Thursday, 13 November 2008

Eurogroup in Lisbon Treaty

Under the chairmanship of Jean-Claude Juncker, the ministers of finance of the 15 eurozone EU member states, with a population of 320 million, usually convene before each Ecofin Council meeting.

From 1 January 2009 Ján Počiatek, the finance minister of Slovakia, is going to join his colleagues from Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain in the informal Eurogroup.

The president of the European Central Bank (ECB) and the Commission member responsible for economic and financial affairs are invited to the Eurogroup meetings.

The Eurogroup is not a decision-making body. The Council (Ecofin) takes the decisions, but in certain matters only the euro area members participate in the vote.

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Current treaty

The current Treaty establishing the European Community (TEC) lacks provisions on the Eurogroup, although some Council decisions are made by euro area members.


We turn to the European Convention and the Constitutional Treaty.

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Draft Constitution

The European Convention proposed a new section with the aim to strengthen the autonomy of the euro area, Section 3a Provisions specific to Member States which are part of the euro area, with an Article III-89 concerning the Eurogroup (OJ 18.7.2003 C 169/44):

Article III-89 Draft Constitution

Arrangements for meetings between ministers of those Member States which are part of the euro area shall be laid down in the Protocol on the Euro Group.

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Constitutional Treaty

The intergovernmental conference (IGC 2004) adopted the Convention proposal with minor rewording in Article III-195 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/85):

Article III-195 Constitution

Arrangements for meetings between ministers of those Member States whose currency is the euro are laid down by the Protocol on the Euro Group.

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Sweden

The government of non-euro Sweden described the Eurogroup in the draft ratification bill, Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 juni 2005), page 172. The Swedish government noted the existing informal cooperation within the monetary union. The Eurogroup is strengthened by being mentioned in the new treaty and by an elected president for two and a half years. The new Protocol on the Euro Group is mentioned by the Swedish government:

”Redan i dag finns ett informellt samarbete mellan finansministrarna från medlemsländerna i valutaunionen, den s.k. eurogruppen. I det konstitutionella fördraget ges den s.k. eurogruppen en fastare ställning genom att den omnämns i fördraget (artikel III-195) och får en vald ordförande på två och ett halvt år. Till det konstitutionella fördraget är fogat ett nytt protokoll om eurogruppen.”

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Original Lisbon Treaty

In Article 2, point 100, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) inserted a new Chapter 3a Provisions specific to member states whose currency is the euro (OJ 17.12.2007 C 306/75─76):


100) The following new Chapter 3a and new Articles 115 A, 115 B and 115 C shall be inserted:

‘CHAPTER 3a
PROVISIONS SPECIFIC TO MEMBER STATES WHOSE CURRENCY IS THE EURO


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Article 115 B TFEU(ToL)

Arrangements for meetings between ministers of those Member States whose currency is the euro are laid down by the Protocol on the Euro Group.

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Renumbering

The TFEU table of equivalences confirms that the new Article 115b TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 137 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII, and in the renumbered Chapter 4 ‘Provisions specific to Member States whose currency is the euro’ (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 137 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 115/106:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 4
Provisions specific to Member States whose currency is the euro


Article 137 TFEU

Arrangements for meetings between ministers of those Member States whose currency is the euro are laid down by the Protocol on the Euro Group.



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Sweden

The Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008), on page 183, mentions the Eurogroup in terms similar to the ones used concerning the Constitutional Treaty:

”Redan idag finns ett informellt samarbete mellan finansministrarna från medlemsstaterna i valutaunionen, den s.k. eurogruppen. Genom Lissabonfördraget ges den s.k. eurogruppen en fastare ställning genom att den omnämns i fördraget (artikel 115b i EUF-fördraget). Ett nytt protokoll om eurogruppen fogas till EU-fördraget och EUF-fördraget där det bl.a. framgår att ministrarna från de medlemsstater som har euron som valuta ska välja en ordförande för två och ett halvt år. Beslut ska fattas med en majoritet av dessa medlemsstater.”

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Priollaud and Siritzky

In ‘Le traité de Lisbonne ; Commentaire, article par article, des nouveaux traités européens (TUE et TFUE)’ (La Documentation Française, 2008), François-Xavier Priollaud and David Siritzky present the Lisbon Treaty provisions of Chapter 4 (Dispositions propres aux États membres dont la monnaie est l’euro) on page 258 to 260.

The authors remark that the strengthened autonomy for the eurozone is a major step forward, but they remind that the Council (Ecofin) remains the decision-making body (not the Euro Group).

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United Kingdom FCO

‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon (Cm 7311, 21 January 2008) offers the following comment on Article 137 TFEU (on page 13):

“New.Meetings of Euro Group ministers.”

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UK House of Commons Library

The UK House of Commons Library presented the amending treaty in ‘The Treaty of Lisbon: amendments to the Treaty establishing the European Communities’ (Research paper 07/86, 6 December 2007), on page 62 and 63. Note that the numbering of the Articles changed in the signed treaty (original ToL):


Articles 114, 115 and 115(a) (Constitution Articles III-194, 195 and 196), “Provisions specific to Member States whose currency is the Euro”, are new.

Article 114 allows for measures on the coordination and surveillance of budgetary discipline and economic guidelines to be set specifically for the euro area. Article 115A allows for an informal ‘euro group’ to be set up, consisting of Ministers whose currency is the euro. In practice the ‘euro group’ already exists and meets informally prior to normal ECOFIN meetings. Article 115C allows the Council to adopt decisions establishing common positions relevant to EMU within international financial institutions and conferences as well as measures to ensure unified representation within international financial institutions and conferences. These measures will only cover the euro area and will be decided by Member States of the euro area. The Deutsche Bank thought the recognition of the group as a kind of Euro-ECOFIN Council would “moderately strengthen the role of the Eurogroup and improve policy coordination within the euro area.”

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Widipedia

With regard to the euro area generally, the Wikipedia article Eurozone offers an introduction to the single currency and a section on the Eurogroup, as well as a number of links (last update 7 November 2008):

http://en.wikipedia.org/wiki/Eurozone

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Protocol on the Euro Group

The Eurogroup already exists and functions, but formal recognition at treaty level was proposed by the European Convention and agreed by the intergovernmental conferences leading to the Constitutional Treaty (2004) and the Treaty of Lisbon (2007).

The Article in question is a referral to a Protocol. Consequently, the “beef” ─ if there is any ─ is to be found in that Protocol.

The Eurogroup was much discussed during the European Convention. One indication of this interest is that the draft Constitution actually contains a Protocol on the Euro Group, even if the Convention generally left a fairly rudimentary list of protocols (OJ 18.7.2003 C 169/97):

PROTOCOL ON THE EURO GROUP

THE HIGH CONTRACTING PARTIES,

DESIRING to promote conditions for stronger economic growth in Europe 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 which have adopted the euro, pending the accession of all Member States of the Union to the euro area,

HAVE AGREED upon the following provisions, which are annexed to the Constitution:

Article 1
The Ministers of the Member States which have adopted 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 and 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 which have adopted the euro.

Article 2
The Ministers of the Member States which have adopted the euro shall elect a president for two and a half years, by a majority of those Member States.

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If we jump from the draft Constitution to the consolidated version of the TFEU, we notice that Protocol (No 14) on the Euro Group differs mainly in nuances. According to the Lisbon Treaty, following in the footsteps of the Constitution, the Commission shall take part and shall participate in the preparation of meetings, whereas the Convention was content to invite the Commission along with the European Central Bank.

But the main characteristics are still there. Informal meetings are recognised formally. The Eurogroup is still intended to elect a president for two and a half years (OJ 9.5.2008 C 115/283):


PROTOCOL (No 14)
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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The next TFEU post is going to look at the Eurogroup on the international scene.

Ralf Grahn