Institutional framework of the new economic governance in the European Union (European semester)

The subject of analysis in this paper is the institutional framework of the new economic governance in the European Union that has arisen as response of the member countries to the consequences of the global economic and financial crisis. In this sense, the author analyzed the provisions of the European semester, which is practically anticipated the creation of a fiscal union, more precisely, it is about the measures that should facilitate the centralization of fiscal policy through the Reform of the Stability and Growth Pact, the implementation of the reform Six-pack, in terms of tightening fiscal rules. Hereinafter, special attention is given to the provisions of the Fiscal Pact, which refers to the state budget and the structural constraints of the public debt. Within this document were adopted two additional: Euro Plus Pact and the Competitiveness Pact, which should help in maintaining the stability of the single currency and to simultaneously facilitate structural reform. European Semester represented the legal basis for the adoption of the Treaty on Stabilization, Coordination and Governance in the Economic and Monetary union, which further develops the idea of creating a fiscal union (trough the introduction of the so-called 'golden rule' on the state budget and impose strict sanctions by the European Court of Justice for their non-compliance). Notwithstanding the undoubted importance of new institutional mechanisms, there is a doubt that this institutional framework strengthens the discretionary power of the main EU member states and thus increases the risk of 'discrediting' of common institutions. Conditions for survival of the economic and monetary union is that management and decision-making back to the 'umbrella' of democratic processes and the competence of communitarian authorities. This paper seeks to answer the question why the new coordination mechanisms were not successful in resolving the crisis and provide specific recommendations de lege ferenda for creators of Serbian economic policy towards the European Union.