The European Semester: aligning reforms, fiscal policy and investment priorities

The European Semester is the European Union’s economic governance framework. Its purpose is to coordinate Member States’ economic, fiscal and social policies so that they align with the Union’s objectives for stability, growth and employment, while also helping prevent divergences and avert economic imbalances. More specifically, it promotes fiscal responsibility by monitoring national budgets and public debt levels, advances structural reforms that strengthen competitiveness, innovation and labour market efficiency, and encourages investments that support sustainable growth and social cohesion across the EU. 

The European Semester follows an annual cycle, which starts each November with the European Commission’s “Autumn Package”.  Through it, Member States receive EU-level guidance and country-specific recommendations on their national budgetary and reform policies.

Nevertheless, the Semester faces ongoing challenges. Complexity and bureaucracy can limit transparency and public understanding. Implementation gaps by Member States persist and, during major crises, balancing fiscal prudence with growth needs becomes even more demanding. For this reason, the Semester continues to evolve, seeking greater effectiveness, stronger accountability and better adaptability. Yet criticalities remain.

Our recommendations

In today’s environment of geo-economic competition, rising protectionism and multiple security risks, the European Semester must focus on clarity of priorities and on the credibility of country-specific recommendations, especially those that remove barriers to growth. In other words, it should support Member States in shaping a predictable, business-friendly environment that boosts productivity and employment, with a view of a strong European economy capable of sustaining the European social model and safeguarding the Union’s resilience and international influence.

From the perspective of the EESC Employers’ Group, the priorities for the 2026 cycle should target the key drivers of growth: better regulatory quality and reduced administrative burdens; stronger investment and productive capacity; financing through deeper and more integrated financial markets; addressing labour and skills shortages that constrain growth; a green transition guided by the needs of the real economy; and the preservation of open and fair competition. Put simply, the Semester should act as a catalyst for competitiveness: fewer burdens, more investment and skills, and reforms that help businesses of every size grow and create quality jobs.

Finally, as regards “ownership”, employers and other social partners must participate meaningfully so that recommendations translate into workable policies and real implementation. The European Economic and Social Committee has criticised the Semester for the insufficient inclusion of social partners in national decision-making. The main concerns included inadequate consultation, an overemphasis on fiscal consolidation in the early years at the expense of investment in employment, education and healthcare, and the need for greater social balance and meaningful involvement of civil society in shaping and monitoring policies.

The bottom line is that, despite these challenges, the Semester’s role in aligning national choices with Union-level objectives remains vital to the Union’s cohesion and long-term prosperity. What is crucial is to strengthen its credibility through fewer and more targeted recommendations, a clear implementation timetable, and meaningful accountability for results.

By Kostis Moussouroulis, EESC Employers' Group member.