The 1992 Maastricht Treaty laid the foundation for coordination of the economic policies of the EU member states. The treaty sets out measures to establish an Economic and Monetary Union and a single currency. Under the treaty, countries are required to have annual budget deficits not exceeding 3% of gross domestic product (GDP), and government debt not exceeding 60% of GDP. The treaty also provides for supervision of these requirements.

The 1997 Stability and Growth Pact is a set of rules designed to ensure that countries in the European Union pursue sound public finances. It has a ‘preventive arm’ and a ‘corrective arm’. The preventive arm is aimed at public income and expenditure in the medium term, and the corrective arm focuses on annual maximum government deficits and national debt. Although the member states remain responsible for budgetary policy, they are bound by the rules of the Stability and Growth Pact (SGP).

Tightening of rules in 2011

The financial and economic crisis put the system under pressure. Consequently, the rules have been tightened up since 2011. The stricter rules were included in the 2011 and 2013 six-pack and two-pack schemes, which, with the exception of the rule on penalties, apply to all EU member states. Penalties can be imposed only on members of the euro area.

The six-pack scheme also marked the introduction of more stringent surveillance by means of the Macroeconomic Imbalance Procedure (MIP). The MIP is intended to promote, where necessary, structural reforms in such areas as employment, competitiveness and the housing market. It constituted an addition to the (one-sided) attention given to public finances.

At a national level, the Council of State, as the national budgetary authority, is responsible for monitoring compliance with European budget rules. This is provided for in the Stability Treaty signed by the EU member states in 2012.

More information:

European Semester

The preventive arm of the SGP and the MIP mechanism converge in the European Semester. Since 2011, the European Commission has used the European Semester to coordinate the member states’ economic, budgetary and employment policies. It also includes assessment of the national reform programmes, which the member states submit as part of the Europe 2020 strategy.

The European Semester culminates in the Council making country-specific recommendations. It takes place in the first half of the year so that the member states can take the recommendations into account when preparing their budgets in the second half of the year.

The European Commission presented the most recent new European Semester spring package on 4 June 2025. It considers the unstable security and trade position due, among other factors, to the Russian invasion of Ukraine.

The European Commission considers the European Semester to be a crucial part of the recovery strategy, which will draw on the Recovery and Resilience Facility (RRF), the central instrument of NextGenerationEU. 

The Commission’s proposals for country-specific recommendations for 2023 provide member states with guidelines for dealing with major economic and social challenges that are not, or not wholly, dealt with in the recovery and resilience plans.

The European Commission has also issued its annual assessment of macroeconomic vulnerabilities in the member states. According to the Commission, imbalances have been identified in 6 member states, including the Netherlands, while 1 member states (Romania) has excessive imbalances. In November 2025, the Commission started an in-depth review of macroeconomic imbalances in the Netherlands.
As for many years in the past, the vulnerabilities identified for the Netherlands continue to be the high levels of private debt and the large current account surplus.

More information: