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Macro Coordination under the European Semester


  • Walpurga Köhler-Töglhofer

    () (Oesterreichische Nationalbank, Economic Analysis Division)


To reinforce ex ante coordination of EU Member States’ economic and fiscal policies, a new monitoring cycle has been introduced: the “European semester” – a six-month period every year during which national budgetary and structural policies will be reviewed to detect any inconsistences and emerging imbalances while major budgetary decisions are still under preparation. Technically, the European semester brings together various procedures for economic policy coordination, based primarily on Article 121 (and to lesser degrees on Articles 126, 136 and 148) of the Treaty on the Functioning of the European Union. Specifically, the reform reinforces the preventive arm of the Stability and Growth Pact, introduces a new procedure for addressing macroeconomic imbalances, and places greater emphasis on monitoring the national fiscal frameworks, identifying macrostructural growth bottlenecks and detecting macrofinancial risks in the Member States. National fiscal and economic policies will be monitored in a coordinated and integrated manner rather than separately, and national policies will be aligned with integrated guidelines. The new approach is also intended to facilitate joint discussion of important economic policy priorities at EU level, thereby ensuring complementarity of national economic policy plans through policy guidance before Member States finalize their budgets for the following year. The results of such discussions and the definition of economic and fiscal policy priorities will then be effectively reflected in national policymaking, particularly in national budgets and structural reforms. The European semester thus follows an integrative approach that moves toward comprehensive, country-specific economic surveillance, in some cases with the possibility of imposing corresponding sanctions, which is in marked contrast to the “open method of coordination” used under the Lisbon agenda. Upon implementation of the “six-pack” of economic governance rules in January 2012, the already stringent monitoring requirements will be tightened even further.

Suggested Citation

  • Walpurga Köhler-Töglhofer, 2011. "Macro Coordination under the European Semester," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 59-73.
  • Handle: RePEc:onb:oenbmp:y:2011:i:4:b:3

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    References listed on IDEAS

    1. Zsolt Darvas, 2011. "Debt Restructuring in the Euro Area: a Necessary but Manageable Evil?," Working Papers 1104, Department of Mathematical Economics and Economic Analysis, Corvinus University of Budapest.
    2. Fritz Breuss, 2011. "EU-Wirtschaftsregierung: Eine notwendige aber nicht hinreichende Bedingung für das Überleben der Eurozone und des Euro," FIW Policy Brief series 012, FIW.
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    More about this item


    European semester; EU economic governance reform; macro coordination;

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • H1 - Public Economics - - Structure and Scope of Government


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