Wednesday, 20 February 2008

EU: TFEU Policy coordination

The systematic approach towards competences of the European Union in the Treaty of Lisbon includes mandatory coordination of member states policies in two important areas, economic and employment policies, with an option to take coordinating initiatives in a third, social policies.

Drafting novelties for better presentation do not necessarily change the way the European Union works. A mechanical comparison between the Lisbon Treaty and the Constitution is therefore of limited value, unless we elucidate the substantial changes or lack of them, and consider what they mean in relation to the present treaties, the ones which actually are amended.

To contribute to the knowledge of all sides about the EU and its workings, regardless of the recipients’ (and the comparer’s) preconceived views, these comparisons have to be made as objectively as possible.

In addition, I allow myself both value judgments and banter, trying to make clear when I am writing in objective and when in subjective mode. (Today’s epistle is not especially representative of the latter, being almost wholly factual in tone.)

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In the Treaty of Lisbon (ToL) the intergovernmental conference inserted a new Article 2d TFEU (OJ 17.12.2007 C 306/47):

Article 2d TFEU (ToL), to be renumbered Article 5 TFEU

1. The Member States shall coordinate their economic policies within the Union. To this end, the Council shall adopt measures, in particular broad guidelines for these policies.

Specific provisions shall apply to those Member States whose currency is the euro.

2. The Union shall take measures to ensure coordination of the employment policies of the Member States, in particular by defining guidelines for these policies.

3. The Union may take initiatives to ensure coordination of Member States' social policies.

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Since many visitors seem to be interested in the similarities and differences between the Lisbon Treaty and the Constitution, we can track the history backwards until we reach the existing treaties, the ones actually being amended.

The Treaty establishing a Constitution for Europe contained the following Article I-15 The coordination of economic and employment policies (OJ 16.12.2004 C 310/17):

Article I-15
The coordination of economic and employment policies

1. The Member States shall coordinate their economic policies within the Union. To this end, the Council of Ministers shall adopt measures, in particular broad guidelines for these policies.

Specific provisions shall apply to those Member States whose currency is the euro.

2. The Union shall take measures to ensure coordination of the employment policies of the Member States, in particular by defining guidelines for these policies.

3. The Union may take initiatives to ensure coordination of Member States' social policies.

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We can conclude that the Lisbon Treaty has taken over this Article of the Constitutional Treaty unchanged.

The following stop is the European Convention and its draft Treaty establishing a Constitution for Europe, where the corresponding provision is Article I-14 (OJ 18.7.2003 C 169/11):

Article 14
The coordination of economic and employment policies

1. The Union shall adopt measures to ensure coordination of the economic policies of the Member States, in particular by adopting broad guidelines for these policies. The Member States shall coordinate their economic policies within the Union.

2. Specific provisions shall apply to those Member States which have adopted the euro.

3. The Union shall adopt measures to ensure coordination of the employment policies of the Member States, in particular by adopting guidelines for these policies.

4. The Union may adopt initiatives to ensure coordination of Member States' social policies.

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Basically, the new Article was introduced by the Convention, although the IGC 2004 made some editorial changes. Paragraph 1 of each version seems to indicate some substantial shift, the Constitution being slightly more wishy-washy than its predecessor.

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Coordination of member states’ economic policies, including the broad economic policy guidelines, is firmly based in the current TEC, where Articles 98 and 99 offers a range of activities (for the latest consolidated version of the TEU and TEC, go to OJ 29.12.2006 C 321 E/82-83):

CHAPTER 1 TEC
ECONOMIC POLICY

Article 98

Member States shall conduct their economic policies with a view to contributing to the achievement of the objectives of the Community, as defined in Article 2, and in the context of the broad guidelines referred to in Article 99(2). The Member States and the Community shall act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, and in compliance with the principles set out in Article 4.

Article 99

1. Member States shall regard their economic policies as a matter of common concern and shall coordinate them within the Council, in accordance with the provisions of Article 98.

2. The Council shall, acting by a qualified majority on a recommendation from the Commission, formulate a draft for the broad guidelines of the economic policies of the Member States and of the Community, and shall report its findings to the European Council.

The European Council shall, acting on the basis of the report from the Council, discuss a conclusion on the broad guidelines of the economic policies of the Member States and of the Community.

On the basis of this conclusion, the Council shall, acting by a qualified majority, adopt a recommendation setting out these broad guidelines. The Council shall inform the European Parliament of its recommendation.

3. In order to ensure closer coordination of economic policies and sustained convergence of the economic performances of the Member States, the Council shall, on the basis of reports submitted by the Commission, monitor economic developments in each of the Member States and in the Community as well as the consistency of economic policies with the broad guidelines referred to in paragraph 2, and regularly carry out an overall assessment.

For the purpose of this multilateral surveillance, Member States shall forward information to the Commission about important measures taken by them in the field of their economic policy and such other information as they deem necessary.

4. Where it is established, under the procedure referred to in paragraph 3, that the economic policies of a Member State are not consistent with the broad guidelines referred to in paragraph 2 or that they risk jeopardising the proper functioning of economic and monetary union, the Council may, acting by a qualified majority on a recommendation from the Commission, make the necessary recommendations to the Member State concerned. The Council may, acting by a qualified majority on a proposal from the Commission, decide to make its recommendations public.

The President of the Council and the Commission shall report to the European Parliament on the results of multilateral surveillance. The President of the Council may be invited to appear before the competent committee of the European Parliament if the Council has made its recommendations public.

5. The Council, acting in accordance with the procedure referred to in Article 252, may adopt detailed rules for the multilateral surveillance procedure referred to in paragraphs 3 and 4 of this Article.

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The interested reader can find additional information in the following official documents:

Council Recommendation 2005/601/EC of 12 July 2005 on the broad economic policy guidelines of the Member States and the Community (2005 – 2008) (OJ 6.8.2005 L 205)

Council Recommendation 2007/209/EC of 27 March 2007 on the 2007 update of the broad guidelines for the economic policies of the Member States and the Community and on the implementation of Member States' employment policies (OJ 3.4.2007 L 92)

There is a convenient presentation of the Broad economic policy guidelines (2005 – 2008) available on the Commission’s Scadplus web pages:

http://europa.eu/scadplus/leg/en/lvb/l25078.htm

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Specific provisions apply to those Member States whose currency is the euro. Monetary policy for the Eurozone is an exclusive EU competence according to the TFEU. How the members belonging to the Eurozone handle their economic policies has direct implications for the monetary policy.

We are going to encounter the detailed provisions later, but at this stage I will only draw your attention to the Protocol on the Euro Group annexed to the Lisbon Treaty, with informal meetings of the (Finance) Ministers and a President elected for two and a half years, an arrangement currently in use (OJ 17.12.2007 C 306/151):

PROTOCOL
ON THE EURO GROUP

THE HIGH CONTRACTING PARTIES,

DESIRING to promote conditions for stronger economic growth in the European Union and, to that end, to develop ever closer coordination of economic policies within the euro area,

CONSCIOUS of the need to lay down special provisions for enhanced dialogue between the Member States whose currency is the euro, pending the euro becoming the currency of all Member States of the Union,

HAVE AGREED UPON the following provisions, which shall be annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union:

Article 1
The Ministers of the Member States whose currency is the euro shall meet informally. Such meetings shall take place, when necessary, to discuss questions related to the specific responsibilities they share with regard to the single currency. The Commission shall take part in the meetings. The European Central Bank shall be invited to take part in such meetings, which shall be prepared by the representatives of the Ministers with responsibility for finance of the Member States whose currency is the euro and of the Commission.

Article 2
The Ministers of the Member States whose currency is the euro shall elect a president for two and a half years, by a majority of those Member States.

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After living a life on their own, the employment policy guidelines have been integrated with the Broad Economic Policy Guidelines. For a introduction you could visit the Scadplus web pages of the Commission, Employment policy guidelines (2005 – 2008):

http://europa.eu/scadplus/leg/en/cha/c11323.htm

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Whereas economic policy and employment policy coordination are mandatory, the coordination of member states’ social policies is an option.

For an overview of DG Employment, Social Affairs and Equal Opportunities, you could start from the DG’s homepage:

http://ec.europa.eu/employment_social/index_en.html

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I hope that this presentation has supported, coordinated or supplemented your knowledge of EU competences. Anyway, these are the competences we are going to look at next time.


Ralf Grahn