European Union: Economic policy

Certain basic principles of economic policy emerge between the member states and the European Union, when we look at the EU treaties.

We advance from the current Treaty establishing the European Community to the Treaty of Lisbon.


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Article 98 of the Treaty establishing the European Community (TEC) is found in the latest consolidated version of the current treaties, published in the Official Journal of the European Union 29.12.2006 C 321 E/82:

Part Three – Community policies

Title VII – Economic and monetary policy

Chapter 1 – Economic policy

Article 98 TEC

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.

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We look at the different stages of the treaty reform process.

First, we turn to the European Convention, the closest thing to a constituent assembly EU citizens have had since the 1950s and 1980s. The corresponding Article is located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 1 ‘Economic policy’.

Article III-70 of the draft Treaty establishing a Constitution for Europe, OJ 18.7.2003 C 169/39:

Article III-70 Draft Constitution

Member States shall conduct their economic policies in order to contribute to the achievement of the Union's objectives, as defined in Article I-3, and in the context of the broad guidelines referred to in Article III-71(2). The Member States and the Union 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 III-69.

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‘In order to contribute’ is a bit firmer than ‘with a view to contributing’, but otherwise the proposal of the Convention differed only technically from the current text.

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In the Treaty establishing a Constitution for Europe, approved by 18 member states, the introductory provisions on economic policy were located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 1 ‘Economic policy’.

Article III-178 is found in OJ 16.12.2004 C 310/76:

Article III-178 Constitution

Member States shall conduct their economic policies in order to contribute to the achievement of the Union's objectives, as defined in Article I-3, and in the context of the broad guidelines referred to in Article III-179(2). The Member States and the Union 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 III-177.

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Between the draft Constitution and the Constitutional Treaty only the numbering of the Article and those referred to changed.

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I found no specific mention of the economic and monetary policy in the mandate of the intergovernmental conference (IGC 2007 Mandate, Council document 11218/07, 26 June 2007).

The present TEC was to become the Treaty on the Functioning of the European Union, and the innovations as agreed in the 2004 IGC were to be inserted into the Treaty by way of specific modifications in the usual manner (points 17 and 18, pages 6 and 7).

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In Article 2, point 85 of the Treaty of Lisbon (ToL) the IGC 2007 inserted an Article 97b into the Treaty on the Functioning of the European Union (TFEU) and in point 86, Article 99 TEC was amended (OJ 17.12.2007 C 306/70).

In other words, no specific amendments concerned Article 98 TEC, leaving only a few horizontal amendments to be made, notably the one mentioned in Article 2 ToL, point 8, replacing the reference to Article TEc by a reference to Article 2 TEU (later renumbered Article 3 TEU). See OJ 17.12.2007 C 306/44 and Table of equivalences OJ 17.12.2007 C 306/200.

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The TFEU table of equivalences confirms that the new Article 98 TFEU (ToL) in the original Treaty of Lisbon was later renumbered Article 120 TFEU in the consolidated version, under the title ‘Economic and monetary policy’ renumbered Title VIII (OJ 17.12.2007 C 306/211–212).

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Article 120 of the Treaty on the Functioning of the European Union (TFEU) is found in the consolidated versions of the Treaty on European Union and the Treaty on the Functioning of the European Union, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/97:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Article 120 TFEU
(ex Article 98 TEC)

Member States shall conduct their economic policies with a view to contributing to the achievement of the objectives of the Union, as defined in Article 3 of the Treaty on European Union, and in the context of the broad guidelines referred to in Article 121(2). The Member States and the Union 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 119.

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The IGC 2007 did not interpret the wording of the Convention and the Constitution on contributing as an innovation, so the weaker ‘with a view to contributing’ was preserved. This and other detail decisions contributed to limiting the volume of the Lisbon Treaty.

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What has been said about Article 120 TFEU?


United Kingdom

Professor Steve Peers covered the Treaty of Lisbon in a number of Statewatch Analyses. ‘EU Reform Treaty Analysis no. 3.4: Revised text of Part Three, Titles VII to XVII of the Treaty establishing the European Community (TEC): Other internal EC policies (Version 2, 24 October 2007) includes the current Title VII Economic and monetary policy.

Peers presented the numbering of Article 98 TFEU (ToL), to be renumbered Article 120 TFEU in the consolidated version, and highlighted the changes, without comment (page 5).

The analysis 3.4 and other useful Statewatch analyses are available through:

http://www.statewatch.org/euconstitution.htm


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The Foreign and Commonwealth Office (FCO) offers a convenient source of brief annotations on Lisbon Treaty amendments in ‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon’ (Command Paper 7311, published 21 January 2008). It offers the following comment on Article 120 TFEU, Article 98 TFEU (ToL) in the original Lisbon Treaty (page 12):

“In substance the same as Article 98 TEC.”

The FCO comparative table is available at:

http://www.official-documents.gov.uk/document/cm73/7311/7311.asp

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The UK House of Commons Library Research Paper 07/86 ‘The Treaty of Lisbon: amendments to the Treaty establishing the European Community’ (published 6 December 2007) discussed ‘H. Economic and Monetary Policy’ on pages 61 to 64. Article 98 TFEU (ToL) was mentioned in passing on page 61.

The Library Research Paper 07/86 is available at:

http://www.parliament.uk/commons/lib/research/rp2007/rp07-086.pdf

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The House of Lords European Union Committee report ‘The Treaty of Lisbon: an impact assessment, Volume I: Report’ (HL Paper 62-I, published 13 March 2008) is a valuable resource on the Treaty of Lisbon, but it did not dwell on economic and monetary policy.

The report is accessible at:

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeucom/62/62.pdf


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Sweden

The consultation paper ’Lissabonfördraget’ was the first official Swedish description of the Lisbon Treaty amendments, and it is available at:

http://www.regeringen.se/content/1/c6/09/49/81/107aa077.pdf

It was followed by the Swedish government’s draft ratification bill ‘Lagrådsremiss – Lissabonfördraget’, published 29 May 2008:

http://www.regeringen.se/sb/d/5676/a/106277

The draft bill was given a green light by the Council on Legislation (Lagrådet):

http://www.lagradet.se/yttranden/Lissabonfordraget.pdf

The latest official government view, and now my standard reference for Sweden, is the ratification bill (Regeringens proposition 2007/08:168 Lissabonfördraget; 3 July 2008):

http://www.regeringen.se/content/1/c6/10/84/02/8c96cf3e.pdf

Economic and monetary policy (23.2 Ekonomisk och monetary politik) is discussed on pages 180 to 185.

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Finland

Among our standard sample of Lisbon Treaty commentaries, Finland is the first Eurozone country.

The Finnish ratification bill, ‘Hallituksen esitys Eduskunnalle Euroopan unionista tehdyn sopimuksen ja Euroopan yhteisön perustamissopimuksen muuttamisesta tehdyn Lissabonin sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 23/2008 vp), discusses economic and monetary policy (Talous- ja rahapolitiikka) on pages 209 to 214.

The ratification bill briefly describes Article 98 TFEU (ToL), renumbered Article 120 TFEU, as unchanged (page 209):

”98 artiklaa (uusi 120 artikla), jossa jäsenvaltiot velvoitetaan harjoittamaan talouspolitiikkaansa niin, että ne myötävaikuttavat unionin tavoitteiden toteuttamiseen, ei muuteta.”

The Finnish ratification bill is available at:

http://www.finlex.fi/fi/esitykset/he/2008/20080023.pdf


The Swedish language version of the ratification bill ‘Regeringens proposition till Riksdagen med förslag om godkännande av Lissabonfördraget om ändring av fördraget om Europeiska unionen och fördraget om upprättandet av Europeiska gemenskapen och till lag om sättande i kraft av de bestämmelser i fördraget som hör till området för lagstiftningen’ (RP 23/2008 rd), makes the same remark under ’Ekonomisk och monetär politik’ on Article 98 TFEU (ToL), the future Article 120 TFEU, on page 212:

”Artikel 98 (blivande artikel 120), där medlemsstaterna åläggs att föra sin ekonomiska politik så att de bidrar till att förverkliga unionens mål, ändras inte.”

The ratification bill in Swedish can be accessed at:

http://www.finlex.fi/sv/esitykset/he/2008/20080023.pdf

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François-Xavier Priollaud and David Siritzky offer a short introductory explanation on economic and monetary policy (pages 246 and 247) and on economic policy (pages 248 to 250) in their book ‘Le traité de Lisbonne – Commentaire, article par article, des nouveaux traités européens (TUE et TFUE)’ (La Documentation française, Paris, 2008).



Ralf Grahn