The annual ESG Conference 2025

The European Semester (ES) is the cornerstone of the European Union's (EU) economic governance framework. It allows for integrated surveillance and coordination of Member States' economic, fiscal, employment and social policies across the EU within the framework of a common annual calendar. Through this process, EU Member States align their budgetary and economic policies with objectives and rules agreed upon at EU level. The Semester aims to ensure sustainable economic growth, macroeconomic stability and sound public finances across the EU. However, as new economic, social and geopolitical challenges emerge, it must be further adapted to remain an effective tool for broad coordination and adequately reinforced to better support economic resilience, sustainable growth and competitiveness.

A revised and stronger European Semester that drives sustainable growth and competitiveness

The European Semester has become a solid and well-established instrument for the EU’s economic governance and coordination with Member States and is in the process of being developed further. The entry into force of the revised EU economic governance framework, the already announced links between the Competitiveness Coordination Tool and the Semester, the initial proposal of possible links with the Semester on the future spending of the next Multi-annual Financial Framework (MFF), and at least part of the future Cohesion Fund, are all further signs of progress in this area. Like the cancellation of the 2025 Annual Sustainable Growth Strategy (ASGS) in December 2024, they all highlight the need for a thorough upgrade of this process.

In this regard, effective coordination between national and EU policies is essential for achieving the EU's strategic goals. To strengthen this aspect, the European Commission has announced a Competitiveness Coordination Tool to work alongside Member States on shared competitiveness priorities. This tool will function in conjunction with a streamlined European Semester focused on reforms and investments for enhancing competitiveness at national and EU level. This coordination will imply a strong link between EU priorities and the long-term budget. To this end, the discussion on the next MFF presents an opportunity to thoroughly rethink the structure and allocation of the EU budget to better support competitiveness priorities. A new European Competitiveness Fund has been announced to adequately address these needs by establishing an investment capacity that will support strategic technologies and manufacturing. Further, a key consideration for the next MFF is whether to adopt a performance-based approach, similar to the Recovery and Resilience Facility (RRF).

The role of the European Semester has become even more critical with the entry into force of the revised economic governance framework in April 2024. The new medium-term plans are at the centre of the new framework.  They integrate Member States' fiscal targets, priority reforms and investments, and measures to address any possible macroeconomic imbalances during the fiscal adjustment period, with a wider view to ensuring alignment with EU strategic objectives.

Moreover, the European Semester and EU's Economic Governance have also become essential to reinforce synergies between Cohesion Policy and other EU policies. Under the 2021–2027 framework, cohesion policy has encouraged the strengthening of the links between investments and reforms, and alignment with the European Semester. The European Commission is set to revise the EU's cohesion policy to further enhance EU competitiveness and support decarbonisation, defence and security.

Against this challenging and multifaceted background, the EESC calls on the Commission to urgently review the structure and timing of the Semester, with a view to ensuring future interconnections with the Competitiveness Coordination Tool, in the interests of transparency and to enable all actors involved (EU institutions, national governments, parliaments, local authorities, social partners and CSOs) to be ready to fully play their respective role in the European Semester process.

Strengthening the role of the Sustainable Development Goals (SDGs) in the European Semester

Since 2020, a key development in the European Semester has been the inclusion of the Sustainable Development Goals (SDGs). Each country report now includes a summary of the progress made by Member States towards achieving SDGs. This integration creates a valuable opportunity to prioritise people and the planet, putting them at the centre stage of economic policy. Since the 2024 European Semester Spring Package, the Commission is now providing policy guidance to Member States with the goal of building a robust and future-proof economy that secures competitiveness, resilience and long-term prosperity for all. This is being done while maintaining sound public finances in the face of a challenging geopolitical environment.

The EESC observes differences between the Member States in how the SDGs are integrated into the CSRs, and calls on the Commission and the Member States to increase systematic communication and awareness-raising around these objectives when investment and reform proposals are translated into concrete actions and measures. This increased public understanding of the SDGs would create significant opportunities to ensure a holistic approach to sustainable development. Most importantly, the EESC underlines the need to reform the European Semester in order to better steer and support the implementation of EU goals and targets set, for instance, in the European Green Deal, the EPSR and the UN Pact for the Future adopted in September 2024, and to boost the EU’s current low level of competitiveness. It also agrees that comprehensive objectives and clear and ambitious targets for the implementation of the SDGs would make it possible, in the context of the European Semester, to assess whether existing policies and investments are effective and leading to progress in the right direction or whether further reforms and investments are needed that the process can then recommend. Therefore, the EESC believes that there is a need to rethink the current gap analysis approach applied to the European Semester.

To this end, the EESC's European Semester Group is bringing together speakers from the EU institutions, organised civil society, the Member States and research institutes for its annual conference on "A stronger and more inclusive European Semester that works for all: Strengthening Europe's Economic Resilience, Sustainable growth and Competitiveness ", to be held from 9.30 a.m. to 1 p.m. on Tuesday 24 June 2025.

The event will be webstreamed (original, EN, FR and ES). No registration is needed and participation is free of charge.

Ask your questions to the panellists via Sli.do with the event code: #2025ESGConference 

Follow us on X:  @EESC_ECO #EUSemester#2025ESGConference