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Economic governance

The European Union has introduced a set of rules that aim to detect, prevent, and correct problematic economic trends such as excessive government deficits or public debt levels, which can stunt growth and put economies at risk.

The EU's economic governance framework revolves around the European semester, its economic policy coordination system. This seeks to ensure that there are clearer rules, that national policies are better coordinated year-round, that there is regular monitoring and that sanctions are enforced when countries fail to comply with the rules.

Since the economic, financial and sovereign debt crises, the EU has beefed up its economic governance rules to reinforce its Stability and Growth Pact with:

  • the six-pack laws (a system to monitor broader economic policies so as to detect problems like property bubbles or falling competitiveness at an early stage - macroeconomic imbalance procedure)
  • the two-pack laws (euro area countries - other than those with macroeconomic adjustment programmes - must submit their draft budget plans by 15 October each year and the Commission issues an opinion by the end of November);
  • the Treaty on Stability, Coordination and Governance (Fiscal Compact).