Berlin, December 2021
Insights from the Country-Specific Recommendations of the European Semester Every year, in the context of the Spring Package of the European Semester, the Commission publishes country-specific recommendations (CSRs) for each EU Member States. These CSRs are aimed at providing advice to Member States on how to improve job creation, growth and investments while achieving or maintaining sound public finances and preventing macroeconomic imbalances. The given guidance is, in theory, realistically achievable in the next 12-18 month. The CSRs are based on the priorities set for the year as announced in the Annual Sustainable Growth Strategy, published in at the beginning of each Semester cycle. The CSRs were, until the introduction of the Recovery and Resilience Facility (RRF) in 2021, non-binding.
Comparisons over the years When comparing the country-specific recommendations given by the Commission and the Council in the context of the European Semester over the years, some striking observations can be made.
Less CSRs Since 2015, the European Semester has followed on more , particularly characterised by fewer in the objectives to the discretion of the Member States. The intention was to increase political ownership of Member States and national accountability, with the expectation to increase the implementation rate of recommendations. The reduction is due to (1) the new focus of the Semester: some areas are not covered in the Semester processes anymore, such as climate and energy; and (2) some policy areas were merged in one recommendation, thus not reducing the content of the CSRs but only their number.1 The following table depicts the number of CSRs for some Member States in 2012 and 2018. Table 1: number of CSRs for some EU Member States (2012 & 2018) Member State CSRs in 2012 Belgium 7 France 5 Germany 4 Austria 7 Finland 5 Italy 6 Denmark 3
CSRs in 2018 3 3 2 2 3 4 1
Low implementation rate Since the creation of the Semester, the annual implementation rate of CSRs has mainly faced a downward trend, with the only exception of 2017, where the rate slightly increased. The figure below shows the proportion of CSRs which have faced either full/substantial progress, some progress or no/limited progress every year. The decline of implementation rate for Member States facing excessive imbalances has been more substantial than other Member States since 2015, which coincides with the streamlining of the Semester.2 The intention of the Juncker Commission in 2015 to increase implementation rate due to higher national ownership was thus not achieved. The main areas of progress are the financial sector reforms and public 1
Economic Governance Support Unit (EGOV) (2020), Country-specific recommendations: An overview September 2020. 2 Efstathiou & Wolff (2018), Is the European Semester effective and useful?.
Berlin, December 2021 finances. Reforms of tax regimes have only faced little progress.3 In a study in 2018, The European Court of Auditors reported that only 53 percent of respondents considered the CSRs realistic, while 26 percent said .4 This is mainly due to the challenging timeframe for implementation, as many CSRs require more time than the Commission.
2012
2014
2013
6,4
9,2
11,6 29 46,1
46,1
44,6
44,7 59,4
2016
2015
2,3
4,2
51,6
2017
44,2
54,7
1,3
43
2018
1,1
38,7
36,6
Full/Substantial Progress
48,7
2019
2,8
60,6
50
60, 2
Some Progress
No/Limited Progress
Figure 1: CSRs implementation rate per year (2012-2019)
Similar or identical content The last striking observation that can be made when comparing CSRs over the years is the resemblant and sometimes identical wording used for guidance. For many Member States, it seems that some of the received recommendations do not change; they are sometimes only separated into different paragraphs. This logically flows from the fact that the implementation rate of CSRs is very low. Annex 1 depicts some of the similarities in CSRs for certain Member States over the years.
3
Economic Governance Support Unit (EGOV) (2020), Country-specific recommendations: An overview September 2020. 4 European Court of Auditors (2018), Audit of the Macroeconomic Imbalance Procedure (MIP).
Berlin, December 2021
Recommendations for potential reforms Both the low implementation rate and the repetition year after year of some of the CSRs lead to questions about the effectiveness of this tool: • • •
What can be done to increase the uptake of CSRs by Member States? What is the right balance between a stronger enforcement mechanism and more transparency in making policy reforms really happen? Does the cycle of giving yearly recommendations make sense in the face of long-term issues that need to be tackled through different yearly milestones?
We see two points where the CSRs could be improved to increase their implementation rate without changing their legal basis. First, the Commission should draft differentiated CSRs according to a clear timeline, separating between short-, medium- and long-term recommendations. Additionally, CSRs should be differentiated according to annual or multi-annual CSRs, while keeping the annual cycle of assessment. Therefore, the Commission should outline for each CSR the policy milestones and the expected timeframe for achieving them. Second, CSRs should be formulated in measurable and quantitative terms, where possible. The Commission should differentiate between hierarchies of recommendations that need to be fulfilled in priority. The Semester should keep recommendations endorsed until they are implemented by the concerned Member State. The status of the CSR could be displayed publicly by using the following categories: closedimplemented, open-not-implemented, reindorsed-until-implemented. To give more concrete and meaningful guidance, the recommendations could be linked to necessary actions. To follow the implementation of the CSRs, the Semester could introduce an action tracker, which could be inspired by the RRF milestones and targets mechanism.
Curious about our proposals to reform the European Semester? Find out more: At Climate & Company, we understand the unique potential of the European Semester for the climate and sustainability transition in the EU. With our project "Greening the European Semester", funded by the European Climate Foundation, we are exploring how the Semester can become a key tool for achieving the European Green Deal and the EU's sustainability goals. Stay up to date by visiting our project page and browsing our knowledge hub and its many valuable resources. For any questions or comments, get in touch with us:
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