The European Semester explained

What is the European Semester?

The European Semester is part of the European Union's economic governance framework. Through it, member states align their budgetary and economic policies with the rules agreed at EU level.

This process of socio-economic policy coordination takes place every year from November.

Key objectives of the European Semester

The European Semester aims to contribute to: 

• ensuring sound public finances, preventing excessive budgetary deficits and preventing or reducing government debt
• ensuring convergence and stability in the EU
• fostering economic growth
• preventing macroeconomic imbalances in the EU
• monitoring the implementation of national recovery and resilience plans
• coordinating and monitoring employment and social policies

• Economic governance framework
• Recovery plan

Legal basis of the European Semester

The legal basis for the European Semester process can be found in Articles 121 and 148 of the Treaty on the Functioning of the European Union (TFEU).

The coordination of national budgetary policies in the EU is further defined by the Stability and Growth Pact (SGP), whose aim is to ensure sound government finances which are necessary for price stability and for fostering strong, sustainable growth conducive to job creation.

The legislative acts of the so-called ‘two-pack’ and ‘six-pack’ legislation have strengthened the rules and application of the SGP.

More recently, the Union’s reviewed economic governance framework, in force since 30 April 2024, introduced changes to the preventive and the corrective arm of the Stability and Growth Pact.

What policies are coordinated during the European Semester?

The European Semester covers economic, social, employment, structural and budgetary policy coordination:

• budgetary policies, to ensure the sustainability of public finances in line with the SGP
• prevention and correction of macroeconomic imbalances
• structural reforms, focusing on promoting growth and employment
• structural reforms set out in the national recovery and resilience plans
• employment and social policies, in line with the principles of the European pillar of social rights

Why was the European Semester created?

The 2008 economic crisis revealed a need for stronger economic governance and better budgetary and social policy coordination between the EU member states.

Enhanced economic, social, employment, structural and budgetary policy coordination can help prevent disparities and ensure convergence and stability in the EU as a whole and in its member states.

The related policy coordination procedures that existed until 2010 were implemented independently of each other. Member states saw a need to synchronise the timetables of these procedures to streamline the process and to better align the goals of national policies while taking into account the objectives they had set at EU level. There was also a need to extend monitoring and coordination to cover broader policies.

For these reasons, and as part of a wider reform of EU governance, the European Council decided to establish the European Semester in 2010.

The first European Semester cycle took place in 2011.