European Commission
Europe 2020

The European Semester explained

The monitoring of the strategy is integrated into the "European semester", an annual cycle of economic and fiscal policy coordination.

The six month cycle of the European semester starts in January, when the Commission presents its' Annual Growth Survey including a review and a forecast, integrating macroeconomic, thematic and fiscal surveillance.

The Spring meeting of the European Council – based on the annual growth survey, takes stock of:

• the overall macroeconomic situation
• progress towards the five EU-level targets
• progress under the flagship initiatives

It provides policy orientations covering fiscal, macroeconomic structural reform and growth enhancing areas, and advises on linkages between them.

The Member States then present their medium-term budgetary strategies in their Stability and Convergence Programmes and set out actions to be undertaken (in areas such as employment, research, innovation, energy or social inclusion) in their National Reform Programmes. In April these two documents are sent to the Commission for assessment.

Based on the Commission's assessment, the Council issues country-specific guidance to Member States in June/July. This means that policy advice is given to Member States before they start to finalise their draft budgets for the following year.

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

Ministerial meetings on specific policy issues are crucial for peer review and monitoring progress towards EU headline targets, and for advancing Europe 2020 flagship initiatives.

In order to implement the required policies and ensure wide ownership, close cooperation will be maintained with the European Parliament and other EU advisory bodies (Committee of Regions and European Economic and Social Committee) with the full involvement of national parliaments, social partners, regions and other stakeholders.

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What is monitored?

The EU monitors progress on 3 fronts:

• macro-economic factors are assessed by checking:
  • Is the macroeconomic environment stable and conducive to growth and job creation?
  • Are policies in place to address macroeconomic imbalances, macro-financial vulnerabilities and competitiveness issues with a macro-economic dimension?
  • Are there spill-over effects (either positive or negative) from national economies, particularly in the eurozone?
• growth-enhancing reforms
  • How are structural reforms promoting R&D and innovation, resource-efficiency, a healthy business environment, employment, education and social inclusion?
  • What progress is being made towards the 5 EU-wide headline targets and related national targets?
• public finances (stronger fiscal surveillance under the Stability and Growth Pact)
  • What is being done to reduce government debt and budget deficits (fiscal consolidation) in the interests of sustainable public finances?
  • What are the fiscal constraints on government policies to promote growth? (Identifying these constraints will enable the EU to provide consistent policy advice.)

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