Economic Policy Coordination in the Euro Area under the European Semester

After three years of mixed operational experiences, the European Semester has been streamlined and further reform has recently been suggested by the European Commission. We outline the major modifications and evaluate to what extent this streamlining has affected the nature of the 2015 country-specific recommendations. Any mechanism for policy coordination depends crucially on the institutional framework that it is supposed to operate in. Consequently, proposals for further improvement of the European Semester must take the institutional environment into account. We therefore work out the compatibility of different aspects of policy coordination with respect to the existing EU architecture and discuss the proposals to modify this architecture put forward recently in the Five Presidents Report. On this basis, we develop proposals for improving the efficiency of the European Semester.