The Implementation of Strengthened Economic Policy Coordination in the EU

In recent years, the EU has substantially enhanced its economic governance. Within the European Semester, a more structured dialogue is established through which country-specific economic policy recommendations (CSRs) are directed at Member States and their implementation is assessed on a yearly basis. This is supposed to improve policy coordination and facilitate the attainment of the EU’s economic objectives. However, according to the Commission’s assessments the proportion of recommendations not satisfactorily implemented by member states has increased steadily from the 2012 to the 2015 CSRs. At the same time, differences exist for different member states and individual CSRs. Drawing on these assessments, this study explores factors contributing to the varied implementation record in its multilevel context. Hypotheses are generated based on existing research on the implementation of EU policies. Such studies have hypothesized country-level political, institutional, and economic effects, but also policy-specific factors such as enforceability and discretion as well as Commission preferences. To be sure, progress in CSR implementation as assessed by the Commission differs substantially from policy surveillance in hard law, as for the transposition of directives, most importantly because the latter is legally binding and thus can be enforced through the ECJ, whereas non-compliance with CSRs has only limited direct consequences and their enforcement relies primarily on peer pressure. Although such differences require careful consideration, the analysis of CSR implementation also promises to improve and broaden our understanding of EU policy implementation more generally and of how its reformed economic governance framework is applied in practice.