Wednesday, 24 September 2008

EU: Broad economic policy guidelines IV

Would the EU Treaty of Lisbon do anything to attain the goals of the European Union, to achieve convergence and to enhance monitoring of the national economic policies?


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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 Treaty establishing the European Community (TEC) was to become the Treaty on the Functioning of the European Union (TFEU), 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 86 of the Treaty of Lisbon (ToL) the IGC 2007 amended Article 99 TEC (OJ 17.12.2007 C 306/70─71):

86) Article 99 shall be amended as follows:

(a) in paragraph 4, the first sentence of the first subparagraph shall be replaced by the following two sentences:

‘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, on a recommendation from the Commission, may address the necessary recommendations to the Member State concerned.’;

(b) the second subparagraph of paragraph 4 shall become paragraph 5 and the current paragraph 5 shall be renumbered 6;

(c) the following two new subparagraphs shall be inserted in paragraph 4:

‘Within the scope of this paragraph, the Council shall act without taking into account the vote of the member of the Council representing the Member State concerned.

A qualified majority of the other members of the Council shall be defined in accordance with Article 205(3)(a).’;

(d) in paragraph 5, renumbered 6, the words ‘The Council, acting in accordance with the procedure referred to in Article 252, may adopt detailed rules’ shall be replaced by the following: ‘The European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, may adopt detailed rules’, the words ‘of this Article’ shall be deleted.

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The TFEU table of equivalences confirms that the new Article 99 TFEU (ToL) in the original Treaty of Lisbon was later renumbered Article 121 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 121 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─98:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 1 Economic policy

Article 121 Lisbon Treaty
(ex Article 99 TEC)

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 120.

2. The Council shall, on a recommendation from the Commission, 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 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 Union.

On the basis of this conclusion, the Council shall 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 Union 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 Commission may address a warning to the Member State concerned. The Council, on a recommendation from the Commission, may address the necessary recommendations to the Member State concerned. The Council may, on a proposal from the Commission, decide to make its recommendations public.

Within the scope of this paragraph, the Council shall act without taking into account the vote of the member of the Council representing the Member State concerned.

A qualified majority of the other members of the Council shall be defined in accordance with Article 238(3)(a).

5. 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.

6. The European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, may adopt detailed rules for the multilateral surveillance procedure referred to in paragraphs 3 and 4.

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Those who have followed the path from Article 99 TEC, through the draft Constitution and the Constitution, until Article 121 of the consolidated Treaty of Lisbon, see that the bulk of the provision ─ indeed, of the different treaty versions ─ is almost identical.

The Lisbon Treaty introduces minor changes, in the footsteps of the European Convention: In paragraph 4, the Commission is allowed to issue a first warning to a member state at deviance. Technically, the rules on qualified majority voting have been solved by a referral to Article 238(3)(a) TFEU.

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For the convenience of readers, Article 238(3)(a) TFEU is reproduced here (OJ 9.5.2008 C 115/154):

“3. As from 1 November 2014 and subject to the provisions laid down in the Protocol on
transitional provisions, in cases where, under the Treaties, not all the members of the Council
participate in voting, a qualified majority shall be defined as follows:

(a) A qualified majority shall be defined as at least 55 % of the members of the Council representing the participating Member States, comprising at least 65 % of the population of these States.

A blocking minority must include at least the minimum number of Council members representing
more than 35 % of the population of the participating Member States, plus one member, failing
which the qualified majority shall be deemed attained;”

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The following instalment is going to take a look at some comments concerning Article 121 TFEU.


Ralf Grahn