Implementing economic reforms : are EU Member States responding to European Semester recommendations?; Issue 37: October 2014

For the past four years, the EU has issued country-specific recommendations for economic reform to its Member States under the European Semester. A synthetic indicator of EU-wide implementation of these recommendations shows a score of just over 40%. While this is higher than what some critics of the European Semester process have argued, a more stringent implementation record is necessary in the face of Europe's economic challenges. Looking at implementation over time, across groups of Member States and policy areas, this article also finds that implementation (i) was weaker for the 2013 vintage of recommendations than for the 2012 one; (ii) appears to vary with the electoral cycle in Member States; and (iii) is stronger in policy areas where market pressure requires an imminent policy response (banking sector reform) and/or where the recommendations are backed by EU rules with enforcement powers (public finances).