The European Semester: understanding an innovative governance model

Abstract

This chapter gives an overview of the European Semester (hereafter Semester). On the one hand, it maps out the history, elements and functioning of the Semester. On the other hand, it indicates how the Semester can be studied and understood. Apart from the legal aspects underpinning the coordination methods of the Semester, politics are relevant as well, as the Semester allows for exchanges between actors across governance levels. It makes the Semester a dynamic process with annually recurring governance processes and the ability to adapt both its content and procedures. Two key events may explain the design and implementation of the Semester in 2011. The first is the end of the Lisbon Strategy (2000–2010) and the ambition to make the subsequent Europe 2020 Strategy more successful.1 The second is the severe financial and economic crisis which started plaguing Europe in 2008. In the economic field, the Stability and Growth Pact rules should have kept Member States financially and economically healthy. However, in reality it had too little impact in terms of Member State compliance with the rules of maximum debt and expenditure. Therefore, EU leaders urged the strengthening of EU economic governance. This urgency was fed by the severity of the financial and economic crisis, which moreover demonstrated the interdependence of Member States. The financial instability of one country seemed to spill over easily to other countries. The idea behind stricter economic governance was increasing Member State compliance by strengthening already existing coordination cycles, and by implementing new coordination cycles. Additionally, all these coordination cycles, ranging from social to economic issues, have been placed within one framework: the European Semester. On the one hand, the Semester is nothing more than a period of about nine months in which all EU socio-economic coordination activities occur. It brings together existing EU socio-economic coordination cycles and builds on the rich knowledge the EU gained in decades of policy coordination. One example is the European Employment Strategy, which has been running since 1997. It is now part of the Europe 2020 Strategy. Also the Stability and Growth Pact has been running since 1997 and became part of the Semester in 2011. A third coordination mechanism is the newly created Macroeconomic Imbalances Procedure (MIP),3 which was implemented in 2011. On the other hand, we could see the Semester as a major step in EU governance.4 To understand why the Semester is an example of coordination innovation, but also to understand the pathway towards the implementation of the Semester, the next section describes the history of EU socio-economic coordination prior to the Semester.