The Legal Strength of Council Recommendations Issued in the Procedures of EU Macroeconomic Coordination

Abstract

Most of the activity of European Union (EU) institutions in the area of macroeconomic coordination is done through recommendations issued by the Council, that are formally non-binding acts, where the EU advises Member States on economic and budgetary policies. Recent reforms of the Economic and Monetary Union led to an increase of the EU’s capacities regarding macroeconomic coordination, conferring to the Council and the Commission enhanced powers for supervising, monitoring and assessing the fiscal and economic situation of Member States. The reform also added reinforced sanctionatory mechanisms, establishing penalties for Member States that fail to comply with the rules, targets and EU acts in the area of economic governance. There seems then to be a normative tension or mismatch between the form and substance of the soft law acts of macroeconomic coordination and the hard law procedures to enforce them. The purpose of this paper is to analyze and discuss this tension, and to measure and understand to what extent are Council recommendations in this policy area binding upon EU Member States. This paper uses the conceptual tools provides by theories of soft law and empirical assessments on the compliance level with recommendations to answer its question.

Keywords: EU Economic Governance, Soft Law, CSRs, Excessive Deficit Procedure