National reform programmes, stability and convergence programmes

After receiving EU-level guidance from the Autumn Package and European institutions, EU member states submit their national policy plans for assessment by the end of April.

By the end of April at the latest, EU member states submit the following documents to the European Commission (‘the Commission’) and the Council of the European Union (‘the Council’):

• National reform programme (prepared by all member states)
• Stability programme (prepared by euro area countries)
• Convergence programme (prepared by non euro area countries)

The European Semester serves as the framework to assess these national programmes.

National reform programme

The national reform programme outlines the structural economic reforms that the member state intends to implement, with a focus on future policies to strengthen employment and growth and prevent or correct macroeconomic imbalances. The programme should also indicate how the planned policies comply with the country-specific recommendations of previous European Semester cycles.

Stability programme

Under the preventive arm of the Stability and Growth Pact (SGP), EU member states are required to submit either a stability or a convergence programme, which reports on the national budgetary policy.

A stability programme outlines the budgetary objectives and strategy of a member state over the next three years. It specifically reports on how the country is progressing towards or meeting its medium-term budgetary objective (MTO). Achieving the MTO ensures a structural balance between government expenditures and revenues, contributing to the long-term sustainability of public finances. Sound public budgets are essential for price stability within the eurozone.

Convergence programme

Convergence programmes severe a similar purpose to stability programmes but apply to non-euro area member state. The programme outlines the medium-term budgetary objective, and how the MTO will be achieved. Compliance with the SGP rules are important requirements before a member state can join the euro area.

The national programmes (reform, stability or convergence) are developed by each respective member state. National governments are expected to consider the policy priorities outlined in the Annual Sustainable Growth Survey and the Council recommendation on the economic policy of the euro area, which are published in the preceding Autumn Package.

Additionally, before April, the Commission provides fiscal guidance to member states with the aim to facilitate coordination and preparation of the stability / convergence programmes. This guidance takes into account the global economic situation as well as the specific contexts of individual member states. Member states are expected to incorporate this guidance into their national plans.