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Economy and Finance

Timeline: The Evolution of EU Economic Governance

Economic governance in the EU has been reinforced and refined over time, evolving in the context of historical developments. This timeline includes links to legislation and background information.



Economic governance review

Commission presents review of EU economic governance and launches debate on its future.



Fiscal compact

The Commission adopts a Report assessing the compliance of the national provisions adopted by each of the 22 Member States bound by the Fiscal Compact (the euro area plus Bulgaria, Denmark and Romania).




The Commission adopts a package of measures to begin implementing the Five Presidents’ Report. It entails a revised approach to the European Semester, the introduction of national Competitiveness Boards and an advisory European Fiscal Board; a more unified representation of the euro area in international financial institutions, especially the IMF; and steps to complete the Banking Union, notably via a European Deposit Insurance Guarantee Scheme.



The Five Presidents’ Report “Completing Europe's Economic and Monetary Union”  sets out ambitious plans on how to deepen the Economic and Monetary Union in three stages and to complete it by 2025 at the latest. It proposes to complete four Unions, an Economic, Financial, Fiscal, and Political Union.



The Commission issues guidance on how it will apply the SGP rules to strengthen the link between structural reforms, investment and fiscal responsibility in support of jobs and growth.




A review of the Six-Pack and Two-Pack which was called for in the legislation, determined that the legislation had contributed to the progress of fiscal consolidation in the EU. The review highlighted some strengths as well as possible areas for improvement, such as improved transparency and simplicity.



The "two-pack" is passed

EU lawmakers approve legislation in which euro area Member States agree to prepare their budgets according to common standards and a common timeline, submitting drafts to the Commission and each other.
The two pack entered into force in May 2013.




The Four Presidents’ Report "Towards a Genuine Economic and Monetary Union" provides a roadmap for the completion of the Economic and Monetary Union. It focuses on completing, strengthening and implementing the enhanced economic governance, as well as on establishing a Banking Union for the euro area by adopting the Single Supervisory Mechanism, as well as new rules on bank recovery and resolution, and on deposit guarantees.


The Fiscal Compact is passed

Euro area Member States agree to make the goal of balanced budgets part of their national constitutions and future euro area members agree to do so once they adopt the common currency. The fiscal compact is part of a treaty known as the Treaty on Stability, Coordination and Governance, which entered into force in January 2013.

The TSCG also introduced Euro Summits, i.e. meetings of euro area leaders which take place at least twice a year.




With the future of the euro area in question, the monitoring, coordination and enforcement of economic governance moves up a gear. A collection of six new laws, known as the ‘six-pack’ is agreed by EU lawmakers in September 2011. The monitoring of both budgetary and economic policies is organised under the European Semester and further details on the implementation of the SGP’s rules are laid down in a ‘Code of Conduct’.


Macroeconomic imbalances in one country that could spillover and threaten others come under scrutiny and the Macroeconomic Imbalances Procedure is born. The Stability and Growth Pact becomes more comprehensive and easier to enforce. The Six-Pack entered into force in December 2011.



Kick-off first ‘European Semester’

The monitoring and coordination of fiscal and economic policies and the Commission’s policy recommendations are integrated and organised.


‘End of the one-size-fits all era’

EU lawmakers amend the ‘Stability and Growth Pact’ enabling it to better consider individual national circumstances.


ECJ rules on the Stability and Growth Pact

The European Court of Justice overturns the Council’s rejection of the Commission’s recommendations citing procedural issues but rules that responsibility for enforcing the Stability and Growth Pact lies with the Council.


‘Commission and Council go to court’

EU finance ministers reject the European Commission’s recommendation to initiate sanctions proceedings against France and Germany for flouting the Stability and Growth Pact’s rules. The Commission takes the Council to the European Court of Justice.


Stability and Growth Pact

Entry into force of SGP corrective arm.


Stability and Growth Pact

Entry into force of the SGP preventive arm


The ‘Stability and Growth Pact’ is born

EU Member States agree to strengthen the surveillance and coordination of national fiscal and economic policies to enforce the Maastricht rules.


EU Member States sign the Treaty of Maastricht

The Treaty of Maastricht introduces the euro as a common currency and limits government deficits and public debt levels to 3% and 60% of GDP respectively.