Measuring Economic Reform Recommendations under the European Semester: ‘One Size Fits All’ or Tailoring to Member States?

Abstract

In 2010 the European Semester was created to better coordinate fiscal and economic policies within Europe’s Economic and Monetary Union. The Semester aims to tackle economic imbalances by giving European Union (EU) member states country-specific recommendations (CSRs) regarding their public budgets as well as their wider economic and social policies with a view to enabling better policy coordination among Euro Area member states. In this article we develop a method to assess the way in which the CSRs have been addressing coordination and offer a systematic analysis of the way they have been formulated. We offer a way to code CSRs as well as one to analyse progress evaluations. Furthermore, we seek to use our results to address one of the reoccurring questions in the literature: whether the EU is pursuing a ‘one size fits all’ approach to economic policy making in the Euro Area? The findings indicate that different types of market economies and welfare states – different ‘varieties of capitalism’ – among the Euro Area members obtain different recommendations regarding different policy areas