Tuesday, 23 September 2008

EU: Broad economic policy guidelines II

Has the treaty reform process tried to improve the provisions on economic policies as a matter of common concern, or more specifically the broad economic policy guidelines?

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-71 of the draft Treaty establishing a Constitution for Europe, OJ 18.7.2003 C 169/39-40:

Article III-71 Draft Constitution

1. Member States shall regard their economic policies as a matter of common concern and shall coordinate them within the Council of Ministers, in accordance with Article III-70.

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

The European Council, on the basis of the report from the Council of Ministers, shall discuss a conclusion on the broad guidelines of the economic policies of the Member States and of the Union. On the basis of this conclusion, the Council of Ministers shall adopt a recommendation setting out these broad guidelines. It 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 of Ministers, on the basis of reports submitted by the Commission, shall monitor economic developments in each of the Member States and in the Union, as well as the consistency of economic policies with the broad guidelines referred to in paragraph 2, and shall regularly carry out an overall assessment.

For the purpose of this multilateral surveillance, Member States shall forward information to the Commission on important steps 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 Commission may address a warning to the Member State concerned. The Council of Ministers, on a recommendation from the Commission, may address the necessary recommendations to the Member State concerned. The Council of Ministers, on a proposal from the Commission, may decide to make its recommendations public.

Within the scope of this paragraph, the Council of Ministers shall act without taking into account the vote of the representative of the Member State concerned, and a qualified majority shall be defined as the majority of the votes of the other Member States, representing at least three fifths of their population.

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

6. European laws may lay down detailed rules for the multilateral surveillance procedure referred to in paragraphs 3 and 4.

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The draft Constitution followed the current TEC text closely, with the customary terminological differences and a few stylistic ones, but in paragraph 4 the Convention introduced two novelties: In the first subparagraph, the Commission, instead of the Council, was authorised to address a warning to a member state. The second subparagraph excluded the member state concerned, when voting on a recommendation or its publicity concerning the erring state.

The government of Sweden ─ a country outside the Eurozone ─ made the following remarks in ‘Europeiska konventet om EU:s framtid’ (Utrikesdepartementet, Departementsserien (Ds) 2003:58, 2003), page 55:

”Inom den ekonomiska politiken föreslås att kommissionen bl.a. skall få möjlighet att utfärda varningar till medlemsstater som inte bedöms följa de allmänna riktlinjer som rådet enats om rörande varje medlemsstats offentliga finanser. Konventet föreslår också att den berörda medlemsstatens röst inte skall räknas vid beslut om att utfärda en rekommendation när en medlemsstat inte efterlever de allmänna riktlinjerna eller vid beslut huruvida en medlemsstat har ett alltför stort underskott i de offentliga finanserna. [---]

The Swedish government noted both the possibility for the Commission to issue warnings and exclusion of the member state concerned from voting.

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Ahead of the intergovernmental conference (IGC 2003─2004), the government of Sweden, in line with the European Convention, supported some strengthening of the instruments for multilateral surveillance of economic policies, although the government underlined the national character of economic policy; in ‘Europeiska konventet om EU:s framtid’ (Regeringens skrivelse 2003/04:13, den 2 oktober 2003), pages 49─50:

“En väl fungerande ekonomisk-politisk samordning är viktig för att unionen skall kunna hantera gränsöverskridande effekter av medlemsstaternas ekonomiska politik och för att valutaunionen skall fungera väl. Det nuvarande ramverket och kompetensfördelningen för den ekonomisk-politiska samordningen är i grunden bra. Instrumenten för genomförande och uppföljning kan dock behöva stärkas, bl.a. för att befästa medlemsstaternas åtaganden. Det är därför positivt att konventet lägger förslag som går i denna riktning. En viktig princip är att den ekonomiska politiken är nationell och faller inom medlemsstaternas befogenhet även om viss samordning är av gemensamt intresse.”

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Étienne de Poncins highlighted the proposed shift to the ordinary legislative procedure (co-decision) in his commentary ‘Vers une Constitution européenne’ (Éditions 10/18, 2003), page 294 :

« Commentaire : le paragraphe 6 de cet article sur la surveillance multilatérale relève dans les traités actuels de la procédure de coopération entre le Parlement et le Conseil. Cette procédure disparaissant dans la Constitution, la procédure législative ordinaire sera d’application. Le Parlement gagne là des pouvoirs importants sur un thème sensible pour les gouvernements. »

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In the following instalment we look at the corresponding economic policy coordination text of the Constitutional Treaty.


Ralf Grahn