Coordination of EU Member States’ Economic Policies and the Industrial Development Environment

In the absence of a clearly defined industrial policy in the EU, the coordination of economic policies provided for in the TFEU can be treated as a substitute for a policy addressing industry. The close relationship between the coordination of economic policies and industrial growth has been confirmed by the Europe 2020 Strategy, which is the basis for EU development priorities in the period 2010–2020. In this paper we verify to what extent this assumed interrelationship is true. In particular, the objectives of the paper are as follows: (a) to identify the legal framework and instruments for the coordination of economic policies at the EU level; (b) to assess the effectiveness of this coordination. The indicator adopted in this paper to assess the coordination record of economic policies is the European Commission’s assessment of each Member State’s implementation progress against the previous year’s Country Specific Recommendations. The assessment (with a one year lag) is worked out by the Commission and as a result Recommendations, prepared by the Commission and adopted by the Council, offer tailored advice to Member States on how to boost growth and jobs while maintaining sound public finances. They should be implemented by countries during the European Semester, which is the main vehicle for the coordination of national economic policies. The paper argues that coordination of national economic policies, albeit containing a number of weak points, has been a useful instrument in strengthening the alignment of policies of EU members with the Europe 2020 strategy, and thus supporting economic growth and industrial development environment.