on 13 December 2011.

Under the provisions of the preventive arm of the Stability and Growth Pact (SGP) euro-area Member States prepare annual Stability Programmes and other EU Member States prepare Convergence Programmes and submit them to the Commission and the Council annually in April. The aim is to ensure more rigorous budgetary discipline through surveillance and coordination of budgetary policies within the euro area and EU.

In May 2013 additional surveillance and monitoring procedures for euro area Member States were introduced. The "Two Pack Regulations" build on the above mentioned new set of rules ("6 Pack Regulations") and support adherence to the SGP’s existing fiscal surveillance framework.