EU's ministers of finance endorsed changes in the Stability and Growth Pact, creating opportunity for the introduction of the so called European semester. The Semester is one of the first initiatives of the task-force, headed by European Council President Herman van Rompuy. If approved by EU leaders too, the semester will become operational as of January 1, 2011. The semester is in fact a monitoring on Member States' economic and budgetary policies and will be done every six months. Each March, based upon a report of the Commission, the European Council will identify the main challenges and will give strategic advice on policies.

The aim is discrepancies and imbalances to be identified. Taking this advice into account, the member states will in April review their med-term budgetary strategies and at the same time draw up national reform programmes setting out the action they will undertake in areas such as employment and social inclusion. In June and July, the European Council and the Council (Ecofin) will provide policy advice before the Member States finalise their budgets for the following year.

Earlier this year the proposal for a peer review of budgetary policies evoked sharp reactions from those countries which do not violate the Stability and Growth Pact and have sound fiscal discipline. The idea emerged, however, in the wake of the Greek crisis, caused precisely by loose fiscal policy.

Bulgaria approves the European semester because it means better coordination of economic policy on a European level. According to the Ministry of Finance though, it also means a large-scale budgetary reform in Bulgaria. Our country was represented at the Ecofin on Tuesday by the new deputy minister of finance Boryana Pencheva.

More on Tuesday's Ecofin later on euinside.