EU economic and political coordination

The closest and most binding of the cooperative efforts within the EU is in the monetary policy sphere, where a common authority – the European Central Bank – sets the short-term interest rate, and decides the money supply. In other economic policy areas, cooperation happens to a varying extent, and is distinguished by different types of cooperation. Most of these areas of cooperation have gradually expanded and been strengthened over the past few decades, but the efforts at EU-level still primarily consist of exchange of information and experience, passing of recommendations to member states, and – to a lesser extent – initiatives that support or assist the Member States’ own efforts and projects.

In the overarching economic policy area, cooperation is characterized by the fact that the EU Treaty includes a number of legally binding directives, which establish several – very broad – frameworks for member states’ policies. Included in these directives are the excessive deficit procedure and the corresponding reference value of 3 pct. of GDP, in accordance with the Stability- and Growth- Pact. In addition to the Treaty, the integrated guidelines – which consist of the overarching economic policy guidelines (BEPG) and the employment guidelines – are the central elements in coordinating the overarching economic policy strategy in the EU, the Lisbon-strategy.

In addition, the cooperation includes tools that deepen the cooperation in individual policy areas. One example of this is when individual Member States present reports on their economic policy in the different policy areas. Furthermore, The European Council (DER) hosts a meeting each spring, whereat focus is placed on economic reforms, social cohesion, and sustainable development.