Economic and Monetary Union (EMU) implies close coordination of national economic policies, which have thus become a matter of common concern. In practical terms, the Council, acting by a qualified majority on a recommendation from the Commission, formulates draft guidelines that are sent to the European Council. In the light of the latter's conclusions, the Council, again acting by qualified majority, adopts a recommendation setting out the Broad Economic Policy Guidelines (BEPG) of the of the Member States and the Union and informs the European Parliament (Article 121 of the TFEU). These annual broad guidelines are the central element of coordination for the Union's economic policies.
In addition to these guidelines, the EC Treaty lays down other economic policy provisions in Title VIII of the TFEU, including:
- multilateral surveillance: the Member States, meeting within the Council, monitor economic developments and the application of the broad economic policy guidelines; they may issue recommendations to the government of a Member State which is failing to comply with the guidelines;
- the excessive-deficit procedure: the Member States must avoid excessive government deficits, and it is up to the Commission to ensure that this principle is complied with;
- financial assistance: when a Member State is experiencing severe difficulties, the Council is able, under certain conditions, to grant it financial assistance;
- prohibition against assuming the commitments of other Member States;
- prohibition of privileged access: it is prohibited to grant public bodies, authorities or undertakings privileged access to finance.