EU2020 from failure to action

The heads of state or government reminded themselves of the comprehensive Europe 2020 growth strategy. In the European Council 1-2 March 2012 conclusions (EUCO 4/12, available in 23 languages) they assessed their own work to date:

3. However, efforts undertaken to date remain insufficient to meet most of these targets. It is therefore urgent to concentrate on the implementation of reforms, with a particular attention to measures which have a short-term effect on jobs and growth.

Insufficient reforms

The EU member states are lagging. Brownie points for honesty, although nothing more than the European Commission said in its second Annual Growth Survey 2012 (AGS), which kicked off the European Semester:

Annual Growth Survey 2012 VOL. 1/5; Brussels, 23.11.2011 COM(2011) 815 final (18 pages) 

Progress report on the Europe 2020 strategy VOL. 2/5 - ANNEX I; Brussels, 23.11.2011 COM(2011) 815 final (27 pages) 

Macro-economic report VOL. 3/5 - ANNEX II; Brussels, 23.11.2011 COM(2011) 815 final (21 pages) 

Draft joint employment report VOL. 4/5 - ANNEX III; Brussels, 23.11.2011 COM(2011) 815 final (16 pages) 

Growth-friendly tax policies in member states and better tax coordination in the EU VOL. 5/5 - ANNEX IV; Brussels, 23.11.2011 COM(2011) 815 final (13 pages) 

For those who think that the Commission is evil and biased, even the more recent (22 February 2012) synthesis report on the implementation of the European Semester (Council document 6662/12), prepared by the Danish Council presidency, is relatively open about less than brilliant progress (page 3):

The Annual Growth Survey shows that progress has been made in a number of areas, but much remains to be done.

In particular, measures announced or adopted during 2011 must now be implemented rigorously in all Member States. The economic climate makes this difficult, but should be seen as an incentive to further focus efforts, both at the national and the European level.

Returning to growth

Both the Annual Growth Survey 2012 and the Council synthesis report contained advice on further action. Let us here quote key points the Danish report made (pages 3-4):

Commitments regarding the objectives on poverty, education, innovation and green growth, in particular, should not be set aside while not endangering rigorous fiscal consolidation.

- Fiscal consolidation efforts have been undertaken by almost all Member States but further efforts appear necessary and, in several countries, medium-term budgetary frameworks remain to be strengthened. Ad hoc measures regarding VAT systems taken by some Member States have yet to produce results. There has only been limited progress across Europe as regards the shift of taxation away from labour. The coherence of the measures taken and their impact on growth and fiscal consolidation also remain to be analysed.

- Efforts to increase competitiveness are still needed, in particular, to increase competition in the retail, service and infrastructures sector. While the transposition of the Services Directive in Member States is progressing, more support needs to give to enhancing crossborder labour mobility including by revision of the EU rules on mutual recognition of professional qualifications.

- Improving the environment in which businesses, including SMEs, operate is important, in particular the reduction of unjustified administrative and regulatory burdens.

- Promoting employment is a key policy objective in all Member States. Nevertheless, in many countries, more could be done in terms of active labour market policies and to combat labour market segmentation and excessively rigid employment protection legislation, reform unemployment benefit systems to make work pay and enhance employability of vulnerable groups. Youth unemployment remains of critical concern. Progress on the inclusion of young people in the labour market is still insufficient in several countries.

- Dual training and other reforms are under way in education systems, but investment in education and training is affected by fiscal constraints in a number of Member States. Ensuring quality of public spending in these areas is a particular priority.

- Pension system reforms have been undertaken in some Member States and are under way in a number of others, but their impact is often hampered by early retirement opportunities and special schemes that are still in place.

- The number of people at risk of poverty is on the rise, and has not been effectively addressed. More focus on increasing labour market participation of vulnerable groups could help address this concern. Some countries still have to take action to address the interrelated issues of household indebtedness and housing markets.

Naturally, the countries with the greatest problems are the ones to need the fastest and most dramatic reform, although their past record is the least promising. However, given the sorry state of the economy in almost all of the EU member states, the need for structural reform in the European Union as a whole is profound.

The national leaders have spoken wisely. Now they must act.



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (recently ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (meaning European Law, in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?

Breathing life into EU2020 necessary for growth, competitiveness and employment

After the European Council (EUCO) summary we noted a few key points in the intergovernmental Treaty on stability, coordination and governance in the economic and monetary union (TSCG, ”fiscal compact”) before discussing that the national leaders condemned themselves to achieve economic growth, enhanced competitiveness and new jobs within tighter budget limits, practically without money.

With growth stalling, Europe's competitiveness seriously eroded and unemployment rising, more than cheerful rhetoric is going to be needed to turn the tide.

What do the heads of state or government propose to do?

We turn to the three remaining cornerstones in European Council 1-2 March 2012 conclusions (EUCO 4/12, available in 23 languages) to take a look at this Houdini act.


Europe 2020

The political leaders remind themselves and others that the European Union has a comprehensive long term strategy for smart, sustainable and inclusive growth, Europe 2020 (EU2020):

2. "Europe 2020" is Europe's strategy for jobs and growth and its comprehensive response to the challenges it is facing. In particular, the five targets set out for 2020 remain fully relevant and will continue to guide the action of Member States and the Union to promote employment; improve the conditions for innovation, research and development; meet our climate change and energy objectives; improve education levels and promote social inclusion in particular through the reduction of poverty.

Europe 2020 involves the member state in reform work at EU level with regard to the seven flagship initiatives. The institutions of the European Union and the governments of the member states have jointly agreed on common EU2020 targets. Many of the concrete structural, growth-enhancing reforms need to be carried out in and by the EU member states, by state, regional and local actors, social partners and enterprises. The structural reforms at EU and national level are intended to create synergy effects. The five headline targets have been translated into national targets, which take account of the different situations.

By mid-April (the end of April, at the latest) each EU member state sets out its actions in its national reform programme 2012 (NRP). The European Commission analyses every NRP, as well as the stability or convergence programme of every member state, and issues recommendations.

In the summer, the European Council and the Council (of ministers) are going to conclude the planning circle known as the European Semester by addressing recommendations to all the member states.


Divine inspiration?

There are worrying signs that Europe is sliding more than rising. The loss of international competitiveness and export shares in world markets are root causes of this decline, almost across the board.

Difficult but decisive reforms are needed, but rarely do we see signs of lively national debates centred on the Europe 2020 as a dynamic key to reform policies. Preparing mandatory programmes in the recesses of national ministries of economy, perhaps concerting with the main social partners, leads to paper programmes devoid of life.

The heads of state or government have given themselves a reminder of EU2020, but having returned home from the spring European Council, they have to breathe life into the Europe 2020 strategy process domestically.

They failed during the Lisbon strategy decade, and their EU2020 start has been disappointing, with the results we can see around us.

Especially in the member states lagging behind, divine inspiration looks necessary, but failing that the prime ministers and presidents have to make the Europe 2020 strategy a success in their own countries.

The Europe 2020 reforms concern almost all ministries and levels of government and the social partners, but also individual businesses and citizens. The media need to be woken up, if they don't notice themselves.



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (recently ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (meaning European Law, in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?

EUCO challenge: growth despite budget balancing

We already looked at the summary offered by the European Council. Since I enjoy the luxury of being able to blog about yesterday's news, I'll try to discuss what EUCO said about economic growth, competitiveness and jobs.

The conclusions of the European Council are available in all 23 official EU languages: in English: European Council 1/2 March 2012 (EUCO 4/12).

After the clear summary, the conclusions start with part I. Economic policy (paragraphs 1-24) and II. International summits (paragraphs 25-28).

Since our leaders do not want to ”burden” us with helpful links or references to the relevant documents, the process of reading becomes slow, even if we only want to hint at the existing official positions.


Stability and consolidation

The first paragraph lays the foundation. I understand financial stability as both a banking sector in working order and as tolerable borrowing costs for governments and enterprises. Fiscal consolidation means smaller budget deficits:

1. The European Union is taking all necessary measures to put Europe back on the path to growth and jobs. This requires a two-pronged approach, covering both measures to ensure financial stability and fiscal consolidation and action to foster growth, competitiveness and employment.

We enter a politically charged area. If deficits are cut, the hovercraft sinks to the ground. It lands on those who have received money from public coffers in some form, including the poor, which in turn slows the rest of the economy.

It may be socially understandable and politically tempting to protest, but do the protestors have real alternatives?

I would like to think there are, but I am afraid I do not see much possibilities this time around.

Between October 2008 and December 2010 the EU member states poured 10.5% of GDP as aid into the financial sector, but problems remain in the banking sector.

Many of the EU governments have no money to spare, and their borrowing is prohibitively expensive.


Alert Mechanism Report (AMR)

Naturally, some can dismiss the EU Commission is part of the same conspiracy as I am, but take the time to read the first Alert Mechanism Report 14.2.2012 COM(2012) 68, which offers a broader view of macroeconomic imbalances than mere budget deficits. (The AMR is available in 22 languages.)


Right or wrong?

Although the first report of its kind, I find the AMR ”family portrait” disturbing as well as essentially convincing, against the background of a clear loss of competitiveness and exports for the EU as a whole.

If we return to the pub discussion level, I would not expect a majority of the EUCO members to be ideologically driven enough to want to slash budgets and gain impopularity just for the fun of it.

At the same time, they have made their own game harder: regaining competitiveness and returning to economic growth, despite efforts to diminish public deficits.

Cold comfort for the jobless, but in my humble opinion, EUCO has made the right basic choice.

What can be done in these circumstances?



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (recently ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?

EUCO: Fiscal compact TSCG

The fiscal compact, officially the Treaty on stability, coordination and governance in the economic and monetary union (TSCG), was signed yesterday by 25 of the 27 governments of the EU member states. Only the Czech Republic and the United Kingdom chose to exclude themselves at this stage.

The TSCG text is available in the 22 authentic treaty languages (Bulgarian, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish and Swedish).


A common concern

The recital reminds us of the obligation of all member states of the European Union to regard their economic policies as a matter of common concern. This obligation was introduced by the Maastricht Treaty, which was signed twenty years ago.

Recently, the failure of the states to adhere to and to enforce this obligation has turned it into a grave concern, common to all EU citizens (and beyond).

The TSCG still builds on the principle of national economic policies, which need to be coordinated intergovernmentally, although it purports to shrink the straitjacket.


Treaty law and enhanced cooperation

The aim of the signatories is to incorporate the substance of the TSCG into the legal framework
of the European Union within five years (Article 16). According to Article 10, enhanced cooperation is seen as an option.

This intergovernmental treaty, close to but outside the institutional framework of the European Union, went through six different drafts, which were not officially made public. However, the draft texts were leaked to selected media. Even if selective leaks violate the principle of equality between EU citizens, openness was served.


Ratification

According to Article 14(2) and (3), the TSCG needs to be ratified by at least twelve euro area member states to enter into force among them.

The meaning is twofold. The final number of ratifying states may be less than 25. For constitutional reasons Ireland is going to call yet another national referendum. Other countries may stumble when they try to transpose the changes into national law, although aid from the European Stability Mechanism (ESM) will become conditional upon the ratification of the TSCG.

On the other hand, a few dropouts won't spoil the party for the masochists.


Euro Summit

The provisions on governance (Euro Summit) apply to all parties from the original entry into force. See Article 14(4). The TSCG legalises the recent practice of euro summits, which have eclipsed the Eurogroup, which meets informally but is mentioned in an EU Treaty protocol.


Political alignment

For the non-euro countries, the TSCG is mainly a symbol of political alignment, since they undertake no concrete obligations, if they do not expressly undertake obligations. See Article 14(5). However, according to Article 12(3) they are granted limited participation rights in the Euro Summit.

The TSCG as a whole applies to the eurozone countries, although only a part of the provisions are real additions to the euro area acquis.

The signing of the TSCG took care of the ”austerity” part at the European Council 1-2 March 2012, so the main part of the EUCO meeting could – for a change – be devoted to economic growth, competitiveness and jobs.



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (recently ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?

Breaking news!!! ”Van Rompuy bites dog!!!”

At this moment the home page of the European Council is all about the spring EUCO meeting 1 to 2 March 2012, with further pages dedicated to the re-election of president Herman Van Rompuy, the first day of the spring European Council, the euro area leaders on Greece, the Treaty on stability, coordination and governance (TSCG aka the fiscal compact) signed, and day two of the EUCO meeting summed up.

These summaries have links to documents, speeches and webcasts, so technically the communication effort was handled neatly. Under Meetings, I would prefer for the conclusions and the euro statement to link to the page with all the available language versions regardless of the language the visitor happens to use. The link to the TSCG offers an example.


EUCO summary

For the reader pressed for time, the EUCO conclusions begin with a summary of the results:

The European Council discussed the implementation of the EU's economic strategy. This strategy pursues both continued fiscal consolidation and determined action to boost growth and jobs; sustainable growth and jobs cannot be built on deficits and excessive debt levels. The measures taken to stabilize the situation in the euro area are bearing fruit.

The European Council endorsed the five priorities for 2012 set out in the Commission's Annual Growth Survey. It looked at action that has to be taken at national level. Member States must make faster progress towards the targets of the Europe 2020 Strategy and step up efforts on the reforms taken up in the 2011 Country-Specific Recommendations. They are expected to indicate the measures they intend to take to that effect in their National Reform Programmes and their Stability or Convergence Programmes. The European Council also discussed action required at the EU level, pushing ahead with completing the Single Market in all its aspects, both internal and external, and boosting innovation and research.

In the margins of the European Council the participating Member States signed the Treaty on stability, coordination and governance in the EMU.

The European Council set the EU's priorities for the forthcoming G20 meeting and UN Rio+20 Conference, with a particular emphasis on growth-enhancing measures and reforms. It took stock of developments concerning the Arab Spring and set guidance for future EU action to support that process.

The European Council granted candidate status to Serbia.

It agreed that the Council should revert to the issue of Bulgaria and Romania's accession to the Schengen area in order to adopt its decision in September.

Finally, the European Council re-elected Herman Van Rompuy as its President.

Herman Van Rompuy

One of the concrete decisions was the reappointment (formally election) of the EUCO president for two and a half years.

I already noted that president Herman Van Rompuy promised no real change for EU citizens during his second term, during which he will chair the Euro Summit as well. (A post in Swedish on Grahnblawg too about this election of a sole candidate.)

In addition to the draft conclusions (not formally published) and press conference videos, Van Rompuy left a number of speeches and statements as reading for journalists and aficionados of EU politics: his acceptance speech, his statement after the first session of the European Council with the letter S in prominence, his speech at the signing of the of the Treaty on Stability, Coordination
and Governance in the Economic and Monetary Union (TSCG) by 25 of the 27 EU member states, and his positive end note at the conclusion of the summit, even risking a joke about his own (s)election (in French).


Van Rompuy bites dog?

Those who cry out for boldness and charisma are probably driven to despair before Van Rompuy opens his mouth, and they possibly fall asleep before hearing a word.

If ”Man bites dog” encapsulates news, there is little front page headline material to wring out of these addresses.

The structure is clear and the style restrained. In a low key they put chosen policies in perspective and explain the choices made. Their lack of hyperbole makes them more credible than many EU proclamations of yore. The messages seem to be the kind of gentle prodding national leaders want, or at least tolerate.

Are Van Rompuy's interventions and work effective? Can the outcomes be judged now or later?



Ralf Grahn
speaker on EU affairs, especially digital policy and law


P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?

European Council and Euro Summit: Van Rompuy promises more of the same

Habemus what? White smoke rose from the Justus Lipsius building. Without a black ball, both a cabal of 27 and a coterie of 17 political leaders in Europe made it clear that they want more of the same.

Late and almost imperceptibly the selection of Herman Van Rompuy to chair the Euro Summit coterie and the European Council for the next two and a half years had been introduced into the meagre advance information from EUCO to the public.

The selection of Van Rompuy to chair both clubs from 1 June 2012 to 30 November 2014 has now been confirmed.

In his acceptance speech Van Rompuy reminded his backers that ”our duty is to preserve the trust of the citizens in the Union”.

It would have been even better, if he had remembered that we are citizens of the European Union (even if we still lack full political rights).

Can we hope for better governance and more openness? Van Rompuy's thank-you address seems to dash any hope of improvement: ”In my second mandate, I intend to remain true to my style and working methods.”

Despite this, Van Rompuys audaciously speaks about winning over the hearts and minds of the Europeans.

How about democratic reform of the European Union and its institutions? For Van Rompuy democracy becomes a value worth effort right beyond the external border of the EU:

Without exaggerating the means at our disposal, we must act united whenever our interests and our values -- in particular democratic values -- are at stake, in the first place in our neighbourhood. This is where our credibility starts.

In addition, president Van Rompuy reported about the discussions at the first EUCO session. True to his style and working methods, he still did not share the paper he had circulated to the heads of state or government on how to revive growth and employment.

Update 7 March 2012: Through Twitter the Council press office yesterday made an Issues Paper (29 February 2012) available to the public.

Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. With a sometimes tenuous hold on democracy, between the global issues and the national level, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (ranked fourth among politcal blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Is your blog already listed among them? Are you following the debates which matter for your future?

European Council and Single Market: ambitious enough?

Ahead of the spring European Council, the joint letter from the twelve prime ministers David Cameron (United Kingdom), Mark Rutte (Netherlands), Mario Monti (Italy), Andrus Ansip (Estonia), Valdis Dombrovskis (Latvia), Jyrki Katainen (Finland), Enda Kenny (Ireland), Petr Nečas (Czech Republic), Iveta Radičová (Slovakia), Mariano Rajoy (Spain), Fredrik Reinfeldt (Sweden) and Donald Tusk (Poland) to the president of the European Council (EUCO) Herman van Rompuy and the president of the European Commission José Manuel Barroso was titled A plan for growth in Europe.

This means that fifteen EU member states, among them France and Germany, did not participate in this call for growth policies.


Single Market reform

At the top of the wish list of the dozen premiers came an improved Single Market:

First, we must bring the single market to its next stage of development, by reinforcing governance and raising standards of implementation. The Commission’s report to the June European Council should set out clear and detailed actions needed to enhance implementation and strengthen enforcement.

Action should start in the services sector. Services now account for almost four fifths of our economy and yet there is much that needs to be done to open up services markets on the scale that is needed. We must act with urgency, nationally and at the European level, to remove the restrictions that hinder access and competition and to raise standards of implementation and enforcement to achieve mutual recognition across the single market. We look forward to the Commission report on the outcome of sectoral performance checks and call on the Commission to fulfil its obligation under the services directive to report comprehensively on efforts to open up services markets and to make recommendations for additional measures, if necessary in legislation, to fulfil the internal market in services.

Barroso reply

In the Annex to the Barroso reply we find the following list of ongoing or forthcoming actions:

1. Single Market

a) Commission Communication to the June European Council

This will present recommendations on how to make better use of the existing tools for improving and monitoring implementation of the Single Market, proposals on how to organise annual reporting on the Single Market, including on network industries and proposals on how to improve infringement/enforcement policy.

b) Commission report on the Services Directive and efforts to open up services markets, with recommendations for additional measures

The Commission is currently assessing the quality of the implementation of the Services Directive in all Member States, from an economic and legal point of view and on the operation of the Points of Single Contact and will report on this in the coming months.

c) Commission report on the outcome of sectoral performance checks

We are processing performance checks in 3 key sectors: Tourism, Construction and Business Services, to assess how different pieces of EU legislation applying to services work in practice when taken together.

***

Would you say that the demands or the planned actions are ambitious enough to turn the tide? If they are, in your view, will the needed qualified majorities be found? Is a sea change likely in the EU countries, especially the ones behind the curve?



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. For better or for worse, between the global issues and the national level, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (ranked fourth among politcal blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Is your blog already listed among them? Are you following the debates which matter for your future?