EU: Economic and Financial Committee

The Council (Ecofin) has at its disposal an Economic and Financial Committee (EFC), based on the current Treaty establishing the European Community and retained by the Treaty on the Functioning of the European Union (Lisbon Treaty).


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Current treaty

Article 114 (ex Article 109c) of the Treaty establishing the European Community (TEC) sets out the tasks of the important advisory Monetary Committee, replaced by the Economic and Financial Committee at the start of the third stage of economic and monetary union (EMU).

Here is the text of Article 123(4) TEC, from the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/91─93:

Article 114 TEC

1. In order to promote coordination of the policies of Member States to the full extent needed for the functioning of the internal market, a Monetary Committee with advisory status is hereby set up.

It shall have the following tasks:

— to keep under review the monetary and financial situation of the Member States and of the Community and the general payments system of the Member States and to report regularly thereon to the Council and to the Commission,

— to deliver opinions at the request of the Council or of the Commission, or on its own initiative for submission to those institutions,

— without prejudice to Article 207, to contribute to the preparation of the work of the Council referred to in Articles 59, 60, 99(2), (3), (4) and (5), 100, 102, 103, 104, 116(2), 117(6),
119, 120, 121(2) and 122(1),

— to examine, at least once a year, the situation regarding the movement of capital and the freedom of payments, as they result from the application of this Treaty and of measures adopted by the Council; the examination shall cover all measures relating to capital movements and payments; the Committee shall report to the Commission and to the Council on the outcome of this examination.

The Member States and the Commission shall each appoint two members of the Monetary Committee.

2. At the start of the third stage, an Economic and Financial Committee shall be set up. The Monetary Committee provided for in paragraph 1 shall be dissolved.

The Economic and Financial Committee shall have the following tasks:

— to deliver opinions at the request of the Council or of the Commission, or on its own initiative for submission to those institutions,

— to keep under review the economic and financial situation of the Member States and of the Community and to report regularly thereon to the Council and to the Commission, in particular on financial relations with third countries and international institutions,

— without prejudice to Article 207, to contribute to the preparation of the work of the Council referred to in Articles 59, 60, 99(2), (3), (4) and (5), 100, 102, 103, 104, 105(6), 106(2), 107(5) and (6), 111, 119, 120(2) and (3), 122(2), 123(4) and (5), and to carry out other advisory and preparatory tasks assigned to it by the Council,

— to examine, at least once a year, the situation regarding the movement of capital and the freedom of payments, as they result from the application of this Treaty and of measures adopted by the Council; the examination shall cover all measures relating to capital movements and payments; the Committee shall report to the Commission and to the Council on the outcome of this examination.

The Member States, the Commission and the ECB shall each appoint no more than two members of the Committee.

3. The Council shall, acting by a qualified majority on a proposal from the Commission and after consulting the ECB and the Committee referred to in this Article, lay down detailed provisions concerning the composition of the Economic and Financial Committee. The President of the Council shall inform the European Parliament of such a decision.

4. In addition to the tasks set out in paragraph 2, if and as long as there are Member States with a derogation as referred to in Articles 122 and 123, the Committee shall keep under review the monetary and financial situation and the general payments system of those Member States and report regularly thereon to the Council and to the Commission.

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Original Lisbon Treaty

In Article 2, point 99, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) made the following specific amendments to Article 114 (OJ 17.12.2007 C 306/75):

99) Article 114 shall be amended as follows:

(a) in paragraph 1, first subparagraph, the words ‘a Monetary Committee with advisory status’ shall be replaced by ‘an Economic and Financial Committee’;

(b) in paragraph 1, the second and third subparagraphs shall be deleted;

(c) in paragraph 2, the first subparagraph shall be deleted; in the third indent, the reference to paragraphs 2, 3, 4 and 5 of Article 99 shall be replaced by a reference to paragraphs 2, 3, 4 and 6 of Article 99, and the references to paragraph 2 of Article 122 and to paragraphs 4 and 5 of Article 123 shall be replaced by a reference to paragraphs 2 and 3 of Article 117a;

(d) in paragraph 4, the reference to Articles 122 and 123 shall be replaced by a reference to Article 116a.

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The specific (and the horizontal) amendments can, of course, be read, but they cannot be understood without detailed comparison with the existing treaty text.

The Article in question is an example of the Lisbon Treaty drafting technique, and a reminder of why consolidated versions of the treaties are necessary to fulfil the basic requirements of democratic discussion.

In spite of this, the original Council position was to defer the publication of consolidations beyond the ratification processes, until the Lisbon Treaty would have entered into force ─ 1 January 2009, at the earliest, but possibly never. In reality, this obstruction lasted ‘only’ about four months, when several ‘private’ consolidated versions had already been published.

The Treaty of Lisbon was signed 13 December 2007. The first Council consolidation is dated 15 April 2008, and it was published on the Council web site the following day. On Europe Day, 9 May 2008, the Official Journal published the consolidated Lisbon Treaty versions of the treaties in the official languages of the European Union.

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Renumbering

The TFEU table of equivalences confirms that Article 114 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 134 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII (OJ 17.12.2007 C 306/214).

(In the consolidated version of the Lisbon Treaty, OJ 9.5.2008 C 115, the Tables of equivalences start on page 361, but the ToL numbers have been omitted.)

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Consolidated Lisbon Treaty: TFEU

Article 134 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 115/105─106:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

CHAPTER 3
INSTITUTIONAL PROVISIONS

Article 134 TFEU
(ex Article 114 TEC)

1. In order to promote coordination of the policies of Member States to the full extent needed for the functioning of the internal market, an Economic and Financial Committee is hereby set up.

2. The Economic and Financial Committee shall have the following tasks:

— to deliver opinions at the request of the Council or of the Commission, or on its own initiative for submission to those institutions,

— to keep under review the economic and financial situation of the Member States and of the Union and to report regularly thereon to the Council and to the Commission, in particular on financial relations with third countries and international institutions,

— without prejudice to Article 240, to contribute to the preparation of the work of the Council referred to in Articles 66, 75, 121(2), (3), (4) and (6), 122, 124, 125, 126, 127(6), 128(2), 129(3) and (4), 138, 140(2) and (3), 143, 144(2) and (3), and in Article 219, and to carry out other advisory and preparatory tasks assigned to it by the Council,

— to examine, at least once a year, the situation regarding the movement of capital and the freedom of payments, as they result from the application of the Treaties and of measures adopted by the Council; the examination shall cover all measures relating to capital movements and payments; the Committee shall report to the Commission and to the Council on the outcome of this examination.

The Member States, the Commission and the European Central Bank shall each appoint no more than two members of the Committee.

3. The Council shall, on a proposal from the Commission and after consulting the European Central Bank and the Committee referred to in this Article, lay down detailed provisions concerning the composition of the Economic and Financial Committee. The President of the Council shall inform the European Parliament of such a decision.

4. In addition to the tasks set out in paragraph 2, if and as long as there are Member States with a derogation as referred to in Article 139, the Committee shall keep under review the monetary and financial situation and the general payments system of those Member States and report regularly thereon to the Council and to the Commission.

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Tydying-up

The Lisbon Treaty removes the redundant provisions on the late Monetary Committee, replaced by the Economic and Financial Committee.

The current TEC anticipated this change, to be executed at the start of the third stage of EMU, when the independent European Central Bank took over the responsibility for monetary policy.

Without prejudice...

The tasks of the Economic and Financial Committee are broad, but the referral to Article 240 TFEU is meant to safeguard the position of the committee of the permanent representatives of the member states (Coreper).

Composition

Council Decision 98/743/EC of 21 December 1998 on the detailed provisions concerning the composition of the Economic and Financial Committee.

Statutes

Council Decision 1999/8/EC of 31 December 1998 adopting the Statutes of the Economic and Financial; replaced by Council Decision 2003/476/EC

Information

The decisions on the composition of the Economic and Financial Committee and a summary of its tasks can be accessed through the European Commission’s Scadplus web page ‘Economic and Financial Committee’:

http://europa.eu/scadplus/leg/en/lvb/l25038.htm

The French national central bank, Banque de France, offers web page with a summary of the Economic and Financial Committee (EFC):

http://www.banque-france.fr/gb/eurosys/telechar/europe/04-416_Comite_economique_et_financier-GB.pdf

Derogation

The European Commission’s Economic and Financial Affairs web page ‘Convergence Report of the European Commission: green light for Slovakia’ (7 May 2008) offers an introduction to the monitoring of member states with a derogation, in other words, outside the euro area:

http://ec.europa.eu/economy_finance/thematic_articles/article12550_en.htm

The Convergence Report covers ten member states: Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Sweden.

The European Union has 27 member states, of which 15 are eurozone countries and 10 are studied in the Convergence report. The two member states ‘missing in action’ are the usual opt-outs Denmark and the United Kingdom. You can check the Convergence Report for the reasons.



Ralf Grahn