The European Commission has released a new review on the European Semester. Research of both David Bokhorst and Roel Beetsma has been used for this new review.
The European Semester is the framework for the coordination of socioeconomic and fiscal policies in the EU. With the European Semester the European Commission issues policy recommendations on budgetary issues, labour market issues, competitiveness issues, pensions, etc. The framework supports the European growth strategy and should ensure that Member States do not end up in crisis. But the Semester has come under significant criticism because of a perceived lack of effectiveness. In response to this criticism, the Commission published a long-awaited review of the framework to serve as a basis for the discussion on whether the Semester should be reformed.
In the analysis of the European Semester, the Commission does not only refer to the classical way of measuring effectiveness on the basis of statistical analysis of reformimplementation, but also presents effectiveness of the Semester in an alternative way. The alternative way of describing effectiveness draws on and references the insights of the dissertation of David Bokhorst, where it is argued that the Semester acts as an agenda-setting device that helps to mobilise political capital around reforms.
Another input that has been used for this report comes from the European Fiscal Board.
The European Fiscal Board (EFB) (https://ec.europa.eu/european-fiscal-board) is an independent advisory body of the European Commission. One of the four members is Roel Beetsma. Part of its mandate is its evaluation of how the Commission monitors the adherence of the European Union’s budgetary rules.
In 2019, the EFB wrote an advice to the then President of the European Commission, Jean-Claude Juncker, on the functioning of the budgetary rules, especially since the start of the Eurozone debt crisis and how the rules could potentially be simplified. It advised the introduction of a single budgetary target, the public debt ratio, underpinned by a ceiling on net (i.e. corrected for tax measures) primary expenditure growth linked to potential output growth, in combination of changes in the governance of the fiscal rule monitoring and a provision to relax the rules in the case of (certain) public investments.
Governments, parliaments and civil society have until the summer to respond to the review.