Cork lawyer and legal blogger Fergus O’Rourke did it! He located the discussion paper I have been looking for these last two days, and pestering the world about. Thank you, Fergus!
Frustratingly, it is (at least now) posted ‘right under our noses’, on the University College Dublin pages, which I searched two days ago, in vain.
Besides having been commended by Senator and Chairman Paschal Donohoe in the Oireachtas Sub-Committee Report, the UCD Dublin discussion paper discusses European scenarios of general EU interest.
Ireland is not the only one with choices to make concerning the future of and in Europe (as I argue in the preceding post regarding the NIC world trends).
UPDATE - Edited 30 November 2008 about 17:25 EET:
The UCD Dublin European Institute 31 page discussion paper Ireland’s Future in Europe – Scenarios and Implications, by Gavin Barrett, Brigid Laffan, Rodney Thom, Daniel C. Thomas, Ben Tonra (12 November 2008).
The link first offered by me was somehow broken. Instead, follow the advice kindly offered by the UCD EIT Director Daniel Thomas.
Go to the homepage of the Institute and scroll down to the bottom of the page. There are links to both the discussion paper and the Oireachtas report:
http://www.ucd.ie/dei
In addition, if you click on the side bar at Working papers, there is an earlier one 08-01 which also addresses the Lisbon Treaty:
Gavin Barrett, Final Impact: The Treaty of Lisbon and the Final Provisions of the Treaty Establishing the European Community and the Treaty on European Union, UCD Dublin European Institute Working Paper 08-1, May 2008.
***
I want to thank Fergus O'Rourke and Daniel Thomas for their help, and I apologise to the people I have troubled with my questions.
Ralf Grahn
Sunday, 30 November 2008
Europe: Dismal trends 2025
European security and prosperity 101 or the Why’s of EU reform, courtesy of the United States of America.
This is what the European leaders have failed to grasp, to agree on or at least to communicate. It is also the reason why the anti-EU campaigners are completely wrong and why the euroscepticism or indifference of large segments of EU citizens is contributing to our declining prospects.
The US National Intelligence Council (NIC) report Global Trends 2025: A Transformed World (November 2008) speaks plainly about the problems facing Europe (page 32 to 33). This is the opening paragraph on Europe:
“Europe: Losing Clout in 2025. We believe Europe by 2025 will have made slow progress toward achieving the vision of current leaders and elites: a cohesive, integrated, and influential global actor able to employ independently a full spectrum of political, economic, and military tools in support of European and Western interests and universal ideals. The European Union would need to resolve a perceived democracy gap dividing Brussels from European voters and move past the protracted debate about its institutional structures.”
***
Comment
I agree that the European Union needs to become a cohesive, integrated, and influential global actor able to employ independently a full spectrum of political, economic, and military tools in support of European and Western interests and universal ideals.
I also agree that this is the rhetorical aim of a fair number of the current European leaders and elites. But in the real world the expanded European Union has become even more unwieldy and weak where it matters.
What used to be the “French paradox” – willing the results without willing the means – has become the general state of affairs in an increasingly intergovernmentalist European Union.
The greatness of the US Constitution and the explanatory Federalist Papers lies in the (rough) correspondence between the objectives and the means.
Time and again, the national European leaders have baulked at giving the European Community (European Union) the means to enhance the security and the prosperity of European citizens.
How did our leaders respond to the European Defence Community and the European (Politcal) Community? How did their ‘vision’ manifest itself, when they received the Spinelli draft Constitution? How did they act at the European Convention and during the preceding and subsequent intergovernmental conferences?
Instead of real powers, where they count, the national political leaders have sought to preserve their own playing-grounds while tinkering with institutional EU reform. They have shown every sign of wanting to put the protracted debate about EU institutional structures behind them, if they manage to get the Lisbon Treaty into force, but the Treaty of Lisbon falls glaringly short of making the European Union a coherent world player.
The current treaties and the Lisbon Treaty are the European Articles of Confederation, not only with regard to the insufficient powers, but because of the lack of democratic legitimacy.
The problem is graver than a ‘perceived democracy gap’. The so called double legitimacy of the European Union, primarily founded on member states, but with sops to the citizens, is artificial.
Real powers require real democracy. It is as simple as that.
Naturally, we can continue to debate whether the national leaders in Europe have failed to grasp the obvious, or if their efforts to communicate their European vision have fallen flat, or if their overriding concern is to preserve their own prerogatives.
The existing EU reform treaties, the Constitutional Treaty and the Lisbon Treaty are what the European national leaders have managed to agree on and the ‘vision’ they have communicated. These are the facts on which we as citizens can judge.
In my view, the NIC report ascribes to the current European leaders and elites a vision they simply do not have.
The fact remains: Only profound reform can arrest and reverse the decline of the European Union in world affairs.
There is no room for the unanimity rule – the liberum veto – if we EU citizens as a whole want safety and prosperity in the 21st century.
We need a European Union based on its citizens, an elected European Parliament with general powers and a politically accountable executive.
I invite the current European leaders and elites to communicate and to enact this vision.
Ralf Grahn
Source:
US National Intelligence Council (NIC):
Global Trends 2025: A Transformed World (November 2008)
http://www.dni.gov/nic/PDF_2025/2025_Global_Trends_Final_Report.pdf
This is what the European leaders have failed to grasp, to agree on or at least to communicate. It is also the reason why the anti-EU campaigners are completely wrong and why the euroscepticism or indifference of large segments of EU citizens is contributing to our declining prospects.
The US National Intelligence Council (NIC) report Global Trends 2025: A Transformed World (November 2008) speaks plainly about the problems facing Europe (page 32 to 33). This is the opening paragraph on Europe:
“Europe: Losing Clout in 2025. We believe Europe by 2025 will have made slow progress toward achieving the vision of current leaders and elites: a cohesive, integrated, and influential global actor able to employ independently a full spectrum of political, economic, and military tools in support of European and Western interests and universal ideals. The European Union would need to resolve a perceived democracy gap dividing Brussels from European voters and move past the protracted debate about its institutional structures.”
***
Comment
I agree that the European Union needs to become a cohesive, integrated, and influential global actor able to employ independently a full spectrum of political, economic, and military tools in support of European and Western interests and universal ideals.
I also agree that this is the rhetorical aim of a fair number of the current European leaders and elites. But in the real world the expanded European Union has become even more unwieldy and weak where it matters.
What used to be the “French paradox” – willing the results without willing the means – has become the general state of affairs in an increasingly intergovernmentalist European Union.
The greatness of the US Constitution and the explanatory Federalist Papers lies in the (rough) correspondence between the objectives and the means.
Time and again, the national European leaders have baulked at giving the European Community (European Union) the means to enhance the security and the prosperity of European citizens.
How did our leaders respond to the European Defence Community and the European (Politcal) Community? How did their ‘vision’ manifest itself, when they received the Spinelli draft Constitution? How did they act at the European Convention and during the preceding and subsequent intergovernmental conferences?
Instead of real powers, where they count, the national political leaders have sought to preserve their own playing-grounds while tinkering with institutional EU reform. They have shown every sign of wanting to put the protracted debate about EU institutional structures behind them, if they manage to get the Lisbon Treaty into force, but the Treaty of Lisbon falls glaringly short of making the European Union a coherent world player.
The current treaties and the Lisbon Treaty are the European Articles of Confederation, not only with regard to the insufficient powers, but because of the lack of democratic legitimacy.
The problem is graver than a ‘perceived democracy gap’. The so called double legitimacy of the European Union, primarily founded on member states, but with sops to the citizens, is artificial.
Real powers require real democracy. It is as simple as that.
Naturally, we can continue to debate whether the national leaders in Europe have failed to grasp the obvious, or if their efforts to communicate their European vision have fallen flat, or if their overriding concern is to preserve their own prerogatives.
The existing EU reform treaties, the Constitutional Treaty and the Lisbon Treaty are what the European national leaders have managed to agree on and the ‘vision’ they have communicated. These are the facts on which we as citizens can judge.
In my view, the NIC report ascribes to the current European leaders and elites a vision they simply do not have.
The fact remains: Only profound reform can arrest and reverse the decline of the European Union in world affairs.
There is no room for the unanimity rule – the liberum veto – if we EU citizens as a whole want safety and prosperity in the 21st century.
We need a European Union based on its citizens, an elected European Parliament with general powers and a politically accountable executive.
I invite the current European leaders and elites to communicate and to enact this vision.
Ralf Grahn
Source:
US National Intelligence Council (NIC):
Global Trends 2025: A Transformed World (November 2008)
http://www.dni.gov/nic/PDF_2025/2025_Global_Trends_Final_Report.pdf
Saturday, 29 November 2008
Ireland in Europe: Where is the UCD discussion paper?
The Houses of the Oireachtas, Sub-Committee on Ireland’s Future in the European Union report ‘Ireland’s future in the European Union: Challenges, Issues and Options’ (published 27 November 2008) has led to a spat.
The ‘no’ side accuses the Sub-Committee of not representing the ‘no’ side fairly and of drawing on expert work prepared by the University College Dublin European Institute, said to be pro-EU.
In the foreword Committee Chairman Paschal Donohoe gives tribute to the discussion paper:
“I also wish to thank UCD’s Dublin European Institute for their discussion paper, which made an invaluable contribution to the Sub-Committee’s work.”
Naturally, any political minority is free to accuse the majority of availing itself of expert work, as you can see in today’s Irish newspapers (Irish Times and Irish Independent).
But outside Ireland the reasoning of the UCD European Institute might be of interest due to the contents of the contribution, more than for reasons of partisan bickering.
Since the Lisbon Treaty has been approved by 25 national parliaments, there is great European interest in Ireland’s future role in Europe.
***
Help!?
Yesterday and today I have tried in vain to find the European Institute’s discussion paper on the web (and the published Oireachtas report does not include the Annexes mentioned in the Contents).
Since this blog has a number of Irish readers, I turn to them with a question: Can you locate the UCD European Institute’s discussion paper on Ireland’s future in Europe for me and my readers?
Information would be gratefully received, since it would complement the materials mentioned in yesterday’s blog post ‘Ireland and Lisbon Treaty’ as well as earlier entries.
Ralf Grahn
The ‘no’ side accuses the Sub-Committee of not representing the ‘no’ side fairly and of drawing on expert work prepared by the University College Dublin European Institute, said to be pro-EU.
In the foreword Committee Chairman Paschal Donohoe gives tribute to the discussion paper:
“I also wish to thank UCD’s Dublin European Institute for their discussion paper, which made an invaluable contribution to the Sub-Committee’s work.”
Naturally, any political minority is free to accuse the majority of availing itself of expert work, as you can see in today’s Irish newspapers (Irish Times and Irish Independent).
But outside Ireland the reasoning of the UCD European Institute might be of interest due to the contents of the contribution, more than for reasons of partisan bickering.
Since the Lisbon Treaty has been approved by 25 national parliaments, there is great European interest in Ireland’s future role in Europe.
***
Help!?
Yesterday and today I have tried in vain to find the European Institute’s discussion paper on the web (and the published Oireachtas report does not include the Annexes mentioned in the Contents).
Since this blog has a number of Irish readers, I turn to them with a question: Can you locate the UCD European Institute’s discussion paper on Ireland’s future in Europe for me and my readers?
Information would be gratefully received, since it would complement the materials mentioned in yesterday’s blog post ‘Ireland and Lisbon Treaty’ as well as earlier entries.
Ralf Grahn
European Union: Employment Committee
The treaty based advisory Employment Committee promotes coordination between EC (EU) member states on employment and labour market policies.
Does ‘management and labour’ have a specific meaning in this context? Often used in Eurojargon, but what are the social partners?
***
Current TEC
The headline of this post starts with ‘European Union’, which can be defended if you look at the EU as a Greek Temple, with three pillars. More exactly, the subject matter belongs to the Community pillar (first pillar), but few readers seem to be that exact in their web searches. The term ‘European Community’ seems to have fallen into disuse, save for official documents and a few brave lawyers. I try to use the EU and the EC terms in a pragmatic manner, depending on the context.
The current Article 130 (ex Article 109s) of the Treaty establishing the European Community (TEC) concludes the Title VIII Employment by establishing a sector committee.
The Employment Committee works in an advisory capacity.
Whereas most of the Employment Title speaks about employment (policies) or refers to the employment aims, Article 130 TEC picks up the term ‘labour markets’ mentioned in Article 125 TEC.
The Employment Committee promotes coordination between member states on employment and labour market policies.
The Employment Committee consults management and labour, known as the social partners in Eurospeak.
There is the customary proviso that the Employment Committee works ‘without prejudice to Article 207’, referring to the Committee of Permanent Representatives of the Member States (Coreper), the last stop before the Ministers meet in the Council.
The intergovernmental nature of the Employment Committee is illustrated not only by the wording that it is established to ‘promote coordination between Member States’ or by the fact that the Committee is appointed by the Council, but also by the preponderance of member states’ representatives. Each member state appoints two members (as does the Commission).
The existing Article 130 TEC (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/103):
Article 130 TEC
The Council, after consulting the European Parliament, shall establish an Employment Committee with advisory status to promote coordination between Member States on employment and labour market policies. The tasks of the Committee shall be:
— to monitor the employment situation and employment policies in the Member States and the Community,
— without prejudice to Article 207, to formulate opinions at the request of either the Council or the Commission or on its own initiative, and to contribute to the preparation of the Council proceedings referred to in Article 128.
In fulfilling its mandate, the Committee shall consult management and labour.
Each Member State and the Commission shall appoint two members of the Committee.
***
Original Lisbon Treaty (ToL)
The Treaty of Lisbon (ToL) is still on its rocky road to possible entry into force. Agreed and signed between 27 member state governments, it has by now been approved by the national parliaments in 25 member states ahead of the original target date for entry into force (1 January 2009). Among the parliamentary ratifiers, only the holder of the next Council Presidency, the Czech Republic, looks certain to miss the agreed target date.
In addition, Ireland is pondering its European future following the negative outcome of the 12 June 2008 referendum. (For some updated references to the Irish debate, you can read yesterday’s post ‘Ireland and Lisbon Treaty’.)
Anyway, in some instances the Lisbon Treaty is the most up-to-date manifestation of what the member state governments want the treaties to say.
On the other hand, the treaty reform process, at least since the Treaty of Nice, has been focused on so called institutional innovations. With a few notable exceptions, most areas of Community policy have only been updated and adjusted technically to the different reform treaty versions: the draft Constitution, the Constitutional Treaty and the Lisbon Treaty.
The changes to the Title on employment in the Lisbon Treaty are minimal. Article 2, point 111 deleted a few words from Article 125 TEC and the following point (112) concerned the common commercial policy.
Consequently, Article 126 TEC and the following ones underwent only horizontal or technical amendments (OJ 17.12.2007 C 306/79). In Article 130 TEC the word ‘Community’ is replaced by ‘Union’, as elsewhere in the Treaty of Lisbon. Another horizontal amendment is that the clarifying words ‘acting by a simple majority’ are inserted after ‘The Council’ according to Article 2, point 4 ToL, but the procedure remains the same.
***
Renumbering
The Table of equivalences of the original Treaty of Lisbon tells us that Title VIII Employment was to be renumbered Title IX and that Article 130 TEC and TFEU (ToL) was to be renumbered Article 150 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/214).
***
Consolidated Lisbon Treaty
Article 150 of the Treaty on the Functioning of the European Union (TFEU) takes over the contents of the existing Article 130 TEC with the minimal change in terminology and the renumbering noted above.
As a consequence, the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/113, looks like this:
TITLE IX
EMPLOYMENT
Article 150 TFEU
(ex Article 130 TEC)
The Council, acting by a simple majority after consulting the European Parliament, shall establish an Employment Committee with advisory status to promote coordination between Member States on employment and labour market policies. The tasks of the Committee shall be:
— to monitor the employment situation and employment policies in the Member States and the Union,
— without prejudice to Article 240, to formulate opinions at the request of either the Council or the Commission or on its own initiative, and to contribute to the preparation of the Council proceedings referred to in Article 148.
In fulfilling its mandate, the Committee shall consult management and labour.
Each Member State and the Commission shall appoint two members of the Committee.
***
Management and labour
The English version of the treaties refers to consulting ‘management and labour’. We look at the wording of the sentence, first in English:
In fulfilling its mandate, the Committee shall consult management and labour.
Management and labour seem to be given more exact contours, when we turn to the German version:
Bei der Erfüllung seines Auftrags hört der Ausschuss die Sozialpartner.
The French words, likewise, gives management and labour a more precise meaning than the English treaty text:
Dans l'accomplissement de son mandat, le comité consulte les partenaires sociaux.
The Sapnish treaty text catches another nuance of the parties or partners to be consulted:
Para llevar a cabo su mandato, el Comité deberá consultar a los interlocutores sociales.
The Finnish treaty text uses (almost) the same terminology as the German and the French, although the customary term evokes contracting parties (collective agreements) as much as partners in a dialogue:
Tehtäväänsä toteuttaessaan komitea kuulee työmarkkinaosapuolia.
The Swedish text uses the term ’arbetsmarknadens parter’ identical with the Finnish concept:
Kommittén ska när den utför sitt uppdrag höra arbetsmarknadens parter.
We can conclude that the drafters of the treaties have had organised employers and organised labour in mind and that national systems of collective bargaining and traditions of dialogue between management and employee interests are reflected in the various terms used. Anyway, the English version seems to be less exact than the other language versions. (The Title Social policy is imbued with references to the social partners.)
The subparagraph does not specify the level of consultations, which means that the wording does not exclude consultations at European or national level.
***
Social partners
The Europa Glossary outlines the meaning of ‘social partners’ in the following way (although it leans heavily on Article 138 TEC, in the current Title XI Social policy, education, vocational training and youth):
Social partners
The glossary is being updated given the recent signing of the Treaty of Lisbon.
The Commission is required to consult various social partners when it wishes to submit proposals in this field (article 138 of the EC Treaty). This social dialogue occurs via the three main cross-industry organisations representing the social partners at European level:
the European Trade Union Confederation (ETUC);
the Union of Industrial and Employers' Confederations of Europe (BUSINESSEUROPE);
the European Centre of Enterprises with Public Participation (CEEP).
In addition to these three European cross-industry organisations, there are many other socio-professional groups representing specific or sectoral interests.
It is the Commission's task to promote consultation of the social partners and take any relevant measures to facilitate their dialogue by ensuring balanced support for the parties.
Before submitting proposals in the field of social policy, the Commission consults the social partners on the possible direction of EU action.
The social partners also play an important role in the European Economic and Social Committee, where they sit alongside other representatives of civil society.
***
Employment Committee – Council decision
Not to forget secondary legislation, the Committee was established by the Council decision of 24 January 2000 establishing the Employment Committee (OJ 4.2.2000 L 29/21).
The decision reiterates the treaty provisions, but adds some specifications to the Committee’s tasks.
***
Employment Committee activity
The European Commission, Employment and Social Affairs, offers an introductory web page on the Employment Committee with links to its activities:
http://ec.europa.eu/employment_social/employment_strategy/emco_en.htm
Ralf Grahn
Does ‘management and labour’ have a specific meaning in this context? Often used in Eurojargon, but what are the social partners?
***
Current TEC
The headline of this post starts with ‘European Union’, which can be defended if you look at the EU as a Greek Temple, with three pillars. More exactly, the subject matter belongs to the Community pillar (first pillar), but few readers seem to be that exact in their web searches. The term ‘European Community’ seems to have fallen into disuse, save for official documents and a few brave lawyers. I try to use the EU and the EC terms in a pragmatic manner, depending on the context.
The current Article 130 (ex Article 109s) of the Treaty establishing the European Community (TEC) concludes the Title VIII Employment by establishing a sector committee.
The Employment Committee works in an advisory capacity.
Whereas most of the Employment Title speaks about employment (policies) or refers to the employment aims, Article 130 TEC picks up the term ‘labour markets’ mentioned in Article 125 TEC.
The Employment Committee promotes coordination between member states on employment and labour market policies.
The Employment Committee consults management and labour, known as the social partners in Eurospeak.
There is the customary proviso that the Employment Committee works ‘without prejudice to Article 207’, referring to the Committee of Permanent Representatives of the Member States (Coreper), the last stop before the Ministers meet in the Council.
The intergovernmental nature of the Employment Committee is illustrated not only by the wording that it is established to ‘promote coordination between Member States’ or by the fact that the Committee is appointed by the Council, but also by the preponderance of member states’ representatives. Each member state appoints two members (as does the Commission).
The existing Article 130 TEC (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/103):
Article 130 TEC
The Council, after consulting the European Parliament, shall establish an Employment Committee with advisory status to promote coordination between Member States on employment and labour market policies. The tasks of the Committee shall be:
— to monitor the employment situation and employment policies in the Member States and the Community,
— without prejudice to Article 207, to formulate opinions at the request of either the Council or the Commission or on its own initiative, and to contribute to the preparation of the Council proceedings referred to in Article 128.
In fulfilling its mandate, the Committee shall consult management and labour.
Each Member State and the Commission shall appoint two members of the Committee.
***
Original Lisbon Treaty (ToL)
The Treaty of Lisbon (ToL) is still on its rocky road to possible entry into force. Agreed and signed between 27 member state governments, it has by now been approved by the national parliaments in 25 member states ahead of the original target date for entry into force (1 January 2009). Among the parliamentary ratifiers, only the holder of the next Council Presidency, the Czech Republic, looks certain to miss the agreed target date.
In addition, Ireland is pondering its European future following the negative outcome of the 12 June 2008 referendum. (For some updated references to the Irish debate, you can read yesterday’s post ‘Ireland and Lisbon Treaty’.)
Anyway, in some instances the Lisbon Treaty is the most up-to-date manifestation of what the member state governments want the treaties to say.
On the other hand, the treaty reform process, at least since the Treaty of Nice, has been focused on so called institutional innovations. With a few notable exceptions, most areas of Community policy have only been updated and adjusted technically to the different reform treaty versions: the draft Constitution, the Constitutional Treaty and the Lisbon Treaty.
The changes to the Title on employment in the Lisbon Treaty are minimal. Article 2, point 111 deleted a few words from Article 125 TEC and the following point (112) concerned the common commercial policy.
Consequently, Article 126 TEC and the following ones underwent only horizontal or technical amendments (OJ 17.12.2007 C 306/79). In Article 130 TEC the word ‘Community’ is replaced by ‘Union’, as elsewhere in the Treaty of Lisbon. Another horizontal amendment is that the clarifying words ‘acting by a simple majority’ are inserted after ‘The Council’ according to Article 2, point 4 ToL, but the procedure remains the same.
***
Renumbering
The Table of equivalences of the original Treaty of Lisbon tells us that Title VIII Employment was to be renumbered Title IX and that Article 130 TEC and TFEU (ToL) was to be renumbered Article 150 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/214).
***
Consolidated Lisbon Treaty
Article 150 of the Treaty on the Functioning of the European Union (TFEU) takes over the contents of the existing Article 130 TEC with the minimal change in terminology and the renumbering noted above.
As a consequence, the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/113, looks like this:
TITLE IX
EMPLOYMENT
Article 150 TFEU
(ex Article 130 TEC)
The Council, acting by a simple majority after consulting the European Parliament, shall establish an Employment Committee with advisory status to promote coordination between Member States on employment and labour market policies. The tasks of the Committee shall be:
— to monitor the employment situation and employment policies in the Member States and the Union,
— without prejudice to Article 240, to formulate opinions at the request of either the Council or the Commission or on its own initiative, and to contribute to the preparation of the Council proceedings referred to in Article 148.
In fulfilling its mandate, the Committee shall consult management and labour.
Each Member State and the Commission shall appoint two members of the Committee.
***
Management and labour
The English version of the treaties refers to consulting ‘management and labour’. We look at the wording of the sentence, first in English:
In fulfilling its mandate, the Committee shall consult management and labour.
Management and labour seem to be given more exact contours, when we turn to the German version:
Bei der Erfüllung seines Auftrags hört der Ausschuss die Sozialpartner.
The French words, likewise, gives management and labour a more precise meaning than the English treaty text:
Dans l'accomplissement de son mandat, le comité consulte les partenaires sociaux.
The Sapnish treaty text catches another nuance of the parties or partners to be consulted:
Para llevar a cabo su mandato, el Comité deberá consultar a los interlocutores sociales.
The Finnish treaty text uses (almost) the same terminology as the German and the French, although the customary term evokes contracting parties (collective agreements) as much as partners in a dialogue:
Tehtäväänsä toteuttaessaan komitea kuulee työmarkkinaosapuolia.
The Swedish text uses the term ’arbetsmarknadens parter’ identical with the Finnish concept:
Kommittén ska när den utför sitt uppdrag höra arbetsmarknadens parter.
We can conclude that the drafters of the treaties have had organised employers and organised labour in mind and that national systems of collective bargaining and traditions of dialogue between management and employee interests are reflected in the various terms used. Anyway, the English version seems to be less exact than the other language versions. (The Title Social policy is imbued with references to the social partners.)
The subparagraph does not specify the level of consultations, which means that the wording does not exclude consultations at European or national level.
***
Social partners
The Europa Glossary outlines the meaning of ‘social partners’ in the following way (although it leans heavily on Article 138 TEC, in the current Title XI Social policy, education, vocational training and youth):
Social partners
The glossary is being updated given the recent signing of the Treaty of Lisbon.
The Commission is required to consult various social partners when it wishes to submit proposals in this field (article 138 of the EC Treaty). This social dialogue occurs via the three main cross-industry organisations representing the social partners at European level:
the European Trade Union Confederation (ETUC);
the Union of Industrial and Employers' Confederations of Europe (BUSINESSEUROPE);
the European Centre of Enterprises with Public Participation (CEEP).
In addition to these three European cross-industry organisations, there are many other socio-professional groups representing specific or sectoral interests.
It is the Commission's task to promote consultation of the social partners and take any relevant measures to facilitate their dialogue by ensuring balanced support for the parties.
Before submitting proposals in the field of social policy, the Commission consults the social partners on the possible direction of EU action.
The social partners also play an important role in the European Economic and Social Committee, where they sit alongside other representatives of civil society.
***
Employment Committee – Council decision
Not to forget secondary legislation, the Committee was established by the Council decision of 24 January 2000 establishing the Employment Committee (OJ 4.2.2000 L 29/21).
The decision reiterates the treaty provisions, but adds some specifications to the Committee’s tasks.
***
Employment Committee activity
The European Commission, Employment and Social Affairs, offers an introductory web page on the Employment Committee with links to its activities:
http://ec.europa.eu/employment_social/employment_strategy/emco_en.htm
Ralf Grahn
Friday, 28 November 2008
Ireland and Lisbon Treaty
In Ireland the Government, the Parliament and the expert community have been busy at work trying to find a solution to the Lisbon Treaty predicament.
Declan Ganley is as busy trying to kill the Lisbon Treaty, which by now has been approved by 25 EU member states’ parliaments.
***
Government
Ahead of the December European Council, the Irish Government is now close to internal agreement on how to proceed with the Lisbon Treaty, reports Deaglán de Bréadún in the Irish Times (28 November 2008): Government to seek ‘binding declarations’ in Lisbon rerun. See:
http://www.irishtimes.com/newspaper/frontpage/2008/1128/1227825379933.html
***
Parliament
Yesterday, 27 November 2008, the Lisbon Treaty subcommittee of the Oireachtas Joint Committee European Affairs issued its report Ireland’s future in the European Union: Challenges, Issues and Options.
The intention is to hold a parliamentary debate before the European Council in December.
The subcommittee wants to strike a balance between keeping Ireland at the heart of Europe and respecting the democratic will of the Irish people, by extracting concessions from the other EU member states.
The Irish Parliament’s report is available at (Word document):
http://www.oireachtas.ie/viewdoc.asp?DocID=10475
For a condensed view of the matter, see Deaglán de Bréadún’s article Oireachtas group says main option is amended treaty (Irish Times, 28 November 2008):
http://www.irishtimes.com/newspaper/ireland/2008/1128/1227825379896.html?via=rel
***
Expert community
About two weeks before this, on 14 November 2008, the Institute of International and European Affairs (Dublin, Ireland) published its report: Ireland’s Future after Lisbon – Issues, Options, Implications.
The IIEA’s report is downloadable at:
http://www.iiea.com/publicationxtest.php?publication_id=38
***
Declan Ganley
Declan Ganley, the founder of anti-Lisbon campaign group Libertas, said that the only action that would cause him to rethink launching Libertas on the EU stage was if Taoiseach Brian Cowen told fellow EU leaders next month Lisbon was dead.
Source:
Jamie Smyth: Ganley’s Brussels office opens for business (Irish Times, 27 November 2008):
http://www.irishtimes.com/newspaper/world/2008/1127/1227739034156.html
Libertas tries to qualify for public campaign contributions at European level.
Jamie Smyth: Libertas applies for European political party funds (Irish Times, 27 November 2008):
http://www.irishtimes.com/newspaper/world/2008/1127/1227739034172.html
Ralf Grahn
Declan Ganley is as busy trying to kill the Lisbon Treaty, which by now has been approved by 25 EU member states’ parliaments.
***
Government
Ahead of the December European Council, the Irish Government is now close to internal agreement on how to proceed with the Lisbon Treaty, reports Deaglán de Bréadún in the Irish Times (28 November 2008): Government to seek ‘binding declarations’ in Lisbon rerun. See:
http://www.irishtimes.com/newspaper/frontpage/2008/1128/1227825379933.html
***
Parliament
Yesterday, 27 November 2008, the Lisbon Treaty subcommittee of the Oireachtas Joint Committee European Affairs issued its report Ireland’s future in the European Union: Challenges, Issues and Options.
The intention is to hold a parliamentary debate before the European Council in December.
The subcommittee wants to strike a balance between keeping Ireland at the heart of Europe and respecting the democratic will of the Irish people, by extracting concessions from the other EU member states.
The Irish Parliament’s report is available at (Word document):
http://www.oireachtas.ie/viewdoc.asp?DocID=10475
For a condensed view of the matter, see Deaglán de Bréadún’s article Oireachtas group says main option is amended treaty (Irish Times, 28 November 2008):
http://www.irishtimes.com/newspaper/ireland/2008/1128/1227825379896.html?via=rel
***
Expert community
About two weeks before this, on 14 November 2008, the Institute of International and European Affairs (Dublin, Ireland) published its report: Ireland’s Future after Lisbon – Issues, Options, Implications.
The IIEA’s report is downloadable at:
http://www.iiea.com/publicationxtest.php?publication_id=38
***
Declan Ganley
Declan Ganley, the founder of anti-Lisbon campaign group Libertas, said that the only action that would cause him to rethink launching Libertas on the EU stage was if Taoiseach Brian Cowen told fellow EU leaders next month Lisbon was dead.
Source:
Jamie Smyth: Ganley’s Brussels office opens for business (Irish Times, 27 November 2008):
http://www.irishtimes.com/newspaper/world/2008/1127/1227739034156.html
Libertas tries to qualify for public campaign contributions at European level.
Jamie Smyth: Libertas applies for European political party funds (Irish Times, 27 November 2008):
http://www.irishtimes.com/newspaper/world/2008/1127/1227739034172.html
Ralf Grahn
EU employment: Incentive measures and pilot projects
Even if there is no independent European Community (European Union) employment policy, the Treaty establishing the European Community offers the EC (EU) some scope for supporting action, labeled as incentive measures.
***
Current TEC
The current Article 129 (ex Article 109r) of the Treaty establishing the European Community (TEC), under the Title VIII Employment, offers the Community some scope of action in the area of employment policy.
Harmonisation of member states’ laws and regulations is excluded out of hand (paragraph 2).
Using the co-decision procedure, the Council may adopt incentive measures.
The incentive measures are ancillary to the employment policies of the member states: designed to encourage cooperation between member states and to support their action.
This supporting role is underlined by the description of allowed actions, such as promoting exchange of information and best practices, offering analysis and advice and through experimental pilot projects.
The existing Article 129 TEC (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/103):
Article 129 TEC
The Council, acting in accordance with the procedure referred to in Article 251 and after consulting the Economic and Social Committee and the Committee of the Regions, may adopt incentive measures designed to encourage cooperation between Member States and to support their action in the field of employment through initiatives aimed at developing exchanges of information and best practices, providing comparative analysis and advice as well as promoting innovative approaches and evaluating experiences, in particular by recourse to pilot projects.
Those measures shall not include harmonisation of the laws and regulations of the Member States.
***
Original Lisbon Treaty
The Treaty of Lisbon (ToL) is still on its rocky road to possible entry into force, but in some instances it is the most up-to-date manifestation of what the member state governments want the treaties to say.
On the other hand, the treaty reform process, at least since the Treaty of Nice, has been focused on so called institutional innovations. With a few notable exceptions, most areas of Community policy have only been updated and adjusted technically to the different reform treaty versions: the draft Constitution, the Constitutional Treaty and the Lisbon Treaty.
The changes to the Title on employment in the Lisbon Treaty are minimal. Article 2, point 111 deleted a few words from Article 125 TEC and the following point (112) concerned the common commercial policy.
Consequently, Article 126 TEC and the following ones underwent only horizontal or technical amendments (OJ 17.12.2007 C 306/79). In Article 129 TEC, as in a number of provisions, ‘the procedure referred to in Article 251’ (without using the customary term ‘co-decision’) is mercifully renamed ‘the ordinary legislative procedure’, which means that the European Parliament is named as co-legislator.
***
Renumbering
The Table of equivalences of the original Treaty of Lisbon tells us that Title VIII Employment was to be renumbered Title IX and that Article 129 TEC and TFEU (ToL) was to be renumbered Article 149 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/214).
***
Consolidated Lisbon Treaty
Article 149 of the Treaty on the Functioning of the European Union (TFEU) takes over the contents of the existing Article 129 TEC with the minimal change in terminology and the renumbering noted above.
As a consequence, the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/113, looks like this:
TITLE IX
EMPLOYMENT
Article 149 TFEU
(ex Article 129 TEC)
The European Parliament and the Council, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and the Committee of the Regions, may adopt incentive measures designed to encourage cooperation between Member States and to support their action in the field of employment through initiatives aimed at developing exchanges of information and best practices, providing comparative analysis and advice as well as promoting innovative approaches and evaluating experiences, in particular by recourse to pilot projects.
Those measures shall not include harmonisation of the laws and regulations of the Member States.
***
Incentive measures and pilot projects
Incentive measures and pilot projects are key terms, but it is not easy to find clear definitions of them. The terms have to be interpreted in the context of each treaty Article where they appear.
The pragmatic solution is to look at what the European Community (European Union) has seen fit to approve through legal acts and budget decisions in each policy area, in this case the employment area.
The European Commission's Directorate-General for Employment, Social Affairs and Equal Opportunities offers information on its activities:
http://ec.europa.eu/social/main.jsp?catId=23&langId=en
Incentive measures (examples)
In addition to Article 149 TFEU presented above, the Treaty on the Functioning of the European Union mentions incentive measures in a few other policy areas where the EU’s powers are weak.
Article 19(1) TFEU (Article 13 TEC) mentions action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation (requiring unanimous Council decision). But adopting the basic principles of Union incentive measures to support
action taken by the Member States in order to contribute to the achievement of these objectives is possible through the ordinary legislative procedure, pursuant to Article 19(2) TFEU.
Article 165 TFEU (Article 149 TEC) concerns education and sporting issues, where the fourth paragraph allows the adoption of incentive measures, as always with the proviso ‘excluding any harmonisation of the laws and regulations of the Member States’.
The European Union’s contribution to the flowering of the cultures of the member states includes the option to use incentive measures, in Article 167 TFEU (Article 151 TEC).
Incentive measures may also be adopted, if they are designed to protect and improve human health and in particular to combat the major cross-border health scourges, measures concerning monitoring, early warning of and combating serious cross-border threats to health, and measures which have as their direct objective the protection of public health regarding tobacco and the abuse of alcohol, according to Article 168 TFEU (Article 152 TEC).
***
Pilot projects
Article 149 seems to be the only TFEU provision employing the term pilot project.
The Interinstitutional Agreement between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (OJ 14.6.2006 C 139) mentions pilot projects in a few instances, without adding much to our understanding of the meaning of the term.
The Commission’s annual draft budget takes into account (c) the possibilities for starting up new policies through pilot projects and/or new preparatory actions or continuing multiannual actions which are coming to an end (point 32).
The Commission’s financial programming identifies for annual actions (pilot projects, preparatory actions, Agencies) and actions financed under the prerogatives of the Commission multiannual estimates and (for pilot projects and preparatory actions) the margins left under the authorised ceilings (point 46).
In Annex II (point D) on interinstitutional collaboration both arms of the budgetary authority (the Council and the European Parliament) undertake to inform the Commission by mid-June of their intentions with regard to amendments which create new preparatory actions/pilot projects or prolong existing ones.
***
As a last resort, Article 263 TFEU (Article 230 TEC) lets the Court of Justice of the European Union review the legality of legal acts and other acts of the institutions.
Ralf Grahn
***
Current TEC
The current Article 129 (ex Article 109r) of the Treaty establishing the European Community (TEC), under the Title VIII Employment, offers the Community some scope of action in the area of employment policy.
Harmonisation of member states’ laws and regulations is excluded out of hand (paragraph 2).
Using the co-decision procedure, the Council may adopt incentive measures.
The incentive measures are ancillary to the employment policies of the member states: designed to encourage cooperation between member states and to support their action.
This supporting role is underlined by the description of allowed actions, such as promoting exchange of information and best practices, offering analysis and advice and through experimental pilot projects.
The existing Article 129 TEC (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/103):
Article 129 TEC
The Council, acting in accordance with the procedure referred to in Article 251 and after consulting the Economic and Social Committee and the Committee of the Regions, may adopt incentive measures designed to encourage cooperation between Member States and to support their action in the field of employment through initiatives aimed at developing exchanges of information and best practices, providing comparative analysis and advice as well as promoting innovative approaches and evaluating experiences, in particular by recourse to pilot projects.
Those measures shall not include harmonisation of the laws and regulations of the Member States.
***
Original Lisbon Treaty
The Treaty of Lisbon (ToL) is still on its rocky road to possible entry into force, but in some instances it is the most up-to-date manifestation of what the member state governments want the treaties to say.
On the other hand, the treaty reform process, at least since the Treaty of Nice, has been focused on so called institutional innovations. With a few notable exceptions, most areas of Community policy have only been updated and adjusted technically to the different reform treaty versions: the draft Constitution, the Constitutional Treaty and the Lisbon Treaty.
The changes to the Title on employment in the Lisbon Treaty are minimal. Article 2, point 111 deleted a few words from Article 125 TEC and the following point (112) concerned the common commercial policy.
Consequently, Article 126 TEC and the following ones underwent only horizontal or technical amendments (OJ 17.12.2007 C 306/79). In Article 129 TEC, as in a number of provisions, ‘the procedure referred to in Article 251’ (without using the customary term ‘co-decision’) is mercifully renamed ‘the ordinary legislative procedure’, which means that the European Parliament is named as co-legislator.
***
Renumbering
The Table of equivalences of the original Treaty of Lisbon tells us that Title VIII Employment was to be renumbered Title IX and that Article 129 TEC and TFEU (ToL) was to be renumbered Article 149 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/214).
***
Consolidated Lisbon Treaty
Article 149 of the Treaty on the Functioning of the European Union (TFEU) takes over the contents of the existing Article 129 TEC with the minimal change in terminology and the renumbering noted above.
As a consequence, the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/113, looks like this:
TITLE IX
EMPLOYMENT
Article 149 TFEU
(ex Article 129 TEC)
The European Parliament and the Council, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and the Committee of the Regions, may adopt incentive measures designed to encourage cooperation between Member States and to support their action in the field of employment through initiatives aimed at developing exchanges of information and best practices, providing comparative analysis and advice as well as promoting innovative approaches and evaluating experiences, in particular by recourse to pilot projects.
Those measures shall not include harmonisation of the laws and regulations of the Member States.
***
Incentive measures and pilot projects
Incentive measures and pilot projects are key terms, but it is not easy to find clear definitions of them. The terms have to be interpreted in the context of each treaty Article where they appear.
The pragmatic solution is to look at what the European Community (European Union) has seen fit to approve through legal acts and budget decisions in each policy area, in this case the employment area.
The European Commission's Directorate-General for Employment, Social Affairs and Equal Opportunities offers information on its activities:
http://ec.europa.eu/social/main.jsp?catId=23&langId=en
Incentive measures (examples)
In addition to Article 149 TFEU presented above, the Treaty on the Functioning of the European Union mentions incentive measures in a few other policy areas where the EU’s powers are weak.
Article 19(1) TFEU (Article 13 TEC) mentions action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation (requiring unanimous Council decision). But adopting the basic principles of Union incentive measures to support
action taken by the Member States in order to contribute to the achievement of these objectives is possible through the ordinary legislative procedure, pursuant to Article 19(2) TFEU.
Article 165 TFEU (Article 149 TEC) concerns education and sporting issues, where the fourth paragraph allows the adoption of incentive measures, as always with the proviso ‘excluding any harmonisation of the laws and regulations of the Member States’.
The European Union’s contribution to the flowering of the cultures of the member states includes the option to use incentive measures, in Article 167 TFEU (Article 151 TEC).
Incentive measures may also be adopted, if they are designed to protect and improve human health and in particular to combat the major cross-border health scourges, measures concerning monitoring, early warning of and combating serious cross-border threats to health, and measures which have as their direct objective the protection of public health regarding tobacco and the abuse of alcohol, according to Article 168 TFEU (Article 152 TEC).
***
Pilot projects
Article 149 seems to be the only TFEU provision employing the term pilot project.
The Interinstitutional Agreement between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (OJ 14.6.2006 C 139) mentions pilot projects in a few instances, without adding much to our understanding of the meaning of the term.
The Commission’s annual draft budget takes into account (c) the possibilities for starting up new policies through pilot projects and/or new preparatory actions or continuing multiannual actions which are coming to an end (point 32).
The Commission’s financial programming identifies for annual actions (pilot projects, preparatory actions, Agencies) and actions financed under the prerogatives of the Commission multiannual estimates and (for pilot projects and preparatory actions) the margins left under the authorised ceilings (point 46).
In Annex II (point D) on interinstitutional collaboration both arms of the budgetary authority (the Council and the European Parliament) undertake to inform the Commission by mid-June of their intentions with regard to amendments which create new preparatory actions/pilot projects or prolong existing ones.
***
As a last resort, Article 263 TFEU (Article 230 TEC) lets the Court of Justice of the European Union review the legality of legal acts and other acts of the institutions.
Ralf Grahn
Thursday, 27 November 2008
Statewatch alert: EU Council curbing free movement?
A press release by Statewatch sounds the alarm concerning the very principles the European Community (European Union) is built on. Rolling back free movement of persons endangers a fundamental principle and trying to forestall more open legislative procedures by intergovernmental fiat is a grave procedural choice.
I give you the text of the Statewatch press release with including links for further study:
Press release, 27 November 2008JUSTICE AND HOME AFFAIRS COUNCIL, Brussels, 27 November:Restriction on the EU freedom of movement of citizens who have been convicted of serious crime or for "repeated offences" (which may be "low level")
Ministers are discussing the adoption of Council Conclusions: Free movement of persons: abuses and substantive problems – Draft Council conclusions on abuses and misuses of the right to free movement of persons (16151/1/08, 26 November 2008, pdf):
http://www.statewatch.org/news/2008/nov/eu-restrictions-free-movement-conclusions-nov-08.pdf
These say that: "Only those exercising their rights in the spirit of the Treaty should benefit from freedom of movement." While referring to third country nationals the proposals would apply to EU citizens as well and allow Member States to deny entry to those who:"break the law in a sufficiently serious manner by committing serious and repeated offences
"The scope of "repeated offences" is undefined and could apply, for example, to protestors who take part in cross-border demonstrations.
These Conclusions are based on a proposal put forward by the UK: Statewatch Analysis: The UK proposals on EU free movement law: an attack on the rule of law and EU fundamental freedoms by Professor Steve Peers - University of Essex (pdf):
http://www.statewatch.org/analyses/no-72-eu-attack-on-fundamental-rights-08.pdf
The draft conclusions constitute an attack on the rule of law and the fundamental freedom of EU citizens and their family members to move freely within the Community. They indicate an intention to:
- ignore a recent important ruling of the Court of Justice as well as many prior rulings of the Court;
- attempt to dictate to the Court how to interpret EC legislation;
- amend or re-interpret EC legislation at the dictat of interior ministries, without applying any form of legislative process; and
- dictate to the Commission how to perform its independent task as guardian of EC law.
The UK proposal includes considering: "the cumulative damage caused by continuous low-level offending can amount to a sufficiently serious threat to public policy"
United Kingdom delegation: Free movement of persons: abuses and substantive problems - Draft Council Conclusions (EU doc no: 15903/08. 18 November 2008, pdf):
http://www.statewatch.org/news/2008/nov/eu-uk-proposal-on-free-movement-15903-08.pdf
***
Intergovernmental law-making without openness and transparency is once again at work. Swift scrutiny by the European Parliament and national parliaments is called for to safeguard the rights of EU citizens.
Ralf Grahn
I give you the text of the Statewatch press release with including links for further study:
Press release, 27 November 2008JUSTICE AND HOME AFFAIRS COUNCIL, Brussels, 27 November:Restriction on the EU freedom of movement of citizens who have been convicted of serious crime or for "repeated offences" (which may be "low level")
Ministers are discussing the adoption of Council Conclusions: Free movement of persons: abuses and substantive problems – Draft Council conclusions on abuses and misuses of the right to free movement of persons (16151/1/08, 26 November 2008, pdf):
http://www.statewatch.org/news/2008/nov/eu-restrictions-free-movement-conclusions-nov-08.pdf
These say that: "Only those exercising their rights in the spirit of the Treaty should benefit from freedom of movement." While referring to third country nationals the proposals would apply to EU citizens as well and allow Member States to deny entry to those who:"break the law in a sufficiently serious manner by committing serious and repeated offences
"The scope of "repeated offences" is undefined and could apply, for example, to protestors who take part in cross-border demonstrations.
These Conclusions are based on a proposal put forward by the UK: Statewatch Analysis: The UK proposals on EU free movement law: an attack on the rule of law and EU fundamental freedoms by Professor Steve Peers - University of Essex (pdf):
http://www.statewatch.org/analyses/no-72-eu-attack-on-fundamental-rights-08.pdf
The draft conclusions constitute an attack on the rule of law and the fundamental freedom of EU citizens and their family members to move freely within the Community. They indicate an intention to:
- ignore a recent important ruling of the Court of Justice as well as many prior rulings of the Court;
- attempt to dictate to the Court how to interpret EC legislation;
- amend or re-interpret EC legislation at the dictat of interior ministries, without applying any form of legislative process; and
- dictate to the Commission how to perform its independent task as guardian of EC law.
The UK proposal includes considering: "the cumulative damage caused by continuous low-level offending can amount to a sufficiently serious threat to public policy"
United Kingdom delegation: Free movement of persons: abuses and substantive problems - Draft Council Conclusions (EU doc no: 15903/08. 18 November 2008, pdf):
http://www.statewatch.org/news/2008/nov/eu-uk-proposal-on-free-movement-15903-08.pdf
***
Intergovernmental law-making without openness and transparency is once again at work. Swift scrutiny by the European Parliament and national parliaments is called for to safeguard the rights of EU citizens.
Ralf Grahn
EU Lisbon Strategy: National Reform Programmes 2008
The EU member states have prepared new National Reform Programmes (NRPs) in the context of the relaunched Lisbon Strategy for Growth and Jobs. The Employment page I first looked at when writing the previous blog post was not fully up to date, but the Commission has another web page dedicated to these instruments for economic reform and peer review. NRPs may be available in the national language(s) before the translations are published.
***
Commission web page
Under the theme of Growth and Jobs, the European Commission offers links to the updated National Reform Programmes on the web page Action plans and updated National Reform Programmes (2008–2010). Most of the new documents are from October 2008:
http://ec.europa.eu/growthandjobs/national-dimension/member-states-2008-2010-reports/index_en.htm
***
Updated National Reform Programmes 2008–2010
The NPRs are usually available in the national language(s), but I looked primarily for English translations which facilitate multilateral learning within the EU framework.
With the help of the Commission web page I found updated NRPs in English from the following EU member states: Austria (47 pages), Bulgaria (28 pages, plus Action Plan 37 pages), the Czech Republic (85 pages), Denmark (117 pages), Estonia (115 pages), Finland (117 pages), France (75 pages), Germany (76 pages), Greece (88 pages), Hungary (169 pages), Ireland (97 pages), Latvia (137 pages), Lithuania (67 pages), Malta (101 pages), Portugal (343 pages), Romania (Report 160 pages plus Action Plan 15 pages), Slovakia (46 pages), Slovenia (130 pages), Spain (225 pages), the Netherlands (76 pages), Sweden (128 pages) and the United Kingdom (44 pages).
***
Belgium
Although the Commission web page had links to the French and Dutch versions of the NPR of Belgium, and English translation is available.
Belgium’s Lisbon Strategy National Reform Programme 2008–2010 (October 2008; 142 pages) is available at:
http://www.be2010.eu/admin/uploaded/200811051451510.NRP2008_ENweb.pdf
***
Other languages
German: Of the more commonly used EU languages, both Austria’s and Germany’s NPRs are naturally available in German.
In Italian: The NPR of Italy (98 pages) seems to be available only in Italian.
French: The Luxembourg (67 pages) seems to be available only in French. Naturally, Belgium and France present French versions.
Dutch: Both Belgium and the Netherlands have NPRs in Dutch.
***
Quantity and quality?
The programmes follow common basic patterns, but the weighting between reporting elements and plans for new reforms vary. The number of pages is not an indication of quality of actions taken or planned, but a quantitative measure of the formidable reading task ahead of Community and ministry officials, who want to mine the documents for good ideas.
***
Missing National Reform Programmes?
I failed to find updated NPRs from Cyprus and from Poland.
Perhaps one of our readers has additional information.
***
Open coordination
The Lisbon Strategy (including the employment aims) is an example of the open method of coordination. The intensive contacts within the European Union make it into the world’s largest learning organisation.
Hopefully, this bodes better for the second half of the Lisbon Strategy and for the post-Lisbon reform strategy, than it did during the first five years from 2000.
Ralf Grahn
***
Commission web page
Under the theme of Growth and Jobs, the European Commission offers links to the updated National Reform Programmes on the web page Action plans and updated National Reform Programmes (2008–2010). Most of the new documents are from October 2008:
http://ec.europa.eu/growthandjobs/national-dimension/member-states-2008-2010-reports/index_en.htm
***
Updated National Reform Programmes 2008–2010
The NPRs are usually available in the national language(s), but I looked primarily for English translations which facilitate multilateral learning within the EU framework.
With the help of the Commission web page I found updated NRPs in English from the following EU member states: Austria (47 pages), Bulgaria (28 pages, plus Action Plan 37 pages), the Czech Republic (85 pages), Denmark (117 pages), Estonia (115 pages), Finland (117 pages), France (75 pages), Germany (76 pages), Greece (88 pages), Hungary (169 pages), Ireland (97 pages), Latvia (137 pages), Lithuania (67 pages), Malta (101 pages), Portugal (343 pages), Romania (Report 160 pages plus Action Plan 15 pages), Slovakia (46 pages), Slovenia (130 pages), Spain (225 pages), the Netherlands (76 pages), Sweden (128 pages) and the United Kingdom (44 pages).
***
Belgium
Although the Commission web page had links to the French and Dutch versions of the NPR of Belgium, and English translation is available.
Belgium’s Lisbon Strategy National Reform Programme 2008–2010 (October 2008; 142 pages) is available at:
http://www.be2010.eu/admin/uploaded/200811051451510.NRP2008_ENweb.pdf
***
Other languages
German: Of the more commonly used EU languages, both Austria’s and Germany’s NPRs are naturally available in German.
In Italian: The NPR of Italy (98 pages) seems to be available only in Italian.
French: The Luxembourg (67 pages) seems to be available only in French. Naturally, Belgium and France present French versions.
Dutch: Both Belgium and the Netherlands have NPRs in Dutch.
***
Quantity and quality?
The programmes follow common basic patterns, but the weighting between reporting elements and plans for new reforms vary. The number of pages is not an indication of quality of actions taken or planned, but a quantitative measure of the formidable reading task ahead of Community and ministry officials, who want to mine the documents for good ideas.
***
Missing National Reform Programmes?
I failed to find updated NPRs from Cyprus and from Poland.
Perhaps one of our readers has additional information.
***
Open coordination
The Lisbon Strategy (including the employment aims) is an example of the open method of coordination. The intensive contacts within the European Union make it into the world’s largest learning organisation.
Hopefully, this bodes better for the second half of the Lisbon Strategy and for the post-Lisbon reform strategy, than it did during the first five years from 2000.
Ralf Grahn
EU employment: Policy coordination and guidelines
The economic recession and the financial crisis threaten the EC (EU) goal of a high level of employment. The focus has shifted from the more or less coordinated national financial rescue packages to efforts to act coherently in the face of the downturn. How European is the response going to be and how much substance will it have?
At the treaty level there are fairly well-oiled procedures in place for the coordination of economic policies and employment policies, but how will the routines adapt to the deteriorating situation?
The European Council and the Council are the main European Union level players coordinating member states’ employment policies. Soft instruments – conclusions, guidelines, recommendations and reports – are used. The member states prepare national plans and annual employment reports. The Commission acts mainly in a supporting role, collating and cajoling.
***
Current TEC
The current Article 128 (ex Article 109q) of the Treaty establishing the European Community (TEC), under the Title VIII Employment, sets out the choreography for the coordination of member states’ employment policies.
At the summit of these intergovernmental proceedings is the annual spring (March) European Council, dedicated to economic policy and reform issues. The European Council adopts conclusions based on a joint report by the Council and the Commission.
The Council then, after consultations, draws up employment guidelines consistent with the broad economic policy guidelines (BPEGs) for the member states.
Each member state presents an annual report on implementation.
The national reports are examined by the Council, which may make recommendations to the member state.
The Council and the Commission prepare a joint report on the employment situation and the implementation of the employment guidelines.
The existing Article 126 TEC (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/102–103):
Article 128 TEC
1. The European Council shall each year consider the employment situation in the Community and adopt conclusions thereon, on the basis of a joint annual report by the Council and the Commission.
2. On the basis of the conclusions of the European Council, the Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament, the Economic and Social Committee, the Committee of the Regions and the Employment Committee referred to in Article 130, shall each year draw up guidelines which the Member States shall take into account in their employment policies. These guidelines shall be consistent with the broad guidelines adopted pursuant to Article 99(2).
3. Each Member State shall provide the Council and the Commission with an annual report on the principal measures taken to implement its employment policy in the light of the guidelines for employment as referred to in paragraph 2.
4. The Council, on the basis of the reports referred to in paragraph 3 and having received the views of the Employment Committee, shall each year carry out an examination of the implementation of the employment policies of the Member States in the light of the guidelines for employment. The Council, acting by a qualified majority on a recommendation from the Commission, may, if it considers it appropriate in the light of that examination, make recommendations to Member States.
5. On the basis of the results of that examination, the Council and the Commission shall make a joint annual report to the European Council on the employment situation in the Community and on the implementation of the guidelines for employment.
***
Original Lisbon Treaty
The Treaty of Lisbon (ToL) is still on its rocky road to possible entry into force, but in many instances it is the most up-to-date manifestation of what the member state governments want the treaties to say.
But the treaty reform process, at least since the Treaty of Nice, has been focused on so called institutional innovations. With a few notable exceptions, most areas of Community policy have only been updated and adjusted technically to the different reform treaty versions: the draft Constitution, the Constitutional Treaty and the Lisbon Treaty.
Thus, the changes to the Title on employment in the Lisbon Treaty are minimal. Article 2, point 111 deleted a few words from Article 125 TEC and the following point (112) concerned the common commercial policy.
Consequently, Article 126 TEC and the following ones underwent only horizontal or technical amendments (OJ 17.12.2007 C 306/79). In Article 128 the ‘Community’ was replaced by the ‘Union’ and the referrals to other treaty provisions adjusted.
***
Renumbering
The Table of equivalences of the original Treaty of Lisbon tells us that Title VIII Employment was to be renumbered Title IX and that Article 128 TEC and TFEU (ToL) was to be renumbered Article 148 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/214).
***
Consolidated Lisbon Treaty
Article 148 of the Treaty on the Functioning of the European Union (TFEU) takes over the contents of the existing Article 128 TEC with the minimal change in terminology and the renumbering noted above.
As a consequence, the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/112, looks like this:
TITLE IX
EMPLOYMENT
Article 148 TFEU
(ex Article 128 TEC)
1. The European Council shall each year consider the employment situation in the Union and adopt conclusions thereon, on the basis of a joint annual report by the Council and the Commission.
2. On the basis of the conclusions of the European Council, the Council, on a proposal from the Commission and after consulting the European Parliament, the Economic and Social Committee, the Committee of the Regions and the Employment Committee referred to in Article 150, shall each year draw up guidelines which the Member States shall take into account in their employment policies. These guidelines shall be consistent with the broad guidelines adopted pursuant to Article 121(2).
3. Each Member State shall provide the Council and the Commission with an annual report on the principal measures taken to implement its employment policy in the light of the guidelines for employment as referred to in paragraph 2.
4. The Council, on the basis of the reports referred to in paragraph 3 and having received the views of the Employment Committee, shall each year carry out an examination of the implementation of the employment policies of the Member States in the light of the guidelines for employment. The Council, on a recommendation from the Commission, may, if it considers it appropriate in the light of that examination, make recommendations to Member States.
5. On the basis of the results of that examination, the Council and the Commission shall make a joint annual report to the European Council on the employment situation in the Union and on the implementation of the guidelines for employment.
***
Employment policy coordination
Readers interested in the practical side of the European employment strategy can start with the Introduction and the links offered by the European Commission’s DG Employment and Social Affairs:
http://ec.europa.eu/employment_social/employment_strategy/index_en.htm
Roughly, European Community (European Union) action could be described as a mandatory planning, implementing and evaluating exercise using soft tools like open coordination, ‘best practices’ etc.
Even if the TEC partly reflects different sector views, the practical approach has evolved into a more holistic one knitting together economic, employment, innovation as well as research and education policy issues under the relaunched Lisbon Strategy for Growth and Jobs.
***
European Council Conclusions
The economic and employment guidelines (BEPGs and Employment Guidelines), the main focus of the spring European Council, have been integrated and subsumed under the relaunched Lisbon strategy for growth and jobs, but essentially adopted without change for a second three year period (2008–2010) last spring.
The first ten pages of the revised Presidency Conclusions of the European Council 13–14 March 2008, including the references to the National Reform Programmes and the Integrated Guidelines for Growth and Jobs, are available as a gateway to understanding the system and the state of play (Council document 7652/1/08 REV 1):
http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ec/99410.pdf
Cf. Article 128(1) TEC and Article 148(1) TFEU.
Legally, the Council preparing and following up is one Community institution, but a number of Council formations participate directly in the process or at least want to make their views known: ECOFIN, EPSCO, the Competitiveness Council, Education/Training and Youth.
***
Joint employment report
The European Council Conclusions are based on the joint annual report by the Council and the Commission, mentioned in paragraphs 1 and 5 of Article 128 TEC and Article 148 TFEU.
The Joint Employment Report 2007/2008 (Council document 7169/08; 16 pages) is a bit more specific than the European Council Conclusions. This latest version is available at:
http://register.consilium.europa.eu/pdf/en/08/st07/st07169.en08.pdf
***
Council employment guidelines
After consulting the European Parliament, the Economic and Social Committee, the Committee of the Regions and the Employment Committee, the Council adopts annual employment guidelines, based on the European Council Conclusions and a proposal by the Commission. (Cf. paragraph 2 of Article 128 TEC and Article 148 TFEU.)
The Council decision on guidelines for the employment policies of the Member States (Council document of 7 July 2008 10614/2/08 REV 2; 24 pages) is accessible at:
http://register.consilium.europa.eu/pdf/en/08/st10/st10614-re02.en08.pdf
***
National employment reports – National Reform Programmes – Lisbon strategy
Each member state delivers a national employment report annually, as laid out in paragraph 3 of Article 128 TEC and Article 148 TFEU.
At this point in time, the Commission web site has on offer the page Member States’ autumn 2007 reports on the implementation of their National Reform Programmes, with links to the national employment reports. In practice, they are both reporting and planning documents, where the planning part constitutes a development with regard to the treaty provision:
http://ec.europa.eu/growthandjobs/national-dimension/member-states-autumn-2007-reports/index_en.htm
The 2008 round of (Lisbon strategy) progress reports is well advanced, so the interested reader might find more up-to-date information on the National Reform Programmes by checking national government sites. (English translations are or will be available in many member states.)
***
Country-specific recommendations
The examination of the national employment reports is a mandatory part of the annual employment coordination cycle, but the Council has the option to issue recommendations to member states. Cf. paragraph 4 of Article 128 TEC and Article 148 TFEU.
Ahead of the spring European Council, the Council addressed the following Country-specific Integrated Recommendations to the European Council (4 March 2008, document 7275/08; 58 pages):
http://register.consilium.europa.eu/pdf/en/08/st07/st07275.en08.pdf
***
Employment in Europe 2008 Report
A separate exercise, but with a wealth of background information, is the Commission’s annual employment report Employment in Europe.
On 18 November 2008 the Commission published its twentieth annual Employment in Europe 2008 Report (292 pages), accessible through:
http://ec.europa.eu/social/main.jsp?langId=sv&catId=89&newsId=415
According to the Commission, the Employment in Europe 2008 Report addresses topics that are high on the European Union's employment policy agenda. It gives a comprehensive overview of the employment situation in the EU, as well as an analysis of key labour market issues, including immigration, post-enlargement intra-EU labour mobility, quality of work and the link between education and employment.
For a quick overview, read the Commission’s MEMO/08/719 Employment in Europe:
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/719&format=HTML&aged=0&language=EN&guiLanguage=en
At the publication of the 2008 Employment in Europe Report the Commission highlighted labour immigration into the European Union and mobility of the workforce within the EU, so these questions were reflected in the media reports.
Ralf Grahn
At the treaty level there are fairly well-oiled procedures in place for the coordination of economic policies and employment policies, but how will the routines adapt to the deteriorating situation?
The European Council and the Council are the main European Union level players coordinating member states’ employment policies. Soft instruments – conclusions, guidelines, recommendations and reports – are used. The member states prepare national plans and annual employment reports. The Commission acts mainly in a supporting role, collating and cajoling.
***
Current TEC
The current Article 128 (ex Article 109q) of the Treaty establishing the European Community (TEC), under the Title VIII Employment, sets out the choreography for the coordination of member states’ employment policies.
At the summit of these intergovernmental proceedings is the annual spring (March) European Council, dedicated to economic policy and reform issues. The European Council adopts conclusions based on a joint report by the Council and the Commission.
The Council then, after consultations, draws up employment guidelines consistent with the broad economic policy guidelines (BPEGs) for the member states.
Each member state presents an annual report on implementation.
The national reports are examined by the Council, which may make recommendations to the member state.
The Council and the Commission prepare a joint report on the employment situation and the implementation of the employment guidelines.
The existing Article 126 TEC (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/102–103):
Article 128 TEC
1. The European Council shall each year consider the employment situation in the Community and adopt conclusions thereon, on the basis of a joint annual report by the Council and the Commission.
2. On the basis of the conclusions of the European Council, the Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament, the Economic and Social Committee, the Committee of the Regions and the Employment Committee referred to in Article 130, shall each year draw up guidelines which the Member States shall take into account in their employment policies. These guidelines shall be consistent with the broad guidelines adopted pursuant to Article 99(2).
3. Each Member State shall provide the Council and the Commission with an annual report on the principal measures taken to implement its employment policy in the light of the guidelines for employment as referred to in paragraph 2.
4. The Council, on the basis of the reports referred to in paragraph 3 and having received the views of the Employment Committee, shall each year carry out an examination of the implementation of the employment policies of the Member States in the light of the guidelines for employment. The Council, acting by a qualified majority on a recommendation from the Commission, may, if it considers it appropriate in the light of that examination, make recommendations to Member States.
5. On the basis of the results of that examination, the Council and the Commission shall make a joint annual report to the European Council on the employment situation in the Community and on the implementation of the guidelines for employment.
***
Original Lisbon Treaty
The Treaty of Lisbon (ToL) is still on its rocky road to possible entry into force, but in many instances it is the most up-to-date manifestation of what the member state governments want the treaties to say.
But the treaty reform process, at least since the Treaty of Nice, has been focused on so called institutional innovations. With a few notable exceptions, most areas of Community policy have only been updated and adjusted technically to the different reform treaty versions: the draft Constitution, the Constitutional Treaty and the Lisbon Treaty.
Thus, the changes to the Title on employment in the Lisbon Treaty are minimal. Article 2, point 111 deleted a few words from Article 125 TEC and the following point (112) concerned the common commercial policy.
Consequently, Article 126 TEC and the following ones underwent only horizontal or technical amendments (OJ 17.12.2007 C 306/79). In Article 128 the ‘Community’ was replaced by the ‘Union’ and the referrals to other treaty provisions adjusted.
***
Renumbering
The Table of equivalences of the original Treaty of Lisbon tells us that Title VIII Employment was to be renumbered Title IX and that Article 128 TEC and TFEU (ToL) was to be renumbered Article 148 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/214).
***
Consolidated Lisbon Treaty
Article 148 of the Treaty on the Functioning of the European Union (TFEU) takes over the contents of the existing Article 128 TEC with the minimal change in terminology and the renumbering noted above.
As a consequence, the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/112, looks like this:
TITLE IX
EMPLOYMENT
Article 148 TFEU
(ex Article 128 TEC)
1. The European Council shall each year consider the employment situation in the Union and adopt conclusions thereon, on the basis of a joint annual report by the Council and the Commission.
2. On the basis of the conclusions of the European Council, the Council, on a proposal from the Commission and after consulting the European Parliament, the Economic and Social Committee, the Committee of the Regions and the Employment Committee referred to in Article 150, shall each year draw up guidelines which the Member States shall take into account in their employment policies. These guidelines shall be consistent with the broad guidelines adopted pursuant to Article 121(2).
3. Each Member State shall provide the Council and the Commission with an annual report on the principal measures taken to implement its employment policy in the light of the guidelines for employment as referred to in paragraph 2.
4. The Council, on the basis of the reports referred to in paragraph 3 and having received the views of the Employment Committee, shall each year carry out an examination of the implementation of the employment policies of the Member States in the light of the guidelines for employment. The Council, on a recommendation from the Commission, may, if it considers it appropriate in the light of that examination, make recommendations to Member States.
5. On the basis of the results of that examination, the Council and the Commission shall make a joint annual report to the European Council on the employment situation in the Union and on the implementation of the guidelines for employment.
***
Employment policy coordination
Readers interested in the practical side of the European employment strategy can start with the Introduction and the links offered by the European Commission’s DG Employment and Social Affairs:
http://ec.europa.eu/employment_social/employment_strategy/index_en.htm
Roughly, European Community (European Union) action could be described as a mandatory planning, implementing and evaluating exercise using soft tools like open coordination, ‘best practices’ etc.
Even if the TEC partly reflects different sector views, the practical approach has evolved into a more holistic one knitting together economic, employment, innovation as well as research and education policy issues under the relaunched Lisbon Strategy for Growth and Jobs.
***
European Council Conclusions
The economic and employment guidelines (BEPGs and Employment Guidelines), the main focus of the spring European Council, have been integrated and subsumed under the relaunched Lisbon strategy for growth and jobs, but essentially adopted without change for a second three year period (2008–2010) last spring.
The first ten pages of the revised Presidency Conclusions of the European Council 13–14 March 2008, including the references to the National Reform Programmes and the Integrated Guidelines for Growth and Jobs, are available as a gateway to understanding the system and the state of play (Council document 7652/1/08 REV 1):
http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ec/99410.pdf
Cf. Article 128(1) TEC and Article 148(1) TFEU.
Legally, the Council preparing and following up is one Community institution, but a number of Council formations participate directly in the process or at least want to make their views known: ECOFIN, EPSCO, the Competitiveness Council, Education/Training and Youth.
***
Joint employment report
The European Council Conclusions are based on the joint annual report by the Council and the Commission, mentioned in paragraphs 1 and 5 of Article 128 TEC and Article 148 TFEU.
The Joint Employment Report 2007/2008 (Council document 7169/08; 16 pages) is a bit more specific than the European Council Conclusions. This latest version is available at:
http://register.consilium.europa.eu/pdf/en/08/st07/st07169.en08.pdf
***
Council employment guidelines
After consulting the European Parliament, the Economic and Social Committee, the Committee of the Regions and the Employment Committee, the Council adopts annual employment guidelines, based on the European Council Conclusions and a proposal by the Commission. (Cf. paragraph 2 of Article 128 TEC and Article 148 TFEU.)
The Council decision on guidelines for the employment policies of the Member States (Council document of 7 July 2008 10614/2/08 REV 2; 24 pages) is accessible at:
http://register.consilium.europa.eu/pdf/en/08/st10/st10614-re02.en08.pdf
***
National employment reports – National Reform Programmes – Lisbon strategy
Each member state delivers a national employment report annually, as laid out in paragraph 3 of Article 128 TEC and Article 148 TFEU.
At this point in time, the Commission web site has on offer the page Member States’ autumn 2007 reports on the implementation of their National Reform Programmes, with links to the national employment reports. In practice, they are both reporting and planning documents, where the planning part constitutes a development with regard to the treaty provision:
http://ec.europa.eu/growthandjobs/national-dimension/member-states-autumn-2007-reports/index_en.htm
The 2008 round of (Lisbon strategy) progress reports is well advanced, so the interested reader might find more up-to-date information on the National Reform Programmes by checking national government sites. (English translations are or will be available in many member states.)
***
Country-specific recommendations
The examination of the national employment reports is a mandatory part of the annual employment coordination cycle, but the Council has the option to issue recommendations to member states. Cf. paragraph 4 of Article 128 TEC and Article 148 TFEU.
Ahead of the spring European Council, the Council addressed the following Country-specific Integrated Recommendations to the European Council (4 March 2008, document 7275/08; 58 pages):
http://register.consilium.europa.eu/pdf/en/08/st07/st07275.en08.pdf
***
Employment in Europe 2008 Report
A separate exercise, but with a wealth of background information, is the Commission’s annual employment report Employment in Europe.
On 18 November 2008 the Commission published its twentieth annual Employment in Europe 2008 Report (292 pages), accessible through:
http://ec.europa.eu/social/main.jsp?langId=sv&catId=89&newsId=415
According to the Commission, the Employment in Europe 2008 Report addresses topics that are high on the European Union's employment policy agenda. It gives a comprehensive overview of the employment situation in the EU, as well as an analysis of key labour market issues, including immigration, post-enlargement intra-EU labour mobility, quality of work and the link between education and employment.
For a quick overview, read the Commission’s MEMO/08/719 Employment in Europe:
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/719&format=HTML&aged=0&language=EN&guiLanguage=en
At the publication of the 2008 Employment in Europe Report the Commission highlighted labour immigration into the European Union and mobility of the workforce within the EU, so these questions were reflected in the media reports.
Ralf Grahn
Wednesday, 26 November 2008
EU employment: European Community powers
Powers not conferred upon (attributed to) the European Community (EC) belong to the member states, and Community action shall anyway clear the tests of subsidiarity and proportionality, but in the case of the aim of a high level of employment the high contracting parties have decided to further underline their leading role by limiting the scope for EC action.
In this post we look at the basic structure of member state and European Community (European Union) competences concerning employment. Later posts can then turn to the concrete EC (EU) actions intended under the Title Employment in the existing Treaty establishing the European Community and the Treaty of Lisbon (Treaty on the Functioning of the European Union).
***
Current TEC
The current Article 127 (ex Article 109p) of the Treaty establishing the European Community (TEC), under the Title VIII Employment, essentially reiterates both the general employment aim – a high level of employment – and the restricted role of the European Community (European Union) in achieving this objective following from other treaty provisions.
The European Community (EC) shall contribute to a high level of employment, but the employment policies are ‘owned’ by the member states.
The EC encourages cooperation between member states.
The EC – if necessary – complements member states’ action.
Not content with the expression of conferred or attributed powers and the principles of subsidiarity and necessity (proportionality) in Article 5 TEC, the high contracting parties remind us in Article 127(1) TEC that the competences of the member states shall be respected.
Article 127(2) TEC sets out the horizontal character of employment-related policies, although the objective of a high level of employment with a fairly weak expression shall be ‘taken into consideration’ when EC policies and activities are formulated and implemented.
The existing Article 126 TEC (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/102):
Article 127 TEC
1. The Community shall contribute to a high level of employment by encouraging cooperation between Member States and by supporting and, if necessary, complementing their action. In doing so, the competences of the Member States shall be respected.
2. The objective of a high level of employment shall be taken into consideration in the formulation and implementation of Community policies and activities.
***
Original Lisbon Treaty
The Treaty of Lisbon (ToL) is still on its rocky road to possible entry into force, but in many instances it is the most up-to-date manifestation of what the member state governments want the treaties to say.
But the treaty reform process, at least since the Treaty of Nice, has been focused on so called institutional innovations. With a few notable exceptions, most areas of Community policy have only been updated and adjusted technically to the different reform treaty versions: the draft Constitution, the Constitutional Treaty and the Lisbon Treaty.
Thus, the changes to the Title on employment in the Lisbon Treaty are minimal. Article 2, point 111 deleted a few words from Article 125 TEC and the following point (112) concerned the common commercial policy.
Consequently, Article 126 TEC and the following ones underwent only horizontal or technical amendments (OJ 17.12.2007 C 306/79). In both paragraphs of Article 127 the ‘Community’ was replaced by the ‘Union’.
***
Renumbering
The Table of equivalences of the original Treaty of Lisbon tells us that Title VIII Employment was to be renumbered Title IX and that Article 127 TEC and TFEU (ToL) was to be renumbered Article 147 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/214).
***
Consolidated Lisbon Treaty
Article 147 of the Treaty on the Functioning of the European Union (TFEU) takes over the contents of the existing Article 127 TEC with the minimal change in terminology and the renumbering noted above.
As a consequence, the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/112, looks like this:
TITLE IX
EMPLOYMENT
Article 147 TFEU
(ex Article 127 TEC)
1. The Union shall contribute to a high level of employment by encouraging cooperation between Member States and by supporting and, if necessary, complementing their action. In doing so, the competences of the Member States shall be respected.
2. The objective of a high level of employment shall be taken into consideration in the formulation and implementation of Union policies and activities.
***
Employment policy coordination
Readers interested in the practical side of the European employment strategy can start with the Introduction and the links offered by the European Commission’s DG Employment and Social Affairs:
http://ec.europa.eu/employment_social/employment_strategy/index_en.htm
***
Integrated guidelines – Lisbon strategy for growth and jobs
The economic and employment guidelines (BEPGs and Employment Guidelines), the main focus of the spring European Council, have been integrated and subsumed under the relaunched Lisbon strategy for growth and jobs, but essentially adopted without change for a second three year period (2008–2010) last spring.
The first ten pages of the revised Presidency Conclusions of the European Council 13–14 March 2008, including the references to the National Reform Programmes and the Integrated Guidelines for Growth and Jobs, are available as a gateway to understanding the system and the state of play (Council document 7652/1/08 REV 1):
http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ec/99410.pdf
(The following stage, for someone digging deeper, would be to look for formal adoption by the Council in its ECOFIN and EPSCO formations.)
***
Employment in Europe 2008 Report
A wealth of information is contained in the Commission’s annual employment reports.
On 18 November 2008 the Commission published its twentieth annual employment report, Employment in Europe 2008 (292 pages), accessible through:
http://ec.europa.eu/social/main.jsp?langId=sv&catId=89&newsId=415
According to the Commission, the Employment in Europe 2008 Report addresses topics that are high on the European Union's employment policy agenda. It gives a comprehensive overview of the employment situation in the EU, as well as an analysis of key labour market issues, including immigration, post-enlargement intra-EU labour mobility, quality of work and the link between education and employment.
For a quick overview, read the Commission’s MEMO/08/719 Employment in Europe:
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/719&format=HTML&aged=0&language=EN&guiLanguage=en
At the publication of the 2008 Employment in Europe Report the Commission highlighted labour immigration into the European Union and mobility of the workforce within the EU, so these questions were reflected in the media reports.
Ralf Grahn
In this post we look at the basic structure of member state and European Community (European Union) competences concerning employment. Later posts can then turn to the concrete EC (EU) actions intended under the Title Employment in the existing Treaty establishing the European Community and the Treaty of Lisbon (Treaty on the Functioning of the European Union).
***
Current TEC
The current Article 127 (ex Article 109p) of the Treaty establishing the European Community (TEC), under the Title VIII Employment, essentially reiterates both the general employment aim – a high level of employment – and the restricted role of the European Community (European Union) in achieving this objective following from other treaty provisions.
The European Community (EC) shall contribute to a high level of employment, but the employment policies are ‘owned’ by the member states.
The EC encourages cooperation between member states.
The EC – if necessary – complements member states’ action.
Not content with the expression of conferred or attributed powers and the principles of subsidiarity and necessity (proportionality) in Article 5 TEC, the high contracting parties remind us in Article 127(1) TEC that the competences of the member states shall be respected.
Article 127(2) TEC sets out the horizontal character of employment-related policies, although the objective of a high level of employment with a fairly weak expression shall be ‘taken into consideration’ when EC policies and activities are formulated and implemented.
The existing Article 126 TEC (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/102):
Article 127 TEC
1. The Community shall contribute to a high level of employment by encouraging cooperation between Member States and by supporting and, if necessary, complementing their action. In doing so, the competences of the Member States shall be respected.
2. The objective of a high level of employment shall be taken into consideration in the formulation and implementation of Community policies and activities.
***
Original Lisbon Treaty
The Treaty of Lisbon (ToL) is still on its rocky road to possible entry into force, but in many instances it is the most up-to-date manifestation of what the member state governments want the treaties to say.
But the treaty reform process, at least since the Treaty of Nice, has been focused on so called institutional innovations. With a few notable exceptions, most areas of Community policy have only been updated and adjusted technically to the different reform treaty versions: the draft Constitution, the Constitutional Treaty and the Lisbon Treaty.
Thus, the changes to the Title on employment in the Lisbon Treaty are minimal. Article 2, point 111 deleted a few words from Article 125 TEC and the following point (112) concerned the common commercial policy.
Consequently, Article 126 TEC and the following ones underwent only horizontal or technical amendments (OJ 17.12.2007 C 306/79). In both paragraphs of Article 127 the ‘Community’ was replaced by the ‘Union’.
***
Renumbering
The Table of equivalences of the original Treaty of Lisbon tells us that Title VIII Employment was to be renumbered Title IX and that Article 127 TEC and TFEU (ToL) was to be renumbered Article 147 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/214).
***
Consolidated Lisbon Treaty
Article 147 of the Treaty on the Functioning of the European Union (TFEU) takes over the contents of the existing Article 127 TEC with the minimal change in terminology and the renumbering noted above.
As a consequence, the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/112, looks like this:
TITLE IX
EMPLOYMENT
Article 147 TFEU
(ex Article 127 TEC)
1. The Union shall contribute to a high level of employment by encouraging cooperation between Member States and by supporting and, if necessary, complementing their action. In doing so, the competences of the Member States shall be respected.
2. The objective of a high level of employment shall be taken into consideration in the formulation and implementation of Union policies and activities.
***
Employment policy coordination
Readers interested in the practical side of the European employment strategy can start with the Introduction and the links offered by the European Commission’s DG Employment and Social Affairs:
http://ec.europa.eu/employment_social/employment_strategy/index_en.htm
***
Integrated guidelines – Lisbon strategy for growth and jobs
The economic and employment guidelines (BEPGs and Employment Guidelines), the main focus of the spring European Council, have been integrated and subsumed under the relaunched Lisbon strategy for growth and jobs, but essentially adopted without change for a second three year period (2008–2010) last spring.
The first ten pages of the revised Presidency Conclusions of the European Council 13–14 March 2008, including the references to the National Reform Programmes and the Integrated Guidelines for Growth and Jobs, are available as a gateway to understanding the system and the state of play (Council document 7652/1/08 REV 1):
http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ec/99410.pdf
(The following stage, for someone digging deeper, would be to look for formal adoption by the Council in its ECOFIN and EPSCO formations.)
***
Employment in Europe 2008 Report
A wealth of information is contained in the Commission’s annual employment reports.
On 18 November 2008 the Commission published its twentieth annual employment report, Employment in Europe 2008 (292 pages), accessible through:
http://ec.europa.eu/social/main.jsp?langId=sv&catId=89&newsId=415
According to the Commission, the Employment in Europe 2008 Report addresses topics that are high on the European Union's employment policy agenda. It gives a comprehensive overview of the employment situation in the EU, as well as an analysis of key labour market issues, including immigration, post-enlargement intra-EU labour mobility, quality of work and the link between education and employment.
For a quick overview, read the Commission’s MEMO/08/719 Employment in Europe:
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/719&format=HTML&aged=0&language=EN&guiLanguage=en
At the publication of the 2008 Employment in Europe Report the Commission highlighted labour immigration into the European Union and mobility of the workforce within the EU, so these questions were reflected in the media reports.
Ralf Grahn
Tuesday, 25 November 2008
EU: Employment policies a common concern
Economic and employment policies are primarily carried out by the EU member states, but regarded as a matter of common concern and coordinated at European Union level.
We look at the treaty framework, the current treaty and the Treaty of Lisbon, before offering a few pointers about EU employment policies for further reading.
***
Current TEC
The current Article 126 (ex Article 109o) of the Treaty establishing the European Community (TEC), under the Title VIII Employment, sets out the member states’ employment policies as the primary means to achieve the strategic employment aims of the European Community (European Union).
But the member states do not act in a vacuum, regardless of each other or the European Community as a whole. Their actions are tempered or enhanced by the coordinated strategy for employment referred to in the preceding Article 125 TEC.
To the employment objectives mentioned in Article 125 TEC, Article 126 TEC adds action consistent with the broad economic policy guidelines adopted by the Council.
Where, pursuant to Article 99(1) TEC the economic policies of the member states are to be regarded as a common concern and coordinated within the Council, Article 126(2) TEC lays down an obligation for the member states to regard promoting employment as a common concern and to coordinate their employment actions within the Council, although with the somewhat unclear proviso that this takes place ‘having regard to national practices related to the responsibilities of management and labour’.
The existing Article 126 TEC (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/102):
Article 126 TEC
1. Member States, through their employment policies, shall contribute to the achievement of the objectives referred to in Article 125 in a way consistent with the broad guidelines of the economic policies of the Member States and of the Community adopted pursuant to Article 99(2).
2. Member States, having regard to national practices related to the responsibilities of management and labour, shall regard promoting employment as a matter of common concern and shall coordinate their action in this respect within the Council, in accordance with the provisions of Article 128.
***
Original Lisbon Treaty
The Treaty of Lisbon (ToL) is still on its rocky road to possible entry into force, but in many instances it is the most up-to-date manifestation of what the member state governments want the treaties to say.
The changes to the Title on employment were minimal. Article 2, point 111 deleted a few words from Article 125 TEC and the following point (112) concerned the common commercial policy. Thus, Article 126 TEC and the following ones underwent only horizontal or technical amendments (OJ 17.12.2007 C 306/79).
***
Renumbering
The Table of equivalences of the original Treaty of Lisbon tells us that Title VIII Employment was to be renumbered Title IX and that Article 126 TEC and TFEU (ToL) was to be renumbered Article 146 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/214).
***
Consolidated Lisbon Treaty
Article 146 of the Treaty on the Functioning of the European Union (TFEU) takes over the contents of the existing Article 126 TEC. The ‘Community’ is replace by the ‘Union’, according to the new terminology, and the Articles referred to have been adapted to the renumbering. See the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/112:
TITLE IX
EMPLOYMENT
Article 146 TFEU
(ex Article 126 TEC)
1. Member States, through their employment policies, shall contribute to the achievement of the objectives referred to in Article 145 in a way consistent with the broad guidelines of the economic policies of the Member States and of the Union adopted pursuant to Article 121(2).
2. Member States, having regard to national practices related to the responsibilities of management and labour, shall regard promoting employment as a matter of common concern and shall coordinate their action in this respect within the Council, in accordance with the provisions of Article 148.
***
Employment policy coordination
Readers interested in the practical side of the European employment strategy can start with the Introduction and the links offered by the European Commission’s DG Employment and Social Affairs:
http://ec.europa.eu/employment_social/employment_strategy/index_en.htm
***
Integrated guidelines – Lisbon strategy for growth and jobs
The economic and employment guidelines (BEPGs and Employment Guidelines), the main focus of the spring European Council, have been integrated and subsumed under the relaunched Lisbon strategy for growth and jobs, but essentially adopted without change for a second three year period (2008–2010) last spring.
The first ten pages of the revised Presidency Conclusions of the European Council 13–14 March 2008, including the references to the National Reform Programmes and the Integrated Guidelines for Growth and Jobs, are available as a gateway to understanding the system and the state of play (Council document 7652/1/08
REV 1):
http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ec/99410.pdf
(The following stage, for someone digging deeper, would be to look for formal adoption by the Council in its ECOFIN and EPSCO formations.)
***
Employment in Europe 2008 Report
A wealth of information is contained in the Commission’s annual employment reports.
On 18 October 2008 the Commission published its twentieth annual employment report, Employment in Europe 2008 (292 pages), accessible through:
http://ec.europa.eu/social/main.jsp?langId=sv&catId=89&newsId=415
Ralf Grahn
We look at the treaty framework, the current treaty and the Treaty of Lisbon, before offering a few pointers about EU employment policies for further reading.
***
Current TEC
The current Article 126 (ex Article 109o) of the Treaty establishing the European Community (TEC), under the Title VIII Employment, sets out the member states’ employment policies as the primary means to achieve the strategic employment aims of the European Community (European Union).
But the member states do not act in a vacuum, regardless of each other or the European Community as a whole. Their actions are tempered or enhanced by the coordinated strategy for employment referred to in the preceding Article 125 TEC.
To the employment objectives mentioned in Article 125 TEC, Article 126 TEC adds action consistent with the broad economic policy guidelines adopted by the Council.
Where, pursuant to Article 99(1) TEC the economic policies of the member states are to be regarded as a common concern and coordinated within the Council, Article 126(2) TEC lays down an obligation for the member states to regard promoting employment as a common concern and to coordinate their employment actions within the Council, although with the somewhat unclear proviso that this takes place ‘having regard to national practices related to the responsibilities of management and labour’.
The existing Article 126 TEC (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/102):
Article 126 TEC
1. Member States, through their employment policies, shall contribute to the achievement of the objectives referred to in Article 125 in a way consistent with the broad guidelines of the economic policies of the Member States and of the Community adopted pursuant to Article 99(2).
2. Member States, having regard to national practices related to the responsibilities of management and labour, shall regard promoting employment as a matter of common concern and shall coordinate their action in this respect within the Council, in accordance with the provisions of Article 128.
***
Original Lisbon Treaty
The Treaty of Lisbon (ToL) is still on its rocky road to possible entry into force, but in many instances it is the most up-to-date manifestation of what the member state governments want the treaties to say.
The changes to the Title on employment were minimal. Article 2, point 111 deleted a few words from Article 125 TEC and the following point (112) concerned the common commercial policy. Thus, Article 126 TEC and the following ones underwent only horizontal or technical amendments (OJ 17.12.2007 C 306/79).
***
Renumbering
The Table of equivalences of the original Treaty of Lisbon tells us that Title VIII Employment was to be renumbered Title IX and that Article 126 TEC and TFEU (ToL) was to be renumbered Article 146 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/214).
***
Consolidated Lisbon Treaty
Article 146 of the Treaty on the Functioning of the European Union (TFEU) takes over the contents of the existing Article 126 TEC. The ‘Community’ is replace by the ‘Union’, according to the new terminology, and the Articles referred to have been adapted to the renumbering. See the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/112:
TITLE IX
EMPLOYMENT
Article 146 TFEU
(ex Article 126 TEC)
1. Member States, through their employment policies, shall contribute to the achievement of the objectives referred to in Article 145 in a way consistent with the broad guidelines of the economic policies of the Member States and of the Union adopted pursuant to Article 121(2).
2. Member States, having regard to national practices related to the responsibilities of management and labour, shall regard promoting employment as a matter of common concern and shall coordinate their action in this respect within the Council, in accordance with the provisions of Article 148.
***
Employment policy coordination
Readers interested in the practical side of the European employment strategy can start with the Introduction and the links offered by the European Commission’s DG Employment and Social Affairs:
http://ec.europa.eu/employment_social/employment_strategy/index_en.htm
***
Integrated guidelines – Lisbon strategy for growth and jobs
The economic and employment guidelines (BEPGs and Employment Guidelines), the main focus of the spring European Council, have been integrated and subsumed under the relaunched Lisbon strategy for growth and jobs, but essentially adopted without change for a second three year period (2008–2010) last spring.
The first ten pages of the revised Presidency Conclusions of the European Council 13–14 March 2008, including the references to the National Reform Programmes and the Integrated Guidelines for Growth and Jobs, are available as a gateway to understanding the system and the state of play (Council document 7652/1/08
REV 1):
http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ec/99410.pdf
(The following stage, for someone digging deeper, would be to look for formal adoption by the Council in its ECOFIN and EPSCO formations.)
***
Employment in Europe 2008 Report
A wealth of information is contained in the Commission’s annual employment reports.
On 18 October 2008 the Commission published its twentieth annual employment report, Employment in Europe 2008 (292 pages), accessible through:
http://ec.europa.eu/social/main.jsp?langId=sv&catId=89&newsId=415
Ralf Grahn
Monday, 24 November 2008
Employment aims of EU
A high level of employment or even full employment can be seen as important aims of the European Union (European Community), but the real scope of action at European level requires a closer look at the treaties.
Outside circumstances and inter-related Community policies affect the employment levels, not only ‘employment policy’ in a narrow sense.
Economic, employment and social policies are mainly national (despite the single currency), so the European Community (European Union) is left with various coordinating tasks.
A coordinated strategy for employment is a task for the member states and the Community.
***
Current TEC
The current Article 125 (ex Article 109n) of the Treaty establishing the European Community (TEC) introduces Title VIII Employment by envisioning a coordinated strategy for employment and referring to treaty objectives (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/101):
TITLE VIII
EMPLOYMENT
Article 125 TEC
Member States and the Community shall, in accordance with this title, work towards developing a coordinated strategy for employment and particularly for promoting a skilled, trained and adaptable workforce and labour markets responsive to economic change with a view to achieving the objectives defined in Article 2 of the Treaty on European Union and in Article 2 of this Treaty.
***
Objectives TEU and TEC
Article 2 of the Treaty on European Union (TEU ) first mentions the objectives “to promote economic and social progress and a high level of employment”.
Article 2 of the Treaty establishing the European Community (TEC) gives the Community the task to promote a high level of employment:
Article 2 TEC
The Community shall have as its task, by establishing a common market and an economic and monetary union and by implementing common policies or activities referred to in Articles 3 and 4, to promote throughout the Community a harmonious, balanced and sustainable development of economic activities, a high level of employment and of social protection, equality between men and women, sustainable and non-inflationary growth, a high degree of competitiveness and convergence of economic performance, a high level of protection and improvement of the quality of the environment, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States.
***
Original Lisbon Treaty
The Treaty of Lisbon (ToL) is still on its rocky road to possible entry into force, but it is the most up-to-date manifestation of what the member state governments want the treaties to say.
We notice that there was no major explicit amendment to Article 125 TEC according to Article 2, point 111 of the original Lisbon Treaty (OJ 17.12.2007 C 306/79):
EMPLOYMENT
111) In Article 125, the words ‘and in Article 2 of this Treaty’ shall be deleted.
***
Renumbering
The Table of equivalences of the original Treaty of Lisbon tells us that Title VIII Employment was to be renumbered Title IX and that Article 125 TEC and TFEU (ToL) was to be renumbered Article 145 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/213).
***
Consolidated Lisbon Treaty
Article 66 of the Treaty on the Functioning of the European Union (TFEU) retains the current safeguard measures without substantial change. See the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/73:
TITLE IX
EMPLOYMENT
Article 145 TFEU
(ex Article 125 TEC)
Member States and the Union shall, in accordance with this Title, work towards developing a coordinated strategy for employment and particularly for promoting a skilled, trained and adaptable workforce and labour markets responsive to economic change with a view to achieving the objectives defined in Article 3 of the Treaty on European Union.
***
TEU objectives
Instead of ‘a high level of employment’, Article 3(3) TEU sets the EU ‘aiming at full employment’ in the Treaty of Lisbon (Reform Treaty), but it is better to see the words in context (OJ 9.5.2008 C 115/17):
Article 3(3) TEU
(ex Article 2 TEU)
-----.
3. The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance.
-----
***
Competence
Aiming at a high level of employment or even at full employment sounds very nice, but the level of employment is determined more by other policies and circumstances than by employment policy in a narrow sense.
What can the European Union (European Community) be expected to contribute to employment policy?
One of the nice things about the Lisbon Treaty is that it clarifies the different EU competences (powers).
Title I Categories and areas of Union competence of the Treaty on the Functioning of the European Union offers us the basic information about the role of the EU (EC). Article 2(3) TFEU evades naming employment under the three clear main categories: exclusive competence, shared competence and competence to support, coordinate or supplement.
The provision does not mention an EU (EC) employment policy. Instead, paragraph 3 speaks of member states’ policies. The member states are supposed to coordinate their economic and employment policies, with the EU’s role to be defined separately:
Article 2(3) TFEU
3. The Member States shall coordinate their economic and employment policies within arrangements as determined by this Treaty, which the Union shall have competence to provide.
***
Coordination of member states’ policies
Article 5 TFEU is a separate Article, which specifically mentions three related areas, where the member states coordinate their policies within the union (instead of including them among the policy areas for supporting, coordinating or supplementing actions in Article 6 TFEU):
Article 5 TFEU
1. The Member States shall coordinate their economic policies within the Union. To this end, the Council shall adopt measures, in particular broad guidelines for these policies.
Specific provisions shall apply to those Member States whose currency is the euro.
2. The Union shall take measures to ensure coordination of the employment policies of the Member States, in particular by defining guidelines for these policies.
3. The Union may take initiatives to ensure coordination of Member States' social policies.
***
Horizontal clause
A high level of employment appears in Article 9 TFEU, a horizontal provision affecting all EU policies and activities, in Title II Provisions having general application:
Article 9 TFEU
In defining and implementing its policies and activities, the Union shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health.
***
Employment policy
Readers interested in the practical side of the European employment strategy can start with the Introduction and the links offered by the European Commission’s DG Employment and Social Affairs:
http://ec.europa.eu/employment_social/employment_strategy/index_en.htm
Ralf Grahn
Outside circumstances and inter-related Community policies affect the employment levels, not only ‘employment policy’ in a narrow sense.
Economic, employment and social policies are mainly national (despite the single currency), so the European Community (European Union) is left with various coordinating tasks.
A coordinated strategy for employment is a task for the member states and the Community.
***
Current TEC
The current Article 125 (ex Article 109n) of the Treaty establishing the European Community (TEC) introduces Title VIII Employment by envisioning a coordinated strategy for employment and referring to treaty objectives (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/101):
TITLE VIII
EMPLOYMENT
Article 125 TEC
Member States and the Community shall, in accordance with this title, work towards developing a coordinated strategy for employment and particularly for promoting a skilled, trained and adaptable workforce and labour markets responsive to economic change with a view to achieving the objectives defined in Article 2 of the Treaty on European Union and in Article 2 of this Treaty.
***
Objectives TEU and TEC
Article 2 of the Treaty on European Union (TEU ) first mentions the objectives “to promote economic and social progress and a high level of employment”.
Article 2 of the Treaty establishing the European Community (TEC) gives the Community the task to promote a high level of employment:
Article 2 TEC
The Community shall have as its task, by establishing a common market and an economic and monetary union and by implementing common policies or activities referred to in Articles 3 and 4, to promote throughout the Community a harmonious, balanced and sustainable development of economic activities, a high level of employment and of social protection, equality between men and women, sustainable and non-inflationary growth, a high degree of competitiveness and convergence of economic performance, a high level of protection and improvement of the quality of the environment, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States.
***
Original Lisbon Treaty
The Treaty of Lisbon (ToL) is still on its rocky road to possible entry into force, but it is the most up-to-date manifestation of what the member state governments want the treaties to say.
We notice that there was no major explicit amendment to Article 125 TEC according to Article 2, point 111 of the original Lisbon Treaty (OJ 17.12.2007 C 306/79):
EMPLOYMENT
111) In Article 125, the words ‘and in Article 2 of this Treaty’ shall be deleted.
***
Renumbering
The Table of equivalences of the original Treaty of Lisbon tells us that Title VIII Employment was to be renumbered Title IX and that Article 125 TEC and TFEU (ToL) was to be renumbered Article 145 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/213).
***
Consolidated Lisbon Treaty
Article 66 of the Treaty on the Functioning of the European Union (TFEU) retains the current safeguard measures without substantial change. See the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/73:
TITLE IX
EMPLOYMENT
Article 145 TFEU
(ex Article 125 TEC)
Member States and the Union shall, in accordance with this Title, work towards developing a coordinated strategy for employment and particularly for promoting a skilled, trained and adaptable workforce and labour markets responsive to economic change with a view to achieving the objectives defined in Article 3 of the Treaty on European Union.
***
TEU objectives
Instead of ‘a high level of employment’, Article 3(3) TEU sets the EU ‘aiming at full employment’ in the Treaty of Lisbon (Reform Treaty), but it is better to see the words in context (OJ 9.5.2008 C 115/17):
Article 3(3) TEU
(ex Article 2 TEU)
-----.
3. The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance.
-----
***
Competence
Aiming at a high level of employment or even at full employment sounds very nice, but the level of employment is determined more by other policies and circumstances than by employment policy in a narrow sense.
What can the European Union (European Community) be expected to contribute to employment policy?
One of the nice things about the Lisbon Treaty is that it clarifies the different EU competences (powers).
Title I Categories and areas of Union competence of the Treaty on the Functioning of the European Union offers us the basic information about the role of the EU (EC). Article 2(3) TFEU evades naming employment under the three clear main categories: exclusive competence, shared competence and competence to support, coordinate or supplement.
The provision does not mention an EU (EC) employment policy. Instead, paragraph 3 speaks of member states’ policies. The member states are supposed to coordinate their economic and employment policies, with the EU’s role to be defined separately:
Article 2(3) TFEU
3. The Member States shall coordinate their economic and employment policies within arrangements as determined by this Treaty, which the Union shall have competence to provide.
***
Coordination of member states’ policies
Article 5 TFEU is a separate Article, which specifically mentions three related areas, where the member states coordinate their policies within the union (instead of including them among the policy areas for supporting, coordinating or supplementing actions in Article 6 TFEU):
Article 5 TFEU
1. The Member States shall coordinate their economic policies within the Union. To this end, the Council shall adopt measures, in particular broad guidelines for these policies.
Specific provisions shall apply to those Member States whose currency is the euro.
2. The Union shall take measures to ensure coordination of the employment policies of the Member States, in particular by defining guidelines for these policies.
3. The Union may take initiatives to ensure coordination of Member States' social policies.
***
Horizontal clause
A high level of employment appears in Article 9 TFEU, a horizontal provision affecting all EU policies and activities, in Title II Provisions having general application:
Article 9 TFEU
In defining and implementing its policies and activities, the Union shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health.
***
Employment policy
Readers interested in the practical side of the European employment strategy can start with the Introduction and the links offered by the European Commission’s DG Employment and Social Affairs:
http://ec.europa.eu/employment_social/employment_strategy/index_en.htm
Ralf Grahn
Sunday, 23 November 2008
EMU: Balance of payments crisis and safeguard measures
EU institutions, finance ministries, corporations and EU citizens have reason to study the possible remedies to serious balance of payments difficulties, in case matters take a turn to the worse.
“Living in interesting times” as regards international financial markets, it may be good to know that the current Treaty establishing the European Community (TEC) and the Treaty on the Functioning of the European Union (TFEU) foresee temporary safeguard measures to protect economic and monetary union (EMU) in exceptional circumstances.
There are separate transitional provisions for the EU member states with a derogation, i.e. outside the eurozone.
***
EMU safeguard measures
Current TEC
The European Community (European Union) prohibits all restrictions on the movement of capital and payments between member states and between member states and third countries, although abolishing existing restrictions with regard to third countries is a less absolute aim.
Within the context of economic and monetary union (EMU) restrictions are unthinkable, but in exceptional circumstances serious difficulties may give cause for temporary safeguard measures with regard to third countries.
The current Article 59 (ex Article 109i) of the Treaty establishing the European Community (TEC) is found in the latest consolidated version of the treaties (OJ 29.12.2006 C 321 E/65):
Article 59 TEC
Where, in exceptional circumstances, movements of capital to or from third countries cause, or threaten to cause, serious difficulties for the operation of economic and monetary union, the Council, acting by a qualified majority on a proposal from the Commission and after consulting the ECB, may take safeguard measures with regard to third countries for a period not exceeding six months if such measures are strictly necessary.
***
Lisbon Treaty
The Treaty of Lisbon, still on its rocky road to possible entry into force, is the most up-to-date manifestation of what the member state governments want the treaties to say.
Article 66 of the Treaty on the Functioning of the European Union (TFEU) retains the current safeguard measures without substantial change. See the concolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/73:
Part Three ‘Policies and internal actions of the Union’
Title IV TFEU (ex Title III) ‘Free movement of persons, services and capital’
Chapter 4 ‘Capital and payments’
Article 66 TFEU
(ex Article 59 TEC)
Where, in exceptional circumstances, movements of capital to or from third countries cause, or threaten to cause, serious difficulties for the operation of economic and monetary union, the Council, on a proposal from the Commission and after consulting the European Central Bank, may take safeguard measures with regard to third countries for a period not exceeding six months if such measures are strictly necessary.
***
Comment
We live “in interesting times” as regards the stability of the financial markets, so Article 59 TEC and Article 66 TFEU may be of more than purely theoretical interest.
The provision offers the EU possibilities to safeguard the operation of economic and monetary union (EMU) with regard to third countries.
These measures can not be taken lightly: ‘exceptional circumstances’, ‘serious difficulties’ and ‘strictly necessary’ all circumscribe recourse to such measures, which are contrary to the aims of free movement of capital and payments.
In addition, six months is the maximum duration of a measure (but the wording does not exclude a new decision).
***
Transitional provisions
There are still twelve EU member states outside the eurozone. Denmark and the United Kingdom have negotiated exceptions (opt-outs) unlimited in time. The other member states with a derogation are Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia (until 1 January 2009) and Sweden.
The transitional EMU provisions take account of potential balance of payments problems at two levels, serious problems and a sudden crisis.
***
Serious balance of payments difficulties
Existing TEC
Article 119 TEC (ex Article 109h) sets out the current rules, which illustrate how the problems of one member state may have repercussions for the rest, notably through the internal market and external trade (in relation to third countries).
Primarily, if a member state (with a derogation) is seriously threatened with balance of payments problems, the member state acts, within the provisions of the TEC, to remedy the situation. Then, the Commission investigates and may issue recommendations to the state.
If the actions are insufficient, the Commission can recommend that the Council grants mutual assistance to the member state in difficulties.
If mutual assistance is not granted, or if the assistance given and the measures taken prove to be insufficient, the Commission can authorise the member state to take (exceptional) protective measures. These are subject to ex post review by the Council.
The current Article 119 TEC (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/96-97):
Article 119 TEC
1. Where a Member State is in difficulties or is seriously threatened with difficulties as regards its balance of payments either as a result of an overall disequilibrium in its balance of payments, or as a result of the type of currency at its disposal, and where such difficulties are liable in particular to jeopardise the functioning of the common market or the progressive implementation of the common commercial policy, the Commission shall immediately investigate the position of the State in question and the action which, making use of all the means at its disposal, that State has taken or may take in accordance with the provisions of this Treaty. The Commission shall state what measures it recommends the State concerned to take.
If the action taken by a Member State and the measures suggested by the Commission do not prove sufficient to overcome the difficulties which have arisen or which threaten, the Commission shall, after consulting the Committee referred to in Article 114, recommend to the Council the granting of mutual assistance and appropriate methods therefor.
The Commission shall keep the Council regularly informed of the situation and of how it is developing.
2. The Council, acting by a qualified majority, shall grant such mutual assistance; it shall adopt directives or decisions laying down the conditions and details of such assistance, which may take such forms as:
(a) a concerted approach to or within any other international organisations to which Member States may have recourse;
(b) measures needed to avoid deflection of trade where the State which is in difficulties maintains or reintroduces quantitative restrictions against third countries;
(c) the granting of limited credits by other Member States, subject to their agreement.
3. If the mutual assistance recommended by the Commission is not granted by the Council or if the mutual assistance granted and the measures taken are insufficient, the Commission shall authorise the State which is in difficulties to take protective measures, the conditions and details of which the Commission shall determine.
Such authorisation may be revoked and such conditions and details may be changed by the Council acting by a qualified majority.
4. Subject to Article 122(6), this Article shall cease to apply from the beginning of the third stage.
***
Lisbon Treaty
Article 143 of the Treaty on the Functioning of the European Union (TFEU) takes over the substance of Article 119 TEC, but the updated wording more clearly presents the transitional character of the provision and that the provision concerns member states with a derogation.
Article 143 TFEU in the consolidated version of the Lisbon Treaty, OJ 9.5.2008 C 115/110-111:
Article 143 TFEU
(ex Article 119 TEC)
1. Where a Member State with a derogation is in difficulties or is seriously threatened with difficulties as regards its balance of payments either as a result of an overall disequilibrium in its balance of payments, or as a result of the type of currency at its disposal, and where such difficulties are liable in particular to jeopardise the functioning of the internal market or the implementation of the common commercial policy, the Commission shall immediately investigate the position of the State in question and the action which, making use of all the means at its disposal, that State has taken or may take in accordance with the provisions of the Treaties. The Commission shall state what measures it recommends the State concerned to take.
If the action taken by a Member State with a derogation and the measures suggested by the Commission do not prove sufficient to overcome the difficulties which have arisen or which threaten, the Commission shall, after consulting the Economic and Financial Committee, recommend to the Council the granting of mutual assistance and appropriate methods therefor.
The Commission shall keep the Council regularly informed of the situation and of how it is developing.
2. The Council shall grant such mutual assistance; it shall adopt directives or decisions laying down the conditions and details of such assistance, which may take such forms as:
(a) a concerted approach to or within any other international organisations to which Member States with a derogation may have recourse;
(b) measures needed to avoid deflection of trade where the Member State with a derogation which is in difficulties maintains or reintroduces quantitative restrictions against third countries;
(c) the granting of limited credits by other Member States, subject to their agreement.
3. If the mutual assistance recommended by the Commission is not granted by the Council or if the mutual assistance granted and the measures taken are insufficient, the Commission shall authorise the Member State with a derogation which is in difficulties to take protective measures, the conditions and details of which the Commission shall determine.
Such authorisation may be revoked and such conditions and details may be changed by the Council.
***
Balance of payments crisis
Protective measures
Current TEC
Article 119 TEC (and Article 143 TFEU) concerned serious balance of payments difficulties. The second level is represented by Article 120 TEC, which concerns even more serious imbalances, namely a sudden crisis, which may lead to (exceptional) protective measures:
Article 120 TEC in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/97:
Page 97
Article 120 TEC
1. Where a sudden crisis in the balance of payments occurs and a decision within the meaning of Article 119(2) is not immediately taken, the Member State concerned may, as a precaution, take the necessary protective measures. Such measures must cause the least possible disturbance in the functioning of the common market and must not be wider in scope than is strictly necessary to remedy the sudden difficulties which have arisen.
2. The Commission and the other Member States shall be informed of such protective measures not later than when they enter into force. The Commission may recommend to the Council the granting of mutual assistance under Article 119.
3. After the Commission has delivered an opinion and the Committee referred to in Article 114 has been consulted, the Council may, acting by a qualified majority, decide that the State concerned shall amend, suspend or abolish the protective measures referred to above.
4. Subject to Article 122(6), this Article shall cease to apply from the beginning of the third
stage.
***
Lisbon Treaty
The Articles 143 and 144 TFEU are closely linked. When balance of payments problems occur suddenly and on a massive scale, Article 144 TFEU with potential unilateral protective measures kicks in.
Article 144 TFEU does not change the substance of Article 120 TEC. Disturbances in the functioning of the internal market must still be minimal and the scope of the measures restricted to the strictly necessary.
These exceptional measures quickly become European Union (European Community) matters. The Commission and the Council (Ecofin) can act to grant mutual assistance to a member state hit by a balance of payments crisis, but the EU institutions also review the measures ex post.
The Lisbon Treaty wording clarifies and updates the provision. Because of the beginning of third stage of economic and monetary union (EMU), Article 144 TFEU clearly expresses that this provision directly concerns the member states with a derogation (OJ 9.5.2008 C 115/111):
Article 144 TFEU
(ex Article 120 TEC)
1. Where a sudden crisis in the balance of payments occurs and a decision within the meaning of Article 143(2) is not immediately taken, a Member State with a derogation may, as a precaution, take the necessary protective measures. Such measures must cause the least possible disturbance in the functioning of the internal market and must not be wider in scope than is strictly necessary to remedy the sudden difficulties which have arisen.
2. The Commission and the other Member States shall be informed of such protective measures not later than when they enter into force. The Commission may recommend to the Council the granting of mutual assistance under Article 143.
3. After the Commission has delivered a recommendation and the Economic and Financial Committee has been consulted, the Council may decide that the Member State concerned shall amend, suspend or abolish the protective measures referred to above.
***
The existing and the proposed treaty provisions on responses to exceptional circumstances are clearly based on the idea of an evolving de facto solidarity between the member states of the European Union.
Serious difficulties and crises have to be faced together, although there are different provisions for the eurozone as a whole and the non-euro area member states (with a derogation), still forced to fight the financial tempests individually.
Ralf Grahn
P.S. A more detailed blog article on Article 119 TEC and Article 143 TFEU was meant to precede the above post, but it got stuck in technical problems, which have to be sorted out before publication.
“Living in interesting times” as regards international financial markets, it may be good to know that the current Treaty establishing the European Community (TEC) and the Treaty on the Functioning of the European Union (TFEU) foresee temporary safeguard measures to protect economic and monetary union (EMU) in exceptional circumstances.
There are separate transitional provisions for the EU member states with a derogation, i.e. outside the eurozone.
***
EMU safeguard measures
Current TEC
The European Community (European Union) prohibits all restrictions on the movement of capital and payments between member states and between member states and third countries, although abolishing existing restrictions with regard to third countries is a less absolute aim.
Within the context of economic and monetary union (EMU) restrictions are unthinkable, but in exceptional circumstances serious difficulties may give cause for temporary safeguard measures with regard to third countries.
The current Article 59 (ex Article 109i) of the Treaty establishing the European Community (TEC) is found in the latest consolidated version of the treaties (OJ 29.12.2006 C 321 E/65):
Article 59 TEC
Where, in exceptional circumstances, movements of capital to or from third countries cause, or threaten to cause, serious difficulties for the operation of economic and monetary union, the Council, acting by a qualified majority on a proposal from the Commission and after consulting the ECB, may take safeguard measures with regard to third countries for a period not exceeding six months if such measures are strictly necessary.
***
Lisbon Treaty
The Treaty of Lisbon, still on its rocky road to possible entry into force, is the most up-to-date manifestation of what the member state governments want the treaties to say.
Article 66 of the Treaty on the Functioning of the European Union (TFEU) retains the current safeguard measures without substantial change. See the concolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/73:
Part Three ‘Policies and internal actions of the Union’
Title IV TFEU (ex Title III) ‘Free movement of persons, services and capital’
Chapter 4 ‘Capital and payments’
Article 66 TFEU
(ex Article 59 TEC)
Where, in exceptional circumstances, movements of capital to or from third countries cause, or threaten to cause, serious difficulties for the operation of economic and monetary union, the Council, on a proposal from the Commission and after consulting the European Central Bank, may take safeguard measures with regard to third countries for a period not exceeding six months if such measures are strictly necessary.
***
Comment
We live “in interesting times” as regards the stability of the financial markets, so Article 59 TEC and Article 66 TFEU may be of more than purely theoretical interest.
The provision offers the EU possibilities to safeguard the operation of economic and monetary union (EMU) with regard to third countries.
These measures can not be taken lightly: ‘exceptional circumstances’, ‘serious difficulties’ and ‘strictly necessary’ all circumscribe recourse to such measures, which are contrary to the aims of free movement of capital and payments.
In addition, six months is the maximum duration of a measure (but the wording does not exclude a new decision).
***
Transitional provisions
There are still twelve EU member states outside the eurozone. Denmark and the United Kingdom have negotiated exceptions (opt-outs) unlimited in time. The other member states with a derogation are Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia (until 1 January 2009) and Sweden.
The transitional EMU provisions take account of potential balance of payments problems at two levels, serious problems and a sudden crisis.
***
Serious balance of payments difficulties
Existing TEC
Article 119 TEC (ex Article 109h) sets out the current rules, which illustrate how the problems of one member state may have repercussions for the rest, notably through the internal market and external trade (in relation to third countries).
Primarily, if a member state (with a derogation) is seriously threatened with balance of payments problems, the member state acts, within the provisions of the TEC, to remedy the situation. Then, the Commission investigates and may issue recommendations to the state.
If the actions are insufficient, the Commission can recommend that the Council grants mutual assistance to the member state in difficulties.
If mutual assistance is not granted, or if the assistance given and the measures taken prove to be insufficient, the Commission can authorise the member state to take (exceptional) protective measures. These are subject to ex post review by the Council.
The current Article 119 TEC (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/96-97):
Article 119 TEC
1. Where a Member State is in difficulties or is seriously threatened with difficulties as regards its balance of payments either as a result of an overall disequilibrium in its balance of payments, or as a result of the type of currency at its disposal, and where such difficulties are liable in particular to jeopardise the functioning of the common market or the progressive implementation of the common commercial policy, the Commission shall immediately investigate the position of the State in question and the action which, making use of all the means at its disposal, that State has taken or may take in accordance with the provisions of this Treaty. The Commission shall state what measures it recommends the State concerned to take.
If the action taken by a Member State and the measures suggested by the Commission do not prove sufficient to overcome the difficulties which have arisen or which threaten, the Commission shall, after consulting the Committee referred to in Article 114, recommend to the Council the granting of mutual assistance and appropriate methods therefor.
The Commission shall keep the Council regularly informed of the situation and of how it is developing.
2. The Council, acting by a qualified majority, shall grant such mutual assistance; it shall adopt directives or decisions laying down the conditions and details of such assistance, which may take such forms as:
(a) a concerted approach to or within any other international organisations to which Member States may have recourse;
(b) measures needed to avoid deflection of trade where the State which is in difficulties maintains or reintroduces quantitative restrictions against third countries;
(c) the granting of limited credits by other Member States, subject to their agreement.
3. If the mutual assistance recommended by the Commission is not granted by the Council or if the mutual assistance granted and the measures taken are insufficient, the Commission shall authorise the State which is in difficulties to take protective measures, the conditions and details of which the Commission shall determine.
Such authorisation may be revoked and such conditions and details may be changed by the Council acting by a qualified majority.
4. Subject to Article 122(6), this Article shall cease to apply from the beginning of the third stage.
***
Lisbon Treaty
Article 143 of the Treaty on the Functioning of the European Union (TFEU) takes over the substance of Article 119 TEC, but the updated wording more clearly presents the transitional character of the provision and that the provision concerns member states with a derogation.
Article 143 TFEU in the consolidated version of the Lisbon Treaty, OJ 9.5.2008 C 115/110-111:
Article 143 TFEU
(ex Article 119 TEC)
1. Where a Member State with a derogation is in difficulties or is seriously threatened with difficulties as regards its balance of payments either as a result of an overall disequilibrium in its balance of payments, or as a result of the type of currency at its disposal, and where such difficulties are liable in particular to jeopardise the functioning of the internal market or the implementation of the common commercial policy, the Commission shall immediately investigate the position of the State in question and the action which, making use of all the means at its disposal, that State has taken or may take in accordance with the provisions of the Treaties. The Commission shall state what measures it recommends the State concerned to take.
If the action taken by a Member State with a derogation and the measures suggested by the Commission do not prove sufficient to overcome the difficulties which have arisen or which threaten, the Commission shall, after consulting the Economic and Financial Committee, recommend to the Council the granting of mutual assistance and appropriate methods therefor.
The Commission shall keep the Council regularly informed of the situation and of how it is developing.
2. The Council shall grant such mutual assistance; it shall adopt directives or decisions laying down the conditions and details of such assistance, which may take such forms as:
(a) a concerted approach to or within any other international organisations to which Member States with a derogation may have recourse;
(b) measures needed to avoid deflection of trade where the Member State with a derogation which is in difficulties maintains or reintroduces quantitative restrictions against third countries;
(c) the granting of limited credits by other Member States, subject to their agreement.
3. If the mutual assistance recommended by the Commission is not granted by the Council or if the mutual assistance granted and the measures taken are insufficient, the Commission shall authorise the Member State with a derogation which is in difficulties to take protective measures, the conditions and details of which the Commission shall determine.
Such authorisation may be revoked and such conditions and details may be changed by the Council.
***
Balance of payments crisis
Protective measures
Current TEC
Article 119 TEC (and Article 143 TFEU) concerned serious balance of payments difficulties. The second level is represented by Article 120 TEC, which concerns even more serious imbalances, namely a sudden crisis, which may lead to (exceptional) protective measures:
Article 120 TEC in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/97:
Page 97
Article 120 TEC
1. Where a sudden crisis in the balance of payments occurs and a decision within the meaning of Article 119(2) is not immediately taken, the Member State concerned may, as a precaution, take the necessary protective measures. Such measures must cause the least possible disturbance in the functioning of the common market and must not be wider in scope than is strictly necessary to remedy the sudden difficulties which have arisen.
2. The Commission and the other Member States shall be informed of such protective measures not later than when they enter into force. The Commission may recommend to the Council the granting of mutual assistance under Article 119.
3. After the Commission has delivered an opinion and the Committee referred to in Article 114 has been consulted, the Council may, acting by a qualified majority, decide that the State concerned shall amend, suspend or abolish the protective measures referred to above.
4. Subject to Article 122(6), this Article shall cease to apply from the beginning of the third
stage.
***
Lisbon Treaty
The Articles 143 and 144 TFEU are closely linked. When balance of payments problems occur suddenly and on a massive scale, Article 144 TFEU with potential unilateral protective measures kicks in.
Article 144 TFEU does not change the substance of Article 120 TEC. Disturbances in the functioning of the internal market must still be minimal and the scope of the measures restricted to the strictly necessary.
These exceptional measures quickly become European Union (European Community) matters. The Commission and the Council (Ecofin) can act to grant mutual assistance to a member state hit by a balance of payments crisis, but the EU institutions also review the measures ex post.
The Lisbon Treaty wording clarifies and updates the provision. Because of the beginning of third stage of economic and monetary union (EMU), Article 144 TFEU clearly expresses that this provision directly concerns the member states with a derogation (OJ 9.5.2008 C 115/111):
Article 144 TFEU
(ex Article 120 TEC)
1. Where a sudden crisis in the balance of payments occurs and a decision within the meaning of Article 143(2) is not immediately taken, a Member State with a derogation may, as a precaution, take the necessary protective measures. Such measures must cause the least possible disturbance in the functioning of the internal market and must not be wider in scope than is strictly necessary to remedy the sudden difficulties which have arisen.
2. The Commission and the other Member States shall be informed of such protective measures not later than when they enter into force. The Commission may recommend to the Council the granting of mutual assistance under Article 143.
3. After the Commission has delivered a recommendation and the Economic and Financial Committee has been consulted, the Council may decide that the Member State concerned shall amend, suspend or abolish the protective measures referred to above.
***
The existing and the proposed treaty provisions on responses to exceptional circumstances are clearly based on the idea of an evolving de facto solidarity between the member states of the European Union.
Serious difficulties and crises have to be faced together, although there are different provisions for the eurozone as a whole and the non-euro area member states (with a derogation), still forced to fight the financial tempests individually.
Ralf Grahn
P.S. A more detailed blog article on Article 119 TEC and Article 143 TFEU was meant to precede the above post, but it got stuck in technical problems, which have to be sorted out before publication.
Friday, 21 November 2008
Sweden ratifies Lisbon Treaty
After twelve hours of plenary debate, the Swedish Parliament (Sveriges Riksdag) approved the EU Lisbon Treaty at midnight local time, clearing the way for formal ratification by depositing the ratification instrument in Rome.
Source:
http://www.riksdagen.se/templates/R_HtmlCallPage____16504.aspx
Approval required a three fourths majority.
The provisional minutes are promised in a few hours.
***
This leaves the Czech Republic, the holder of the next EU Council presidency, as the lone straggler among the member states’ parliaments.
In Poland and Germany the parliaments have approved the amending Treaty of Lisbon, but the Polish President has obstructed and the German Constitutional Court has not yet ruled on a number of complaints.
After the Swedish vote, rejectionist Ireland is a little bit more in a category of its own among the 27 member states of the European Union.
The Committee report, Utrikesutskottets betänkande 2008/09:UU8, is now available on the Parliament’s web site: www.riksdagen.se .
Ralf Grahn
Source:
http://www.riksdagen.se/templates/R_HtmlCallPage____16504.aspx
Approval required a three fourths majority.
The provisional minutes are promised in a few hours.
***
This leaves the Czech Republic, the holder of the next EU Council presidency, as the lone straggler among the member states’ parliaments.
In Poland and Germany the parliaments have approved the amending Treaty of Lisbon, but the Polish President has obstructed and the German Constitutional Court has not yet ruled on a number of complaints.
After the Swedish vote, rejectionist Ireland is a little bit more in a category of its own among the 27 member states of the European Union.
The Committee report, Utrikesutskottets betänkande 2008/09:UU8, is now available on the Parliament’s web site: www.riksdagen.se .
Ralf Grahn
Thursday, 20 November 2008
EMU: Exchange rate policies as a common interest
This blog post is dedicated to our readers in Bulgaria, the Czech Republic, Denmark, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia, Sweden and the United Kingdom, the member states with a derogation within the context of economic and monetary union (EMU), but the national exchange-rate policies are defined as a matter of common interest to all EU member states (and citizens).
The EU Treaty of Lisbon updates the Treaty establishing the European Community (TEC), by taking into account the establishment of the eurozone and the experiences within the exchange-rate mechanism (ERM II).
***
Current treaty
The current Treaty establishing the European Community (TEC) sets out Transitional provisions in Chapter 4 of Title VII Economic and monetary policy, in Part Three Community policies (in the latest codified version of the treaties, Official Journal 29.12.2006 C 321 E/93─101)
Chapter 4 Transitional provisions contains Articles 116 to 124 TEC.
***
Exchange-rate policy as a common interest
Article 124 TEC (ex Article 109m) set out the exchange-rate policy of each member state as a matter of common interest before the beginning of the third stage of economic and monetary union (EMU), when the single currency, the euro, replaced the national exchange-rate policies of the member states which adopted the euro. Article 124 TEC continues to apply ‘by analogy’ to the member states with a derogation, i.e. outside the eurozone:
Article 124 TEC
1. Until the beginning of the third stage, each Member State shall treat its exchange-rate policy as a matter of common interest. In so doing, Member States shall take account of the experience acquired in cooperation within the framework of the European Monetary System (EMS) and in developing the ecu, and shall respect existing powers in this field.
2. From the beginning of the third stage and for as long as a Member State has a derogation, paragraph 1 shall apply by analogy to the exchange-rate policy of that Member State.
***
Draft Constitution
The euro currency had been introduced, and the euro banknotes and coins were in circulation, when the European Convention deliberated institutional reform of the European Union. It is hardly surprising that the Convention proposed a reworked section with the aim to simplify and to clarify the transitional provisions.
Section 4 Transitional provisions comprises Articles III-91 to III-96 of the draft Constitution (OJ 18.7.2003 C 169/45─46).
Article III-94 of the draft Constitution updated Article 124 TEC to take account of the introduction of the euro, which had left only three of the fifteen existing member states outside the euro area (Denmark, the United Kingdom and Sweden), but with twelve new member states set to join the European Union in the so called big bang enlargement:
SECTION 4
Transitional provisions
Article III-94 Draft Constitution
Each Member State with a derogation shall treat its exchange-rate policy as a matter of common interest. In so doing, it shall take account of the experience acquired in cooperation within the framework of the exchange-rate mechanism.
***
Finland
The Finnish government reported on the results of the European Convention in Valtioneuvoston selonteko Eduskunnalle konventin tuloksista ja valmistautumisesta hallitusten väliseen konferenssiin (VNS 2/2003 vp). Finland had adopted the euro. A section discussed economic and monetary policy (8.5 Talous. ja rahapolitiikka) on pages 65 to 67, but I found nothing specific about Article III-94 of the draft Constitution.
***
Sweden
Ahead of the intergovernmental conference, the Swedish government presented its views in a memorandum, Regeringens skrivelse 2003/04:13 Europeiska konventet om EU:s framtid (2 October 2003).
Sweden had not negotiated an opt-out from the treaty obligation to introduce the euro currency, but still the government had arranged a referendum on the adoption. The negative referendum result, which left Sweden in legal limbo, was fresh.
If the updated Article III-94 of the draft Constitution had little direct significance for Finland, Sweden on the contrary retained a national exchange-rate policy and a treatment of the ‘common interest’ would not have been out of place.
In spite of this, I found no specific mention of draft Constitution Article III-94 in the memorandum.
***
de Poncins
Étienne de Poncins presented the text of Article III-94 in Vers une Constitution européenne (Éditions 10/18, 2003), page 315, without comment.
***
Common interest?
Not one comment from the three sources checked; is this an indication of the significance of matters defined as common interests?
***
Constitutional Treaty
The transitional EMU provisions of the intergovernmental conference (IGC 2004) are found in Section 5 Transitional provisions, comprising Articles III-197 to 202 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/86─90).
The exchange-rate policies as matters of common interest were mentioned in Article III-200:
Article III-200 Constitution
Each Member State with a derogation shall treat its exchange-rate policy as a matter of common interest. In so doing, it shall take account of the experience acquired in cooperation within the framework of the exchange-rate mechanism.
***
Let us see it our standard references are more informative concerning the signed Constitutional Treaty, than they were with regard to the draft Constitution.
***
Sweden
The government of Sweden, still outside the eurozone as a member state with a derogation, offered a short and bland description of the aims of economic and monetary union (EMU) in the draft ratification bill, Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 June 2005), page 171:
.
”Den ekonomiska och monetära unionen (EMU) är ett samarbete inom EU som syftar till att samordna medlemsländernas ekonomiska politik och att införa en gemensam valuta. EMU har genomförts i tre etapper. Den sista etappen inleddes 1999 och innebär en fullbordad valutaunion med gemensam centralbank (Europeiska centralbanken) samt gemensam valuta och penningpolitik. En förutsättning för valutaunionen har varit och är att de deltagande ländernas ekonomier befinner sig på ungefär samma nivå. Ett antal ekonomiska krav som ett land måste uppfylla för att få delta i valutaunionen har därför ställts upp, de s.k. konvergenskriterierna. För att säkerställa sunda offentliga finanser inom unionen har därför EU inrättat den s.k. stabilitets- och tillväxtpakten.”
The Swedish government did not mention Article III-200 of the Constitution specifically, although Sweden through its national central bank (Sveriges Riksbank) has a national exchange-rate policy, defined as a common interest for the European Union as a whole.
***
Finland
In Finland, the government’s ratification bill, Hallituksen esitys Eduskunnalle Euroopan perustuslaista tehdyn sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta (HE 67/2006 vp), mentioned Article III-200 of the Constitution on page 185. The government remarked that Article III-200 corresponds with Article 124 TEC without substantial change:
”III-200 artikla, joka koskee valuuttakurssipolitiikkaa niiden maiden osalta, joissa euroa ei ole otettu käyttöön, vastaa asiasisällöltään SEY 124 artiklaa.”
***
Original Lisbon Treaty
In Article 2, point 104, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) updated Article 124 TEC by adopting the Convention and Constitution proposals, but the amendments were inserted in the ‘usual’, i.e. unreadable manner adopted by the IGC 2007 (OJ 17.12.2007 C 306/79):
104) An Article 118b shall be inserted, with the wording of Article 124(1); it shall be amended as follows:
(a) the words ‘Until the beginning of the third stage, each Member State shall treat’ shall be replaced by ‘Each Member State with a derogation shall treat’;
(b) the words ‘of the European Monetary System (EMS) and in developing the ecu, and shall respect existing powers in this field’ shall be replaced by ‘of the exchange-rate mechanism.’.
***
Renumbering
The Treaty on the Functioning of the European Union (TFEU) table of equivalences confirms that the new Article 118b TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 142 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII, and in the renumbered Chapter 5 ‘Transitional provisions’ (OJ 17.12.2007 C 306/215).
(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.)
***
Consolidated Lisbon Treaty: TFEU
A readable Article 142 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 115/110:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 5 Transitional provisions
Article 142 TFEU
(ex Article 124(1) TEC)
Each Member State with a derogation shall treat its exchange-rate policy as a matter of common interest. In so doing, Member States shall take account of the experience acquired in cooperation within the framework of the exchange-rate mechanism.
***
We notice that Article 142 TFEU repeats the wording of Article III-94 of the draft Constitution and Article III-200 of the Constitutional Treaty almost exactly. Only ‘it’ remains ‘Member States’ as in the current Article 124(1) TEC, second sentence.
***
Sweden
Even if Sweden is one of the EU member states with a derogation, the most artificial one at that, I found nothing about Article 118b TFEU (ToL) in the Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008).
Is common interest of no particular interest?
***
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 5 (Dispositions transitoires) on page 260 to 261. Their characterization of Articles 141 to 144 TFEU is succinct:
« Les art. 141 à 144 TFUE comprennent les dispositions applicables aux États membres faisant l’objet d’une dérogation, sans changement notable. »
***
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 142 TFEU (on page 13):
“Draws on and updates Article 124(1) TEC.”
***
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. There was a short explanation of Article 118b TFEU (ToL), on page 64:
“Article 118(b) (Constitution Article III-200) largely corresponds with present Article 124(1) on the exchange rate policy of Member States with a derogation.”
***
Common interest
Naturally, materials on amending treaties, such as the Treaty of Lisbon, tend to concentrate on the substantial changes. Still, it is notable that ‘common interest’ seems to raise no interest at all among our government and parliament sources.
***
ERM II
For a closer look, you have to turn to the European Central Bank and the national central banks. Here are a few introductory pointers:
Exchange-rate cooperation and the exchange-rate mechanism (ERM II) are outlined in the Agreement of 16 March 2006 between the European Central Bank and the national central banks of the Member States outside the euro area laying down the operating procedures for an exchange rate mechanism in stage three of Economic and Monetary Union (2006/C 73/08), published in the Official Journal of the European Union (OJ) 25.3.2006 C 73/21, since amended.
The ERM II Agreement contains provisions concerning the national central banks of all the non-euro area member states, but especially with regard to the countries participating in the ERM II.
The amending Agreement of 21 December 2006 (Slovenia out of ERM II when adopting the euro, Bulgaria and Romania in) was published in the OJ 20.1.2007 C 14/6 and the amending Agreement of 14 December 2007 (Cyprus and Malta out of ERM II on joining the euro) in the OJ 29.12.2007 C 319/17.
A corresponding amendment concerning Slovakia is to be expected.
For an accessible overview, you can go to the Scadplus web page Exchange rate mechanism (ERM II) between the euro and participating currencies (last update 22 March 2007):
http://europa.eu/scadplus/leg/en/lvb/l25082.htm
Ralf Grahn
The EU Treaty of Lisbon updates the Treaty establishing the European Community (TEC), by taking into account the establishment of the eurozone and the experiences within the exchange-rate mechanism (ERM II).
***
Current treaty
The current Treaty establishing the European Community (TEC) sets out Transitional provisions in Chapter 4 of Title VII Economic and monetary policy, in Part Three Community policies (in the latest codified version of the treaties, Official Journal 29.12.2006 C 321 E/93─101)
Chapter 4 Transitional provisions contains Articles 116 to 124 TEC.
***
Exchange-rate policy as a common interest
Article 124 TEC (ex Article 109m) set out the exchange-rate policy of each member state as a matter of common interest before the beginning of the third stage of economic and monetary union (EMU), when the single currency, the euro, replaced the national exchange-rate policies of the member states which adopted the euro. Article 124 TEC continues to apply ‘by analogy’ to the member states with a derogation, i.e. outside the eurozone:
Article 124 TEC
1. Until the beginning of the third stage, each Member State shall treat its exchange-rate policy as a matter of common interest. In so doing, Member States shall take account of the experience acquired in cooperation within the framework of the European Monetary System (EMS) and in developing the ecu, and shall respect existing powers in this field.
2. From the beginning of the third stage and for as long as a Member State has a derogation, paragraph 1 shall apply by analogy to the exchange-rate policy of that Member State.
***
Draft Constitution
The euro currency had been introduced, and the euro banknotes and coins were in circulation, when the European Convention deliberated institutional reform of the European Union. It is hardly surprising that the Convention proposed a reworked section with the aim to simplify and to clarify the transitional provisions.
Section 4 Transitional provisions comprises Articles III-91 to III-96 of the draft Constitution (OJ 18.7.2003 C 169/45─46).
Article III-94 of the draft Constitution updated Article 124 TEC to take account of the introduction of the euro, which had left only three of the fifteen existing member states outside the euro area (Denmark, the United Kingdom and Sweden), but with twelve new member states set to join the European Union in the so called big bang enlargement:
SECTION 4
Transitional provisions
Article III-94 Draft Constitution
Each Member State with a derogation shall treat its exchange-rate policy as a matter of common interest. In so doing, it shall take account of the experience acquired in cooperation within the framework of the exchange-rate mechanism.
***
Finland
The Finnish government reported on the results of the European Convention in Valtioneuvoston selonteko Eduskunnalle konventin tuloksista ja valmistautumisesta hallitusten väliseen konferenssiin (VNS 2/2003 vp). Finland had adopted the euro. A section discussed economic and monetary policy (8.5 Talous. ja rahapolitiikka) on pages 65 to 67, but I found nothing specific about Article III-94 of the draft Constitution.
***
Sweden
Ahead of the intergovernmental conference, the Swedish government presented its views in a memorandum, Regeringens skrivelse 2003/04:13 Europeiska konventet om EU:s framtid (2 October 2003).
Sweden had not negotiated an opt-out from the treaty obligation to introduce the euro currency, but still the government had arranged a referendum on the adoption. The negative referendum result, which left Sweden in legal limbo, was fresh.
If the updated Article III-94 of the draft Constitution had little direct significance for Finland, Sweden on the contrary retained a national exchange-rate policy and a treatment of the ‘common interest’ would not have been out of place.
In spite of this, I found no specific mention of draft Constitution Article III-94 in the memorandum.
***
de Poncins
Étienne de Poncins presented the text of Article III-94 in Vers une Constitution européenne (Éditions 10/18, 2003), page 315, without comment.
***
Common interest?
Not one comment from the three sources checked; is this an indication of the significance of matters defined as common interests?
***
Constitutional Treaty
The transitional EMU provisions of the intergovernmental conference (IGC 2004) are found in Section 5 Transitional provisions, comprising Articles III-197 to 202 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/86─90).
The exchange-rate policies as matters of common interest were mentioned in Article III-200:
Article III-200 Constitution
Each Member State with a derogation shall treat its exchange-rate policy as a matter of common interest. In so doing, it shall take account of the experience acquired in cooperation within the framework of the exchange-rate mechanism.
***
Let us see it our standard references are more informative concerning the signed Constitutional Treaty, than they were with regard to the draft Constitution.
***
Sweden
The government of Sweden, still outside the eurozone as a member state with a derogation, offered a short and bland description of the aims of economic and monetary union (EMU) in the draft ratification bill, Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 June 2005), page 171:
.
”Den ekonomiska och monetära unionen (EMU) är ett samarbete inom EU som syftar till att samordna medlemsländernas ekonomiska politik och att införa en gemensam valuta. EMU har genomförts i tre etapper. Den sista etappen inleddes 1999 och innebär en fullbordad valutaunion med gemensam centralbank (Europeiska centralbanken) samt gemensam valuta och penningpolitik. En förutsättning för valutaunionen har varit och är att de deltagande ländernas ekonomier befinner sig på ungefär samma nivå. Ett antal ekonomiska krav som ett land måste uppfylla för att få delta i valutaunionen har därför ställts upp, de s.k. konvergenskriterierna. För att säkerställa sunda offentliga finanser inom unionen har därför EU inrättat den s.k. stabilitets- och tillväxtpakten.”
The Swedish government did not mention Article III-200 of the Constitution specifically, although Sweden through its national central bank (Sveriges Riksbank) has a national exchange-rate policy, defined as a common interest for the European Union as a whole.
***
Finland
In Finland, the government’s ratification bill, Hallituksen esitys Eduskunnalle Euroopan perustuslaista tehdyn sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta (HE 67/2006 vp), mentioned Article III-200 of the Constitution on page 185. The government remarked that Article III-200 corresponds with Article 124 TEC without substantial change:
”III-200 artikla, joka koskee valuuttakurssipolitiikkaa niiden maiden osalta, joissa euroa ei ole otettu käyttöön, vastaa asiasisällöltään SEY 124 artiklaa.”
***
Original Lisbon Treaty
In Article 2, point 104, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) updated Article 124 TEC by adopting the Convention and Constitution proposals, but the amendments were inserted in the ‘usual’, i.e. unreadable manner adopted by the IGC 2007 (OJ 17.12.2007 C 306/79):
104) An Article 118b shall be inserted, with the wording of Article 124(1); it shall be amended as follows:
(a) the words ‘Until the beginning of the third stage, each Member State shall treat’ shall be replaced by ‘Each Member State with a derogation shall treat’;
(b) the words ‘of the European Monetary System (EMS) and in developing the ecu, and shall respect existing powers in this field’ shall be replaced by ‘of the exchange-rate mechanism.’.
***
Renumbering
The Treaty on the Functioning of the European Union (TFEU) table of equivalences confirms that the new Article 118b TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 142 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII, and in the renumbered Chapter 5 ‘Transitional provisions’ (OJ 17.12.2007 C 306/215).
(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.)
***
Consolidated Lisbon Treaty: TFEU
A readable Article 142 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 115/110:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 5 Transitional provisions
Article 142 TFEU
(ex Article 124(1) TEC)
Each Member State with a derogation shall treat its exchange-rate policy as a matter of common interest. In so doing, Member States shall take account of the experience acquired in cooperation within the framework of the exchange-rate mechanism.
***
We notice that Article 142 TFEU repeats the wording of Article III-94 of the draft Constitution and Article III-200 of the Constitutional Treaty almost exactly. Only ‘it’ remains ‘Member States’ as in the current Article 124(1) TEC, second sentence.
***
Sweden
Even if Sweden is one of the EU member states with a derogation, the most artificial one at that, I found nothing about Article 118b TFEU (ToL) in the Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008).
Is common interest of no particular interest?
***
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 5 (Dispositions transitoires) on page 260 to 261. Their characterization of Articles 141 to 144 TFEU is succinct:
« Les art. 141 à 144 TFUE comprennent les dispositions applicables aux États membres faisant l’objet d’une dérogation, sans changement notable. »
***
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 142 TFEU (on page 13):
“Draws on and updates Article 124(1) TEC.”
***
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. There was a short explanation of Article 118b TFEU (ToL), on page 64:
“Article 118(b) (Constitution Article III-200) largely corresponds with present Article 124(1) on the exchange rate policy of Member States with a derogation.”
***
Common interest
Naturally, materials on amending treaties, such as the Treaty of Lisbon, tend to concentrate on the substantial changes. Still, it is notable that ‘common interest’ seems to raise no interest at all among our government and parliament sources.
***
ERM II
For a closer look, you have to turn to the European Central Bank and the national central banks. Here are a few introductory pointers:
Exchange-rate cooperation and the exchange-rate mechanism (ERM II) are outlined in the Agreement of 16 March 2006 between the European Central Bank and the national central banks of the Member States outside the euro area laying down the operating procedures for an exchange rate mechanism in stage three of Economic and Monetary Union (2006/C 73/08), published in the Official Journal of the European Union (OJ) 25.3.2006 C 73/21, since amended.
The ERM II Agreement contains provisions concerning the national central banks of all the non-euro area member states, but especially with regard to the countries participating in the ERM II.
The amending Agreement of 21 December 2006 (Slovenia out of ERM II when adopting the euro, Bulgaria and Romania in) was published in the OJ 20.1.2007 C 14/6 and the amending Agreement of 14 December 2007 (Cyprus and Malta out of ERM II on joining the euro) in the OJ 29.12.2007 C 319/17.
A corresponding amendment concerning Slovakia is to be expected.
For an accessible overview, you can go to the Scadplus web page Exchange rate mechanism (ERM II) between the euro and participating currencies (last update 22 March 2007):
http://europa.eu/scadplus/leg/en/lvb/l25082.htm
Ralf Grahn
Wednesday, 19 November 2008
General Council of the European Central Bank
The European Central Bank (ECB) and the national central banks of the euro area form the European System of Central Banks (ESCB), or the Eurosystem. But at this moment twelve (soon eleven) EU member states are (still) outside the Eurozone.
The General Council of the European Central Bank is the transitional link between the Eurosystem and the EU members with a national currency and a so called derogation.
This blog post is dedicated to our readers in Bulgaria, the Czech Republic, Denmark, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia, Sweden and the United Kingdom.
***
Current treaty
The current Treaty establishing the European Community (TEC) sets out Transitional provisions in Chapter 4 of Title VII Economic and monetary policy, in Part Three Community policies (in the latest codified version of the treaties, Official Journal 29.12.2006 C 321 E/93─101).
Chapter 4 Transitional provisions contains Articles 116 to 124 TEC.
***
General Council of the ECB
Article 123(3) TEC sets up the General Council of the ECB as a transitional body:
Article 123(3) TEC
-----
3. If and as long as there are Member States with a derogation, and without prejudice to
Article 107(3) of this Treaty, the General Council of the ECB referred to in Article 45 of the
Statute of the ESCB shall be constituted as a third decision-making body of the ECB.
-----
***
ECB decision-making bodies
Since the General Council of the ECB is seen as a transitory exception to the institutional framework of the European Central Bank, the referral to Article 107(3) TEC reminds us of the ordinary decision-making bodies of the ECB:
Article 107(3) TEC
-----
3. The ESCB shall be governed by the decision-making bodies of the ECB which shall be the Governing Council and the Executive Board.
-----
***
General Council tasks
At the start of the second stage of economic and monetary union (EMU), the European Monetary Institute (EMI) was established to prepare the establishment of the European Central Bank (ECB) and the introduction of the euro currency (third stage of EMU).
Article 117(2) TEC mentions a number of EMI’s tasks. EMI has been replaced by the ECB.
Article 117(2) TEC
-----
2. The EMI shall:
— strengthen cooperation between the national central banks,
— strengthen the coordination of the monetary policies of the Member States, with the aim of ensuring price stability,
— monitor the functioning of the European Monetary System,
— hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets,
— take over the tasks of the European Monetary Cooperation Fund, which shall be dissolved; the modalities of dissolution are laid down in the Statute of the EMI,
— facilitate the use of the ecu and oversee its development, including the smooth functioning of
the ecu clearing system.
-----
***
ESCB Statute
Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (1992), in the latest consolidated version of the treaties OJ 29.12.2006 C 321 E/256, has a Chapter IX Transitional and other provisions for the ESCB.
Article 43 General provision excludes member states with a derogation from enumerated rights and obligations.
Article 44 Transitional tasks of the ECB confers the tasks of the EMI on the ECB and sets out the advisory task of the ECB during the preparation of abrogation of derogations.
Article 45 The General Council of the ECB institutes the General Council as a third decision-making body of the ECB and sets out the institutional basics. Since Article 45 of the ESCB Statute is referred to in Article 123(3) TEC, here is the wording:
Article 45 ESCB Statute
The General Council of the ECB
45.1. Without prejudice to Article 107(3) of this Treaty, the General Council shall be constituted as a third decision-making body of the ECB.
45.2. The General Council shall comprise the President and Vice-President of the ECB and the Governors of the national central banks. The other members of the Executive Board may participate, without having the right to vote, in meetings of the General Council.
45.3. The responsibilities of the General Council are listed in full in Article 47 of this Statute.
Article 46 Rules of Procedure of the General Council.
Article 47 Responsibilities of the General Council.
Article 48 Transitional provisions for the capital of the ECB.
-----
Article 53 Applicability of the transitional provisions states that as long as there are member states with a derogation, Articles 43 to 48 shall be applicable.
***
Draft Constitution
The euro currency had been introduced, and the euro banknotes and coins were in circulation, when the European Convention deliberated institutional reform of the European Union. It is hardly surprising that the Convention proposed a reworked section with the aim to simplify and to clarify the transitional provisions.
Section 4 Transitional provisions comprises Articles III-91 to III-96 of the draft Constitution (OJ 18.7.2003 C 169/45─46).
Article III-93 of the draft Constitution is a consolidation and update of the treaty provisions we looked at above:
SECTION 4
Transitional provisions
Article III-93 Draft Constitution
1. If and as long as there are Member States with a derogation, and without prejudice to Article III-79(3), the General Council of the European Central Bank referred to in Article 45 of the Statute of the European System of Central Banks and the European Central Bank shall be constituted as a third decisionmaking body of the European Central Bank.
2. If and as long as there are Member States with a derogation, the European Central Bank shall, as regards those Member States:
(a) strengthen cooperation between the national central banks;
(b) strengthen the coordination of the monetary policies of the Member States, with the aim of ensuring price stability;
(c) monitor the functioning of the exchange-rate mechanism;
(d) hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets;
(e) carry out the former tasks of the European Monetary Cooperation Fund, previously taken over by the European Monetary Institute.
***
Finland
The Finnish government reported on the results of the European Convention in Valtioneuvoston selonteko Eduskunnalle konventin tuloksista ja valmistautumisesta hallitusten väliseen konferenssiin (VNS 2/2003 vp). Finland had adopted the euro. A section discussed economic and monetary policy (8.5 Talous. ja rahapolitiikka) on pages 65 to 67, but I found nothing specific about Article III-93 of the draft Constitution.
***
Sweden
Ahead of the intergovernmental conference, the Swedish government presented its views in a memorandum, Regeringens skrivelse 2003/04:13 Europeiska konventet om EU:s framtid (2 October 2003).
Sweden had not negotiated an opt-out from the treaty obligation to introduce the euro currency, but still the government had arranged a referendum on the adoption. The negative referendum result, which left Sweden in legal limbo, was fresh.
If the updated Article III-93 of the draft Constitution had little practical significance for Finland, the cursory treatment of transitional monetary provisions by the Swedish government may have had other reasons. Anyway, I found no specific mention of draft Constitution Article III-93 in the memorandum.
***
de Poncins
Étienne de Poncins presented the text of Article III-93 in Vers une Constitution européenne (Éditions 10/18, 2003), page 315, without comment.
***
Constitutional Treaty
The transitional EMU provisions of the intergovernmental conference (IGC 2004) are found in Section 5 Transitional provisions, comprising Articles III-197 to 202 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/86─90).
Article III-199 Constitution
1. If and as long as there are Member States with a derogation, and without prejudice to Article III-187(1), the General Council of the European Central Bank referred to in Article 45 of the Statute of the European System of Central Banks and of the European Central Bank shall be constituted as a third decision-making body of the European Central Bank.
2. If and as long as there are Member States with a derogation, the European Central Bank shall, as regards those Member States:
(a) strengthen cooperation between the national central banks;
(b) strengthen the coordination of the monetary policies of the Member States, with the aim of ensuring price stability;
(c) monitor the functioning of the exchange-rate mechanism;
(d) hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets;
(e) carry out the former tasks of the European Monetary Cooperation Fund which had subsequently been taken over by the European Monetary Institute.
***
Let us see it our standard references contribute anything towards our understanding of the provision.
***
Sweden
The government of Sweden, still outside the eurozone as a member state with a derogation, offered a short and bland description of the aims of economic and monetary union (EMU) in the draft ratification bill, Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 June 2005), page 171:
.
”Den ekonomiska och monetära unionen (EMU) är ett samarbete inom EU som syftar till att samordna medlemsländernas ekonomiska politik och att införa en gemensam valuta. EMU har genomförts i tre etapper. Den sista etappen inleddes 1999 och innebär en fullbordad valutaunion med gemensam centralbank (Europeiska centralbanken) samt gemensam valuta och penningpolitik. En förutsättning för valutaunionen har varit och är att de deltagande ländernas ekonomier befinner sig på ungefär samma nivå. Ett antal ekonomiska krav som ett land måste uppfylla för att få delta i valutaunionen har därför ställts upp, de s.k. konvergenskriterierna. För att säkerställa sunda offentliga finanser inom unionen har därför EU inrättat den s.k. stabilitets- och tillväxtpakten.”
The Swedish government did not mention Article III-199 of the Constitution specifically, although the national central bank (Sveriges Riksbank) participates in the General Council of the European Central Bank.
***
Finland
In Finland, the government’s ratification bill, Hallituksen esitys Eduskunnalle Euroopan perustuslaista tehdyn sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta (HE 67/2006 vp), mentioned Article III-199 of the Constitution on page 185. The government remarked on the essential similarity of Article III-199 with Article 123(3) TEC and Article 117(2) TEC save for technical adjustments. The Finnish government mentioned that Article III-199 applies to the states, which have not yet adopted the euro:
”III-199 artikla vastaa asiasisällöltään SEY 123 artiklan kolmatta kohtaa sekä SEY 117 artiklan toista kohtaa teknisiä muutoksia lukuun ottamatta. III-199 artikla koskee Euroopan keskuspankin yleisneuvostoa sekä Euroopan keskuspankin tehtäviä niihin valtioihin liittyen, jotka eivät ole vielä ottaneet euroa käyttöön.”
***
Original Lisbon Treaty
In Article 2, point 103, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) managed to adopt the substance of the Convention and Constitution proposals, but the amendments were inserted in the ‘usual’, i.e. unreadable manner adopted by the IGC 2007 (OJ 17.12.2007 C 306/79).
This is the wording the EU citizens were offered until the belated publication of the consolidated versions of the Lisbon Treaty:
103) Article 118 shall be repealed. A new Article 118a shall be inserted as follows:
(a) paragraph 1 thereof shall take over the text of Article 123(3); the words ‘of this Treaty’ shall be deleted;
(b) paragraph 2 thereof shall take over the text of the first five indents of Article 117(2); the five indents shall be amended as set out below and shall be preceded by the following introductory words:
‘If and as long as there are Member States with a derogation, the European Central Bank shall, as regards those Member States:’
(i) in the third indent, the words ‘European Monetary System’ shall be replaced by ‘exchange-rate mechanism’;
(ii) the fifth indent shall be replaced by the following:
‘— carry out the former tasks of the European Monetary Cooperation Fund which had subsequently been taken over by the European Monetary Institute.’.
***
Renumbering
The Treaty on the Functioning of the European Union (TFEU) table of equivalences confirms that the new Article 118a TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 141 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII, and in the renumbered Chapter 5 ‘Transitional provisions’ (OJ 17.12.2007 C 306/215).
(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.)
***
Consolidated Lisbon Treaty: TFEU
A readable Article 141 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 115/110:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 5 Transitional provisions
Article 141 TFEU
(ex Articles 123(3) and 117(2) first five indents, TEC)
1. If and as long as there are Member States with a derogation, and without prejudice to Article 129(1), the General Council of the European Central Bank referred to in Article 44 of the Statute of the ESCB and of the ECB shall be constituted as a third decision-making body of the European Central Bank.
2. If and as long as there are Member States with a derogation, the European Central Bank shall, as regards those Member States:
— strengthen cooperation between the national central banks,
— strengthen the coordination of the monetary policies of the Member States, with the aim of ensuring price stability,
— monitor the functioning of the exchange-rate mechanism,
— hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets,
— carry out the former tasks of the European Monetary Cooperation Fund which had subsequently been taken over by the European Monetary Institute.
***
ESCB Statute ─ transitional provisions
In the consolidated versions of the Lisbon Treaty, the Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Banks sets out the transitional EMU provisions in more detail in Chapter IX Transitional and other provisions for the ESCB (OJ 9.5.2008 C 115/247─250):
CHAPTER IX
TRANSITIONAL AND OTHER PROVISIONS FOR THE ESCB
Article 42 (ex Article 43)
General provisions
42.1. A derogation as referred to in Article 139 of the Treaty on the Functioning of the European Union shall entail that the following Articles of this Statute shall not confer any rights or impose any obligations on the Member State concerned: 3, 6, 9.2, 12.1, 14.3, 16, 18, 19, 20, 22, 23, 26.2, 27, 30, 31, 32, 33, 34, and 49.
42.2. The central banks of Member States with a derogation as specified in Article 139(1) of the Treaty on the Functioning of the European Union shall retain their powers in the field of monetary policy according to national law.
42.3. In accordance with Article 139 of the Treaty on the Functioning of the European Union, ‘Member States’ shall be read as ‘Member States whose currency is the euro’ in the following Articles of this Statute: 3, 11.2 and 19.
42.4. ‘National central banks’ shall be read as ‘central banks of Member States whose currency is the euro’ in the following Articles of this Statute: 9.2, 10.2, 10.3, 12.1, 16, 17, 18, 22, 23, 27, 30, 31, 32, 33.2 and 49.
42.5. ‘Shareholders’ shall be read as ‘central banks of Member States whose currency is the euro’ in Articles 10.3 and 33.1.
42.6. ‘Subscribed capital of the ECB’ shall be read as ‘capital of the ECB subscribed by the central banks of Member States whose currency is the euro’ in Articles 10.3 and 30.2.
Article 43 (ex Article 44)
Transitional tasks of the ECB
The ECB shall take over the former tasks of the EMI referred to in Article 141(2) of the Treaty on the Functioning of the European Union which, because of the derogations of one or more Member States, still have to be performed after the introduction of the euro.
The ECB shall give advice in the preparations for the abrogation of the derogations specified in Article 140 of the Treaty on the Functioning of the European Union.
Article 44 (ex Article 45)
The General Council of the ECB
44.1. Without prejudice to Article 129(3) of the Treaty on the Functioning of the European Union, the General Council shall be constituted as a third decision-making body of the ECB.
44.2. The General Council shall comprise the President and Vice-President of the ECB and the Governors of the national central banks. The other members of the Executive Board may participate, without having the right to vote, in meetings of the General Council.
44.3. The responsibilities of the General Council are listed in full in Article 46 of this Statute.
Article 45 (ex Article 46)
Rules of Procedure of the General Council
45.1. The President or, in his absence, the Vice-President of the ECB shall chair the General Council of the ECB.
45.2. The President of the Council and a Member of the Commission may participate, without having the right to vote, in meetings of the General Council.
45.3. The President shall prepare the meetings of the General Council.
45.4. By way of derogation from Article 12.3, the General Council shall adopt its Rules of Procedure.
45.5. The Secretariat of the General Council shall be provided by the ECB.
Article 46 (ex Article 47)
Responsibilities of the General Council
46.1. The General Council shall:
— perform the tasks referred to in Article 43;
— contribute to the advisory functions referred to in Articles 4 and 25.1.
46.2. The General Council shall contribute to:
— the collection of statistical information as referred to in Article 5;
— the reporting activities of the ECB as referred to in Article 15;
— the establishment of the necessary rules for the application of Article 26 as referred to in Article 26.4;
— the taking of all other measures necessary for the application of Article 29 as referred to in Article 29.4;
— the laying down of the conditions of employment of the staff of the ECB as referred to in Article 36.
46.3. The General Council shall contribute to the necessary preparations for irrevocably fixing the exchange rates of the currencies of Member States with a derogation against the euro as referred to in Article 140(3) of the Treaty on the Functioning of the European Union.
46.4. The General Council shall be informed by the President of the ECB of decisions of the Governing Council.
Article 47 (ex Article 48)
Transitional provisions for the capital of the ECB
In accordance with Article 29.1, each national central bank shall be assigned a weighting in the key for subscription of the ECB's capital. By way of derogation from Article 28.3, central banks of Member States with a derogation shall not pay up their subscribed capital unless the General Council, acting by a majority representing at least two thirds of the subscribed capital of the ECB and at least half of the shareholders, decides that a minimal percentage has to be paid up as a contribution to the operational costs of the ECB.
Article 48 (ex Article 49)
Deferred payment of capital, reserves and provisions of the ECB
48.1. The central bank of a Member State whose derogation has been abrogated shall pay up its subscribed share of the capital of the ECB to the same extent as the central banks of other Member States without a derogation, and shall transfer to the ECB foreign reserve assets in accordance with Article 30.1. The sum to be transferred shall be determined by multiplying the euro value at current exchange rates of the foreign reserve assets which have already been transferred to the ECB in accordance with Article 30.1, by the ratio between the number of shares subscribed by the national central bank concerned and the number of shares already paid up by the other national central banks.
48.2. In addition to the payment to be made in accordance with Article 48.1, the central bank concerned shall contribute to the reserves of the ECB, to those provisions equivalent to reserves, and to the amount still to be appropriated to the reserves and provisions corresponding to the balance of the profit and loss account as at 31 December of the year prior to the abrogation of the derogation. The sum to be contributed shall be determined by multiplying the amount of the reserves, as defined above and as stated in the approved balance sheet of the ECB, by the ratio between the number of shares subscribed by the central bank concerned and the number of shares already paid up by the other central banks.
48.3. Upon one or more countries becoming Member States and their respective national central banks becoming part of the ESCB, the subscribed capital of the ECB and the limit on the amount of foreign reserve assets that may be transferred to the ECB shall be automatically increased. The increase shall be determined by multiplying the respective amounts then prevailing by the ratio, within the expanded capital key, between the weighting of the entering national central banks concerned and the weighting of the national central banks already members of the ESCB. Each national central bank's weighting in the capital key shall be calculated by analogy with Article 29.1 and in compliance with Article 29.2. The reference periods to be used for the statistical data shall be identical to those applied for the latest quinquennial adjustment of the weightings under Article 29.3.
Article 49 (ex Article 52)
Exchange of banknotes in the currencies of the Member States
Following the irrevocable fixing of exchange rates in accordance with Article 140 of the Treaty on the Functioning of the European Union, the Governing Council shall take the necessary measures to ensure that banknotes denominated in currencies with irrevocably fixed exchange rates are exchanged by the national central banks at their respective par values.
Article 50 (ex Article 53)
Applicability of the transitional provisions
If and as long as there are Member States with a derogation, Articles 42 to 47 shall be applicable.
***
Sweden
Even if Sweden is one of the EU member states with a derogation, the most artificial one at that, I found nothing about Article 118a TFEU (ToL) in the Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008).
Have they confounded the properties of EMU, the economic and monetary union, with those of emu, the bird?
***
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 5 (Dispositions transitoires) on page 260 to 261. Their characterization of Articles 141 to 144 TFEU is succinct:
« Les art. 141 à 144 TFUE comprennent les dispositions applicables aux États membres faisant l’objet d’une dérogation, sans changement notable. »
***
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 141 TFEU (on page 13):
“Draws on and updates Articles 123(3) and 117(2) TEC.”
***
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. There was a short explanation of Article 118a TFEU (ToL), on page 64:
“A new Article 118a (Constitution Article III-199) updates present Articles 117(2) and 123(3), providing for Member States with a derogation from EMU the institutional machinery (including the European Monetary Institute and the General Council of the ECB) to monitor their progress towards the adoption of the euro.”
***
Ironies
One of the ironies uncovered during this research was that the government of the EU member state most peculiarly affected by the transitional EMU provisions, i.e. Sweden, had nothing to say about the General Council of the European Central Bank in voluminous legislative materials.
Another irony is that the Lisbon Treaty, although not in force, is sometimes clearer and more up-to-date in its consolidated versions than the existing treaties, even where there are no ‘institutional innovations’ to speak of.
In other words, it is advisable to use the Treaty of Lisbon and commentaries on it as references, even if you study the EU treaties in force.
Ralf Grahn
The General Council of the European Central Bank is the transitional link between the Eurosystem and the EU members with a national currency and a so called derogation.
This blog post is dedicated to our readers in Bulgaria, the Czech Republic, Denmark, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia, Sweden and the United Kingdom.
***
Current treaty
The current Treaty establishing the European Community (TEC) sets out Transitional provisions in Chapter 4 of Title VII Economic and monetary policy, in Part Three Community policies (in the latest codified version of the treaties, Official Journal 29.12.2006 C 321 E/93─101).
Chapter 4 Transitional provisions contains Articles 116 to 124 TEC.
***
General Council of the ECB
Article 123(3) TEC sets up the General Council of the ECB as a transitional body:
Article 123(3) TEC
-----
3. If and as long as there are Member States with a derogation, and without prejudice to
Article 107(3) of this Treaty, the General Council of the ECB referred to in Article 45 of the
Statute of the ESCB shall be constituted as a third decision-making body of the ECB.
-----
***
ECB decision-making bodies
Since the General Council of the ECB is seen as a transitory exception to the institutional framework of the European Central Bank, the referral to Article 107(3) TEC reminds us of the ordinary decision-making bodies of the ECB:
Article 107(3) TEC
-----
3. The ESCB shall be governed by the decision-making bodies of the ECB which shall be the Governing Council and the Executive Board.
-----
***
General Council tasks
At the start of the second stage of economic and monetary union (EMU), the European Monetary Institute (EMI) was established to prepare the establishment of the European Central Bank (ECB) and the introduction of the euro currency (third stage of EMU).
Article 117(2) TEC mentions a number of EMI’s tasks. EMI has been replaced by the ECB.
Article 117(2) TEC
-----
2. The EMI shall:
— strengthen cooperation between the national central banks,
— strengthen the coordination of the monetary policies of the Member States, with the aim of ensuring price stability,
— monitor the functioning of the European Monetary System,
— hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets,
— take over the tasks of the European Monetary Cooperation Fund, which shall be dissolved; the modalities of dissolution are laid down in the Statute of the EMI,
— facilitate the use of the ecu and oversee its development, including the smooth functioning of
the ecu clearing system.
-----
***
ESCB Statute
Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (1992), in the latest consolidated version of the treaties OJ 29.12.2006 C 321 E/256, has a Chapter IX Transitional and other provisions for the ESCB.
Article 43 General provision excludes member states with a derogation from enumerated rights and obligations.
Article 44 Transitional tasks of the ECB confers the tasks of the EMI on the ECB and sets out the advisory task of the ECB during the preparation of abrogation of derogations.
Article 45 The General Council of the ECB institutes the General Council as a third decision-making body of the ECB and sets out the institutional basics. Since Article 45 of the ESCB Statute is referred to in Article 123(3) TEC, here is the wording:
Article 45 ESCB Statute
The General Council of the ECB
45.1. Without prejudice to Article 107(3) of this Treaty, the General Council shall be constituted as a third decision-making body of the ECB.
45.2. The General Council shall comprise the President and Vice-President of the ECB and the Governors of the national central banks. The other members of the Executive Board may participate, without having the right to vote, in meetings of the General Council.
45.3. The responsibilities of the General Council are listed in full in Article 47 of this Statute.
Article 46 Rules of Procedure of the General Council.
Article 47 Responsibilities of the General Council.
Article 48 Transitional provisions for the capital of the ECB.
-----
Article 53 Applicability of the transitional provisions states that as long as there are member states with a derogation, Articles 43 to 48 shall be applicable.
***
Draft Constitution
The euro currency had been introduced, and the euro banknotes and coins were in circulation, when the European Convention deliberated institutional reform of the European Union. It is hardly surprising that the Convention proposed a reworked section with the aim to simplify and to clarify the transitional provisions.
Section 4 Transitional provisions comprises Articles III-91 to III-96 of the draft Constitution (OJ 18.7.2003 C 169/45─46).
Article III-93 of the draft Constitution is a consolidation and update of the treaty provisions we looked at above:
SECTION 4
Transitional provisions
Article III-93 Draft Constitution
1. If and as long as there are Member States with a derogation, and without prejudice to Article III-79(3), the General Council of the European Central Bank referred to in Article 45 of the Statute of the European System of Central Banks and the European Central Bank shall be constituted as a third decisionmaking body of the European Central Bank.
2. If and as long as there are Member States with a derogation, the European Central Bank shall, as regards those Member States:
(a) strengthen cooperation between the national central banks;
(b) strengthen the coordination of the monetary policies of the Member States, with the aim of ensuring price stability;
(c) monitor the functioning of the exchange-rate mechanism;
(d) hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets;
(e) carry out the former tasks of the European Monetary Cooperation Fund, previously taken over by the European Monetary Institute.
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Finland
The Finnish government reported on the results of the European Convention in Valtioneuvoston selonteko Eduskunnalle konventin tuloksista ja valmistautumisesta hallitusten väliseen konferenssiin (VNS 2/2003 vp). Finland had adopted the euro. A section discussed economic and monetary policy (8.5 Talous. ja rahapolitiikka) on pages 65 to 67, but I found nothing specific about Article III-93 of the draft Constitution.
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Sweden
Ahead of the intergovernmental conference, the Swedish government presented its views in a memorandum, Regeringens skrivelse 2003/04:13 Europeiska konventet om EU:s framtid (2 October 2003).
Sweden had not negotiated an opt-out from the treaty obligation to introduce the euro currency, but still the government had arranged a referendum on the adoption. The negative referendum result, which left Sweden in legal limbo, was fresh.
If the updated Article III-93 of the draft Constitution had little practical significance for Finland, the cursory treatment of transitional monetary provisions by the Swedish government may have had other reasons. Anyway, I found no specific mention of draft Constitution Article III-93 in the memorandum.
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de Poncins
Étienne de Poncins presented the text of Article III-93 in Vers une Constitution européenne (Éditions 10/18, 2003), page 315, without comment.
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Constitutional Treaty
The transitional EMU provisions of the intergovernmental conference (IGC 2004) are found in Section 5 Transitional provisions, comprising Articles III-197 to 202 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/86─90).
Article III-199 Constitution
1. If and as long as there are Member States with a derogation, and without prejudice to Article III-187(1), the General Council of the European Central Bank referred to in Article 45 of the Statute of the European System of Central Banks and of the European Central Bank shall be constituted as a third decision-making body of the European Central Bank.
2. If and as long as there are Member States with a derogation, the European Central Bank shall, as regards those Member States:
(a) strengthen cooperation between the national central banks;
(b) strengthen the coordination of the monetary policies of the Member States, with the aim of ensuring price stability;
(c) monitor the functioning of the exchange-rate mechanism;
(d) hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets;
(e) carry out the former tasks of the European Monetary Cooperation Fund which had subsequently been taken over by the European Monetary Institute.
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Let us see it our standard references contribute anything towards our understanding of the provision.
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Sweden
The government of Sweden, still outside the eurozone as a member state with a derogation, offered a short and bland description of the aims of economic and monetary union (EMU) in the draft ratification bill, Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 June 2005), page 171:
.
”Den ekonomiska och monetära unionen (EMU) är ett samarbete inom EU som syftar till att samordna medlemsländernas ekonomiska politik och att införa en gemensam valuta. EMU har genomförts i tre etapper. Den sista etappen inleddes 1999 och innebär en fullbordad valutaunion med gemensam centralbank (Europeiska centralbanken) samt gemensam valuta och penningpolitik. En förutsättning för valutaunionen har varit och är att de deltagande ländernas ekonomier befinner sig på ungefär samma nivå. Ett antal ekonomiska krav som ett land måste uppfylla för att få delta i valutaunionen har därför ställts upp, de s.k. konvergenskriterierna. För att säkerställa sunda offentliga finanser inom unionen har därför EU inrättat den s.k. stabilitets- och tillväxtpakten.”
The Swedish government did not mention Article III-199 of the Constitution specifically, although the national central bank (Sveriges Riksbank) participates in the General Council of the European Central Bank.
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Finland
In Finland, the government’s ratification bill, Hallituksen esitys Eduskunnalle Euroopan perustuslaista tehdyn sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta (HE 67/2006 vp), mentioned Article III-199 of the Constitution on page 185. The government remarked on the essential similarity of Article III-199 with Article 123(3) TEC and Article 117(2) TEC save for technical adjustments. The Finnish government mentioned that Article III-199 applies to the states, which have not yet adopted the euro:
”III-199 artikla vastaa asiasisällöltään SEY 123 artiklan kolmatta kohtaa sekä SEY 117 artiklan toista kohtaa teknisiä muutoksia lukuun ottamatta. III-199 artikla koskee Euroopan keskuspankin yleisneuvostoa sekä Euroopan keskuspankin tehtäviä niihin valtioihin liittyen, jotka eivät ole vielä ottaneet euroa käyttöön.”
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Original Lisbon Treaty
In Article 2, point 103, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) managed to adopt the substance of the Convention and Constitution proposals, but the amendments were inserted in the ‘usual’, i.e. unreadable manner adopted by the IGC 2007 (OJ 17.12.2007 C 306/79).
This is the wording the EU citizens were offered until the belated publication of the consolidated versions of the Lisbon Treaty:
103) Article 118 shall be repealed. A new Article 118a shall be inserted as follows:
(a) paragraph 1 thereof shall take over the text of Article 123(3); the words ‘of this Treaty’ shall be deleted;
(b) paragraph 2 thereof shall take over the text of the first five indents of Article 117(2); the five indents shall be amended as set out below and shall be preceded by the following introductory words:
‘If and as long as there are Member States with a derogation, the European Central Bank shall, as regards those Member States:’
(i) in the third indent, the words ‘European Monetary System’ shall be replaced by ‘exchange-rate mechanism’;
(ii) the fifth indent shall be replaced by the following:
‘— carry out the former tasks of the European Monetary Cooperation Fund which had subsequently been taken over by the European Monetary Institute.’.
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Renumbering
The Treaty on the Functioning of the European Union (TFEU) table of equivalences confirms that the new Article 118a TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 141 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII, and in the renumbered Chapter 5 ‘Transitional provisions’ (OJ 17.12.2007 C 306/215).
(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
A readable Article 141 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 115/110:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 5 Transitional provisions
Article 141 TFEU
(ex Articles 123(3) and 117(2) first five indents, TEC)
1. If and as long as there are Member States with a derogation, and without prejudice to Article 129(1), the General Council of the European Central Bank referred to in Article 44 of the Statute of the ESCB and of the ECB shall be constituted as a third decision-making body of the European Central Bank.
2. If and as long as there are Member States with a derogation, the European Central Bank shall, as regards those Member States:
— strengthen cooperation between the national central banks,
— strengthen the coordination of the monetary policies of the Member States, with the aim of ensuring price stability,
— monitor the functioning of the exchange-rate mechanism,
— hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets,
— carry out the former tasks of the European Monetary Cooperation Fund which had subsequently been taken over by the European Monetary Institute.
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ESCB Statute ─ transitional provisions
In the consolidated versions of the Lisbon Treaty, the Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Banks sets out the transitional EMU provisions in more detail in Chapter IX Transitional and other provisions for the ESCB (OJ 9.5.2008 C 115/247─250):
CHAPTER IX
TRANSITIONAL AND OTHER PROVISIONS FOR THE ESCB
Article 42 (ex Article 43)
General provisions
42.1. A derogation as referred to in Article 139 of the Treaty on the Functioning of the European Union shall entail that the following Articles of this Statute shall not confer any rights or impose any obligations on the Member State concerned: 3, 6, 9.2, 12.1, 14.3, 16, 18, 19, 20, 22, 23, 26.2, 27, 30, 31, 32, 33, 34, and 49.
42.2. The central banks of Member States with a derogation as specified in Article 139(1) of the Treaty on the Functioning of the European Union shall retain their powers in the field of monetary policy according to national law.
42.3. In accordance with Article 139 of the Treaty on the Functioning of the European Union, ‘Member States’ shall be read as ‘Member States whose currency is the euro’ in the following Articles of this Statute: 3, 11.2 and 19.
42.4. ‘National central banks’ shall be read as ‘central banks of Member States whose currency is the euro’ in the following Articles of this Statute: 9.2, 10.2, 10.3, 12.1, 16, 17, 18, 22, 23, 27, 30, 31, 32, 33.2 and 49.
42.5. ‘Shareholders’ shall be read as ‘central banks of Member States whose currency is the euro’ in Articles 10.3 and 33.1.
42.6. ‘Subscribed capital of the ECB’ shall be read as ‘capital of the ECB subscribed by the central banks of Member States whose currency is the euro’ in Articles 10.3 and 30.2.
Article 43 (ex Article 44)
Transitional tasks of the ECB
The ECB shall take over the former tasks of the EMI referred to in Article 141(2) of the Treaty on the Functioning of the European Union which, because of the derogations of one or more Member States, still have to be performed after the introduction of the euro.
The ECB shall give advice in the preparations for the abrogation of the derogations specified in Article 140 of the Treaty on the Functioning of the European Union.
Article 44 (ex Article 45)
The General Council of the ECB
44.1. Without prejudice to Article 129(3) of the Treaty on the Functioning of the European Union, the General Council shall be constituted as a third decision-making body of the ECB.
44.2. The General Council shall comprise the President and Vice-President of the ECB and the Governors of the national central banks. The other members of the Executive Board may participate, without having the right to vote, in meetings of the General Council.
44.3. The responsibilities of the General Council are listed in full in Article 46 of this Statute.
Article 45 (ex Article 46)
Rules of Procedure of the General Council
45.1. The President or, in his absence, the Vice-President of the ECB shall chair the General Council of the ECB.
45.2. The President of the Council and a Member of the Commission may participate, without having the right to vote, in meetings of the General Council.
45.3. The President shall prepare the meetings of the General Council.
45.4. By way of derogation from Article 12.3, the General Council shall adopt its Rules of Procedure.
45.5. The Secretariat of the General Council shall be provided by the ECB.
Article 46 (ex Article 47)
Responsibilities of the General Council
46.1. The General Council shall:
— perform the tasks referred to in Article 43;
— contribute to the advisory functions referred to in Articles 4 and 25.1.
46.2. The General Council shall contribute to:
— the collection of statistical information as referred to in Article 5;
— the reporting activities of the ECB as referred to in Article 15;
— the establishment of the necessary rules for the application of Article 26 as referred to in Article 26.4;
— the taking of all other measures necessary for the application of Article 29 as referred to in Article 29.4;
— the laying down of the conditions of employment of the staff of the ECB as referred to in Article 36.
46.3. The General Council shall contribute to the necessary preparations for irrevocably fixing the exchange rates of the currencies of Member States with a derogation against the euro as referred to in Article 140(3) of the Treaty on the Functioning of the European Union.
46.4. The General Council shall be informed by the President of the ECB of decisions of the Governing Council.
Article 47 (ex Article 48)
Transitional provisions for the capital of the ECB
In accordance with Article 29.1, each national central bank shall be assigned a weighting in the key for subscription of the ECB's capital. By way of derogation from Article 28.3, central banks of Member States with a derogation shall not pay up their subscribed capital unless the General Council, acting by a majority representing at least two thirds of the subscribed capital of the ECB and at least half of the shareholders, decides that a minimal percentage has to be paid up as a contribution to the operational costs of the ECB.
Article 48 (ex Article 49)
Deferred payment of capital, reserves and provisions of the ECB
48.1. The central bank of a Member State whose derogation has been abrogated shall pay up its subscribed share of the capital of the ECB to the same extent as the central banks of other Member States without a derogation, and shall transfer to the ECB foreign reserve assets in accordance with Article 30.1. The sum to be transferred shall be determined by multiplying the euro value at current exchange rates of the foreign reserve assets which have already been transferred to the ECB in accordance with Article 30.1, by the ratio between the number of shares subscribed by the national central bank concerned and the number of shares already paid up by the other national central banks.
48.2. In addition to the payment to be made in accordance with Article 48.1, the central bank concerned shall contribute to the reserves of the ECB, to those provisions equivalent to reserves, and to the amount still to be appropriated to the reserves and provisions corresponding to the balance of the profit and loss account as at 31 December of the year prior to the abrogation of the derogation. The sum to be contributed shall be determined by multiplying the amount of the reserves, as defined above and as stated in the approved balance sheet of the ECB, by the ratio between the number of shares subscribed by the central bank concerned and the number of shares already paid up by the other central banks.
48.3. Upon one or more countries becoming Member States and their respective national central banks becoming part of the ESCB, the subscribed capital of the ECB and the limit on the amount of foreign reserve assets that may be transferred to the ECB shall be automatically increased. The increase shall be determined by multiplying the respective amounts then prevailing by the ratio, within the expanded capital key, between the weighting of the entering national central banks concerned and the weighting of the national central banks already members of the ESCB. Each national central bank's weighting in the capital key shall be calculated by analogy with Article 29.1 and in compliance with Article 29.2. The reference periods to be used for the statistical data shall be identical to those applied for the latest quinquennial adjustment of the weightings under Article 29.3.
Article 49 (ex Article 52)
Exchange of banknotes in the currencies of the Member States
Following the irrevocable fixing of exchange rates in accordance with Article 140 of the Treaty on the Functioning of the European Union, the Governing Council shall take the necessary measures to ensure that banknotes denominated in currencies with irrevocably fixed exchange rates are exchanged by the national central banks at their respective par values.
Article 50 (ex Article 53)
Applicability of the transitional provisions
If and as long as there are Member States with a derogation, Articles 42 to 47 shall be applicable.
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Sweden
Even if Sweden is one of the EU member states with a derogation, the most artificial one at that, I found nothing about Article 118a TFEU (ToL) in the Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008).
Have they confounded the properties of EMU, the economic and monetary union, with those of emu, the bird?
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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 5 (Dispositions transitoires) on page 260 to 261. Their characterization of Articles 141 to 144 TFEU is succinct:
« Les art. 141 à 144 TFUE comprennent les dispositions applicables aux États membres faisant l’objet d’une dérogation, sans changement notable. »
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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 141 TFEU (on page 13):
“Draws on and updates Articles 123(3) and 117(2) TEC.”
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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. There was a short explanation of Article 118a TFEU (ToL), on page 64:
“A new Article 118a (Constitution Article III-199) updates present Articles 117(2) and 123(3), providing for Member States with a derogation from EMU the institutional machinery (including the European Monetary Institute and the General Council of the ECB) to monitor their progress towards the adoption of the euro.”
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Ironies
One of the ironies uncovered during this research was that the government of the EU member state most peculiarly affected by the transitional EMU provisions, i.e. Sweden, had nothing to say about the General Council of the European Central Bank in voluminous legislative materials.
Another irony is that the Lisbon Treaty, although not in force, is sometimes clearer and more up-to-date in its consolidated versions than the existing treaties, even where there are no ‘institutional innovations’ to speak of.
In other words, it is advisable to use the Treaty of Lisbon and commentaries on it as references, even if you study the EU treaties in force.
Ralf Grahn
Tuesday, 18 November 2008
Euro currency: Convergence criteria
During the present financial turmoil and the economic downturn, the rules concerning economic and monetary union (EMU) are under even closer scrutiny in European capitals than normally. The euro is, relatively speaking, seen as a safe harbour, but circumstances make it harder to fulfil the criteria for the third stage of EMU.
Adopting the euro currency is a treaty obligation for every EU member state except the United Kingdom and Denmark, but in order to join the Eurozone a member state has to qualify.
The hurdles are set out in the so called convergence criteria, or Maastricht criteria. Their aim is to bridge the gap between the single currency area and national economic and fiscal policies.
Given the obligation to adopt the euro currency and the move from a national currency to the euro, the convergence criteria are placed among the transitional provisions at treaty level.
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Current treaty
The current Treaty establishing the European Community (TEC) sets out Transitional provisions in Chapter 4 of Title VII Economic and monetary policy, in Part Three Community policies (in the latest codified version of the treaties, Official Journal 29.12.2006 C 321 E/93─101).
Chapter 4 Transitional provisions contains Articles 116 to 124 TEC.
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Convergence criteria
The convergence criteria are laid out in general terms in Article 121(1) TEC (ex Article 109j). The transitional European Monetary Institute (EMI) has since been replaced by the European Central Bank (ECB) and the ecu by the euro:
Article 121 TEC
1. The Commission and the EMI shall report to the Council on the progress made in the fulfilment by the Member States of their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between each Member State's national legislation, including the statutes of its national central bank, and Articles 108 and 109 of this Treaty and the Statute of the ESCB. The reports shall also examine the achievement of a high degree of sustainable convergence by reference to the fulfilment by each Member State of the following criteria:
— the achievement of a high degree of price stability; this will be apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability,
— the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article 104(6),
— the observance of the normal fluctuation margins provided for by the exchange-rate mechanism of the European Monetary System, for at least two years, without devaluing against the currency of any other Member State,
— the durability of convergence achieved by the Member State and of its participation in the exchange-rate mechanism of the European Monetary System being reflected in the long‑term interest-rate levels.
The four criteria mentioned in this paragraph and the relevant periods over which they are to be respected are developed further in a Protocol annexed to this Treaty. The reports of the Commission and the EMI shall also take account of the development of the ecu, the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.
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Protocol on convergence criteria
Independent central bank plus low inflation, moderate government deficit, no devaluation and low interest rates; the convergence criteria are set out in more detail in Protocol (No 21) on the convergence criteria referred to in Article 121 of the Treaty establishing the European Community (1992):
THE HIGH CONTRACTING PARTIES,
DESIRING to lay down the details of the convergence criteria which shall guide the Community in taking decisions on the passage to the third stage of economic and monetary union, referred to in Article 121(1) of this Treaty,
HAVE AGREED upon the following provisions, which shall be annexed to the Treaty establishing the European Community.
Article 1
The criterion on price stability referred to in the first indent of Article 121(1) of this Treaty shall mean that a Member State has a price performance that is sustainable and an average rate of inflation, observed over a period of one year before the examination, that does not exceed by more than 1 ½ percentage points that of, at most, the three best performing Member States in terms of price stability. Inflation shall be measured by means of the consumer price index on a comparable basis, taking into account differences in national definitions.
Article 2
The criterion on the government budgetary position referred to in the second indent of Article 121(1) of this Treaty shall mean that at the time of the examination the Member State is not the subject of a Council decision under Article 104(6) of this Treaty that an excessive deficit exists.
Article 3
The criterion on participation in the exchange-rate mechanism of the European Monetary System referred to in the third indent of Article 121(1) of this Treaty shall mean that a Member State has respected the normal fluctuation margins provided for by the exchange-rate mechanism on the European Monetary System without severe tensions for at least the last two years before the examination. In particular, the Member State shall not have devalued its currency's bilateral central rate against any other Member State's currency on its own initiative for the same period
Article 4
The criterion on the convergence of interest rates referred to in the fourth indent of Article 121(1) of this Treaty shall mean that, observed over a period of one year before the examination, a Member State has had an average nominal long-term interest rate that does not exceed by more than 2 percentage points that of, at most, the three best performing Member States in terms of price stability. Interest rates shall be measured on the basis of long-term government bonds or comparable securities, taking into account differences in national definitions.
Article 5
The statistical data to be used for the application of this Protocol shall be provided by the Commission.
Article 6
The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, the EMI or the ECB as the case may be, and the Committee referred to in Article 114, adopt appropriate provisions to lay down the details of the convergence criteria referred to in Article 121 of this Treaty, which shall then replace this Protocol.
(Source: Pages 295 and 296 in the consolidated version of the treaties.)
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Abrogating a derogation
The second sentence of Article 122(2) TEC (ex Article 109k) lays out the procedure for abrogating a derogation, i.e. for joining the euro area:
Article 122(2) TEC
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2. At least once every two years, or at the request of a Member State with a derogation, the Commission and the ECB shall report to the Council in accordance with the procedure laid down in Article 121(1). After consulting the European Parliament and after discussion in the Council, meeting in the composition of the Heads of State or Government, the Council shall, acting by a qualified majority on a proposal from the Commission, decide which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in Article 121(1), and abrogate the derogations of the Member States concerned.
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Conversion measures
Article 123(5) TEC (ex Article 109l) indicates the exchange rate and the conversion measures to be settled, when a member state is joining the euro area:
Article 123(5) TEC
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5. If it is decided, according to the procedure set out in Article 122(2), to abrogate a derogation, the Council shall, acting with the unanimity of the Member States without a derogation and the Member State concerned, on a proposal from the Commission and after consulting the ECB, adopt the rate at which the ecu shall be substituted for the currency of the Member State concerned, and take the other measures necessary for the introduction of the ecu as the single currency in the Member State concerned.
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Draft Constitution
The euro currency had been introduced, and the euro banknotes and coins were in circulation, when the European Convention deliberated institutional reform of the European Union. It is hardly surprising that the Convention proposed a reworked section with the aim to simplify and to clarify the transitional provisions.
Section 4 Transitional provisions comprises Articles III-91 to III-96 of the draft Constitution (OJ 18.7.2003 C 169/45─46).
Article III-92 of the draft Constitution proposed a consolidation of the treaty provisions we looked at above:
SECTION 4
Transitional provisions
Article III-92 Draft Constitution
1. At least once every two years, or at the request of a Member State with a derogation, the Commission and the European Central Bank shall report to the Council of Ministers on the progress made by the Member States with a derogation in fulfilling their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between each of these Member States' national legislation, including the statutes of its national central bank, and Articles III-80 and III-81 and the Statute of the European System of Central Banks and the European Central Bank. The reports shall also examine whether a high degree of sustainable convergence has been achieved, by analysing how far each of these Member States has fulfilled the following criteria:
(a) the achievement of a high degree of price stability; this will be apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability;
(b) the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article III-76(6);
(c) the observance of the normal fluctuation margins provided for by the exchange-rate mechanism for at least two years, without devaluing against the euro;
(d) the durability of convergence achieved by the Member State with a derogation and of its participation in the exchangerate mechanism, being reflected in the long-term interest-rate levels.
The four criteria mentioned in this paragraph and the relevant periods over which they are to be respected are developed further in the Protocol on the convergence criteria. The reports of the Commission and the European Central Bank shall also take account of the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.
2. After consulting the European Parliament and after discussion in the European Council, the Council of Ministers, on a proposal from the Commission, shall adopt a European decision establishing which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in paragraph 1, and shall abrogate the derogations of the Member States concerned.
3. If it is decided, according to the procedure set out in paragraph 2, to abrogate a derogation, the Council of Ministers shall, on a proposal from the Commission, with the unanimity of the members representing Member States without a derogation and the Member State concerned, adopt the European regulations or decisions irrevocably fixing the rate at which the euro is to be substituted for the currency of the Member State concerned, and laying down the other measures necessary for the introduction of the euro as the single currency in that Member State. The Council of Ministers shall act after consulting the European Central Bank.
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Protocol
The European Convention indicated the existence of a Protocol on the convergence criteria, but the Convention did not propose its own version.
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Finland
The Finnish government reported on the results of the European Convention in Valtioneuvoston selonteko Eduskunnalle konventin tuloksista ja valmistautumisesta hallitusten väliseen konferenssiin (VNS 2/2003 vp). Finland had adopted the euro, so the section on economic and monetary policy (8.5 Talous. ja rahapolitiikka) on pages 65 to 67 did not discuss the convergence criteria or the procedures to abrogate a derogation and to take the conversion measures.
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Sweden
Ahead of the intergovernmental conference, the Swedish government presented its views in Regeringens skrivelse 2003/04:13 Europeiska konventet om EU:s framtid (2 October 2003). Non-euro Sweden was fairly supportive of effective decision-making in the eurozone and international representation for the euro area in international financial institutions (page 49─50), but on the heels of the negative euro referendum the government had nothing to say about the convergence criteria or euro conversion.
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de Poncins
Étienne de Poncins presented the text of Article III-92 in Vers une Constitution européenne (Éditions 10/18, 2003), pages 313 and 314, without comment.
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Constitutional Treaty
The transitional EMU provisions of the intergovernmental conference (IGC 2004) are found in Section 5 Transitional provisions, comprising Articles III-197 to 202 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/86─90).
Article III-198 Constitution
1. At least once every two years, or at the request of a Member State with a derogation, the Commission and the European Central Bank shall report to the Council on the progress made by the Member States with a derogation in fulfilling their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between the national legislation of each of these Member States, including the statutes of its national central bank, and Articles III-188 and III-189 and the Statute of the European System of Central Banks and of the European Central Bank. The reports shall also examine whether a high degree of sustainable convergence has been achieved, by analysing how far each of these Member States has fulfilled the following criteria:
(a) the achievement of a high degree of price stability; this is apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability;
(b) the sustainability of the government financial position; this is apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article III-184(6);
(c) the observance of the normal fluctuation margins provided for by the exchange-rate mechanism of the European monetary system, for at least two years, without devaluing against the euro;
(d) the durability of convergence achieved by the Member State with a derogation and of its participation in the exchange-rate mechanism, being reflected in the long-term interest-rate levels.
The four criteria laid down in this paragraph and the relevant periods over which they are to be respected are developed further in the protocol on the convergence criteria. the reports from the commission and the european central bank shall also take account of the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.
2. After consulting the European Parliament and after discussion in the European Council, the Council, on a proposal from the Commission, shall adopt a European decision establishing which Member States with a derogation fulfil the necessary conditions on the basis of the criteria laid down in paragraph 1, and shall abrogate the derogations of the Member States concerned.
The Council shall act having received a recommendation of a qualified majority of those among its members representing Member States whose currency is the euro. These members shall act within six months of the Council receiving the Commission's proposal.
The qualified majority referred to in the second subparagraph shall be defined as at least 55 % of these members of the Council, representing Member States comprising at least 65 % of the population of the participating Member States. A blocking minority must include at least the minimum number of these 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.
3. If it is decided, in accordance with the procedure set out in paragraph 2, to abrogate a derogation, the Council shall, on a proposal from the Commission, adopt the European regulations or decisions irrevocably fixing the rate at which the euro is to be substituted for the currency of the Member State concerned, and laying down the other measures necessary for the introduction of the euro as the single currency in that Member State. The Council shall act with the unanimous agreement of the members representing Member States whose currency is the euro and the Member State concerned, after consulting the European Central Bank.
***
Protocol
The intergovernmental conference (IGC 2004) adopted a Protocol (No 11) on the convergence criteria (OJ 16.12.2004 C 310/339─340).
***
Let us see it our standard references contribute anything towards our understanding of the provision.
***
Sweden
The government of Sweden, still outside the eurozone, offered a short and bland description of the aims of economic and monetary union (EMU) in the draft ratification bill, Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 June 2005), page 171:
.
”Den ekonomiska och monetära unionen (EMU) är ett samarbete inom EU som syftar till att samordna medlemsländernas ekonomiska politik och att införa en gemensam valuta. EMU har genomförts i tre etapper. Den sista etappen inleddes 1999 och innebär en fullbordad valutaunion med gemensam centralbank (Europeiska centralbanken) samt gemensam valuta och penningpolitik. En förutsättning för valutaunionen har varit och är att de deltagande ländernas ekonomier befinner sig på ungefär samma nivå. Ett antal ekonomiska krav som ett land måste uppfylla för att få delta i valutaunionen har därför ställts upp, de s.k. konvergenskriterierna. För att säkerställa sunda offentliga finanser inom unionen har därför EU inrättat den s.k. stabilitets- och tillväxtpakten.”
In addition, the Swedish government mentioned Article III-198 Constitution in connection with the amended decision-making procedures.
***
Finland
In Finland, the government’s ratification bill, Hallituksen esitys Eduskunnalle Euroopan perustuslaista tehdyn sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta (HE 67/2006 vp), mentioned Article III-198 Constitution on page 185. In addition to the similarities with the current treaty provisions, the Finnish government mentioned the new recommendation from the euro area countries:
”III-198 artikla, joka koskee uusien jäsenvaltioiden hyväksymistä euron käyttäjiksi, vastaa asiallisesti SEY 121 artiklan ensimmäistä kohtaa, SEY 122 artiklan toista kohtaa sekä SEY 123 artiklan neljännen kohdan ensimmäistä lausetta.
Artiklan 2 kohdassa olevia päätöksentekomenettelysäännöksiä on kuitenkin uusittu. Uusitun määräyksen mukaan neuvoston on, ennen kuin se tekee normaalikokoonpanossaan lopullisen päätöksen uuden jäsenvaltion hyväksymisestä euron käyttäjäksi, saatava suositus euron käyttöön ottaneiden jäsenvaltioiden edustajilta. Kyseinen suositus annetaan määräenemmistöllä, joka on määritelty III-179 artiklan yhteydessä.”
***
Original Lisbon Treaty
In Article 2, point 102, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) managed to adopt the substance of the Constitution’s proposal using a drafting technique apt to drive even the most ardent supporter of European integration into deep despair (OJ 17.12.2007 C 306/77─78). This is the wording the EU citizens were offered until the publication of the consolidated versions of the Lisbon Treaty:
102) Article 117 shall be repealed, with the exception of the first five indents of paragraph 2 thereof, which shall become the first five indents of paragraph 2 of Article 118a; they shall be amended as set out in point 103 below. A new Article 117a shall be inserted as follows:
(a) paragraph 1 thereof shall take over the wording of Article 121(1), with the following amendments:
(i) throughout the paragraph, the words ‘the EMI’ shall be replaced by ‘the European Central Bank’;
(ii) at the beginning of the first subparagraph, the following shall be inserted: ‘At least once every two years, or at the request of a Member State with a derogation,’;
(iii) in the first subparagraph, first sentence, the words ‘the progress made in the fulfilment by the Member States of their obligations’ shall be replaced by ‘the progress made by the Member States with a derogation in fulfilling their obligations’;
(iv) in the first subparagraph, second sentence, the words ‘each Member State's national legislation’ shall be replaced by ‘the national legislation of each of these Member States’ and the words ‘of this Treaty’ shall be deleted;
(v) in the third indent of the first subparagraph, the words ‘against the currency of any other Member State’ shall be replaced by ‘against the euro;’;
(vi) in the fourth indent of the first subparagraph, the words ‘the Member State’ shall be replaced by ‘the Member State with a derogation’ and the words ‘of the European Monetary System’ shall be deleted;
(vii) in the second subparagraph, the words ‘the development of the ecu’ shall be deleted;
(b) paragraph 2 thereof shall take over the wording of the second sentence of Article 122(2), with the following amendments:
(i) at the end of the text, the words ‘set out in Article 121(1)’ shall be replaced by ‘set out in paragraph 1’;
(ii) the following new second and third subparagraphs shall be added:
‘The Council shall act having received a recommendation of a qualified majority of those among its members representing Member States whose currency is the euro. These members shall act within six months of the Council receiving the Commission's proposal.
The qualified majority of the said members, as referred to in the second subparagraph, shall be defined in accordance with Article 205(3)(a).’;
(c) paragraph 3 thereof shall take over the wording of Article 123(5), with the following amendments:
(i) at the beginning of the paragraph, the words ‘If it is decided, according to the procedure set out in Article 122(2), to abrogate a derogation,’ shall be replaced by ‘If it is decided, in accordance with the procedure set out in paragraph 2, to abrogate a derogation,’;
(ii) the words ‘adopt the rate’ shall be replaced by ‘irrevocably fix the rate’.
***
Renumbering
The Treaty on the Functioning of the European Union (TFEU) table of equivalences confirms that the new Article 117a TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 140 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII, and in the renumbered Chapter 5 ‘Transitional provisions’ (OJ 17.12.2007 C 306/215).
(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.)
***
Consolidated Lisbon Treaty: TFEU
A readable Article 140 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 115/108─110:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 5 Transitional provisions
Article 140 TFEU
(ex Articles 121(1), 122(2), second sentence, and 123(5) TEC)
1. At least once every two years, or at the request of a Member State with a derogation, the Commission and the European Central Bank shall report to the Council on the progress made by the Member States with a derogation in fulfilling their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between the national legislation of each of these Member States, including the statutes of its national central bank, and Articles 130 and 131 and the Statute of the ESCB and of the ECB. The reports shall also examine the achievement of a high degree of sustainable convergence by reference to the fulfilment by each Member State of the following criteria:
— the achievement of a high degree of price stability; this will be apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability,
— the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article 126(6),
— the observance of the normal fluctuation margins provided for by the exchange-rate mechanism of the European Monetary System, for at least two years, without devaluing against the euro,
— the durability of convergence achieved by the Member State with a derogation and of its participation in the exchange-rate mechanism being reflected in the long-term interest-rate levels.
The four criteria mentioned in this paragraph and the relevant periods over which they are to be respected are developed further in a Protocol annexed to the Treaties. The reports of the Commission and the European Central Bank shall also take account of the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.
2. After consulting the European Parliament and after discussion in the European Council, the Council shall, on a proposal from the Commission, decide which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in paragraph 1, and abrogate the derogations of the Member States concerned.
The Council shall act having received a recommendation of a qualified majority of those among its members representing Member States whose currency is the euro. These members shall act within six months of the Council receiving the Commission's proposal.
The qualified majority of the said members, as referred to in the second subparagraph, shall be defined in accordance with Article 238(3)(a).
3. If it is decided, in accordance with the procedure set out in paragraph 2, to abrogate a derogation, the Council shall, acting with the unanimity of the Member States whose currency is the euro and the Member State concerned, on a proposal from the Commission and after consulting the European Central Bank, irrevocably fix the rate at which the euro shall be substituted for the currency of the Member State concerned, and take the other measures necessary for the introduction of the euro as the single currency in the Member State concerned.
***
Protocol on the convergence criteria
For those who want to read Article 140 TFEU alongside the relevant Protocol on the convergence criteria in an updated form, here is the text from the consolidated version of the Lisbon Treaty (pages 281 and 282):
PROTOCOL (No 13)
ON THE CONVERGENCE CRITERIA
THE HIGH CONTRACTING PARTIES,
DESIRING to lay down the details of the convergence criteria which shall guide the Union in taking decisions to end the derogations of those Member States with a derogation, referred to in Article 140 of the Treaty on the Functioning of the European 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 criterion on price stability referred to in the first indent of Article 140(1) of the Treaty on the Functioning of the European Union shall mean that a Member State has a price performance that is sustainable and an average rate of inflation, observed over a period of one year before the examination, that does not exceed by more than 1 ½ percentage points that of, at most, the three best performing Member States in terms of price stability. Inflation shall be measured by means of the consumer price index on a comparable basis taking into account differences in national definitions.
Article 2
The criterion on the government budgetary position referred to in the second indent of Article 140(1) of the said Treaty shall mean that at the time of the examination the Member State is not the subject of a Council decision under Article 126(6) of the said Treaty that an excessive deficit exists.
Article 3
The criterion on participation in the Exchange Rate mechanism of the European Monetary System referred to in the third indent of Article 140(1) of the said Treaty shall mean that a Member State has respected the normal fluctuation margins provided for by the exchange-rate mechanism on the European Monetary System without severe tensions for at least the last two years before the examination. In particular, the Member State shall not have devalued its currency's bilateral central rate against the euro on its own initiative for the same period.
Article 4
The criterion on the convergence of interest rates referred to in the fourth indent of Article 140(1) of the said Treaty shall mean that, observed over a period of one year before the examination, a Member State has had an average nominal long-term interest rate that does not exceed by more than two percentage points that of, at most, the three best performing Member States in terms of price stability. Interest rates shall be measured on the basis of long-term government bonds or comparable securities, taking into account differences in national definitions.
Article 5
The statistical data to be used for the application of this Protocol shall be provided by the Commission.
Article 6
The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, the ECB as the case may be, and the Economic and Financial Committee, adopt appropriate provisions to lay down the details of the convergence criteria referred to in Article 140(1) of the said Treaty, which shall then replace this Protocol.
***
Sweden
The Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008), on page 185, mentions the Article 117a in the same terms as the government used about the corresponding Article of the Constitutional Treaty, so it does not go into fine detail:
”I ett flertal fall på området ekonomisk och monetär politik ska rådet fatta beslut med kvalificerad majoritet enligt den nya definition av detta begrepp som införs genom Lissabonfördraget (se även avsnitt 14.4). Det rör sig bl.a. om rådsbeslut om rekommendationer till en medlemsstat som för en politik som inte är förenlig med de allmänna riktlinjerna eller har ett alltför stort underskott (artiklarna 99.4 104.6 och 104.7 i EUF-fördraget), rådsbeslut om antagande av landsspecifika riktlinjer (artikel 115a.1b i EUF-fördraget), rådsbeslut om åtgärder för att säkerställa ett enat externt handlande (artikel 115c.2 i EUF-fördraget) och olika rådsbeslut som rör de s.k. medlemsstaterna med undantag (artiklarna 116a.4 och 117a.2 i EUF-fördraget). Särskilda övergångsbestämmelser när det gäller omröstning i rådet enligt artikel 205.3 i EUF-fördraget finns i artikel 3.4 i ett protokoll om övergångsbestämmelser som fogas till EU-fördraget, EUF-fördraget och Euratomfördraget.”
***
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 5 (Dispositions transitoires) on page 260 to 261. Their description of Article 140 TFEU is succinct:
« L’art. 140 TFUE prévoit la procédure d’entrée d’un nouvel État membre dans la zone euro, pour laquelle la capacité décisionnelle des pays dont la monnaie est l’euro est également renforcée (v. commentaire chapitre précédent). »
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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 140 TFEU (on page 13):
“Draws on Articles 121, 122(2) and 123(5) TEC. Sets out procedure for abrogating a derogation. The provision in paragraph 2 regarding the recommendation of a qualified majority of Member States whose currency is the euro is new.”
***
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. There was a short explanation of Article 117a TFEU (ToL) and the other transitional provisions), on page 64:
“A new Article 117a (Constitution Article III-198) is based on present Articles 121(1), 122(2) and 123(5), but updated to remove references to 1996, 1997 and other dates relating to the introduction of the euro.”
[I have deleted the footnotes, which can be found in the original.]
***
Adopting the euro currency may look more enticing amid the current financial turmoil and the recession, but at the same time the difficulties for the vulnerable member state currencies increase, making it harder to fulfil the convergence criteria.
The Lisbon Treaty does not change much substantially, adding the recommendation by the Eurozone members, but here too the new treaty in its consolidated form would be easier to read and to comprehend than the current one.
Ralf Grahn
Adopting the euro currency is a treaty obligation for every EU member state except the United Kingdom and Denmark, but in order to join the Eurozone a member state has to qualify.
The hurdles are set out in the so called convergence criteria, or Maastricht criteria. Their aim is to bridge the gap between the single currency area and national economic and fiscal policies.
Given the obligation to adopt the euro currency and the move from a national currency to the euro, the convergence criteria are placed among the transitional provisions at treaty level.
***
Current treaty
The current Treaty establishing the European Community (TEC) sets out Transitional provisions in Chapter 4 of Title VII Economic and monetary policy, in Part Three Community policies (in the latest codified version of the treaties, Official Journal 29.12.2006 C 321 E/93─101).
Chapter 4 Transitional provisions contains Articles 116 to 124 TEC.
***
Convergence criteria
The convergence criteria are laid out in general terms in Article 121(1) TEC (ex Article 109j). The transitional European Monetary Institute (EMI) has since been replaced by the European Central Bank (ECB) and the ecu by the euro:
Article 121 TEC
1. The Commission and the EMI shall report to the Council on the progress made in the fulfilment by the Member States of their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between each Member State's national legislation, including the statutes of its national central bank, and Articles 108 and 109 of this Treaty and the Statute of the ESCB. The reports shall also examine the achievement of a high degree of sustainable convergence by reference to the fulfilment by each Member State of the following criteria:
— the achievement of a high degree of price stability; this will be apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability,
— the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article 104(6),
— the observance of the normal fluctuation margins provided for by the exchange-rate mechanism of the European Monetary System, for at least two years, without devaluing against the currency of any other Member State,
— the durability of convergence achieved by the Member State and of its participation in the exchange-rate mechanism of the European Monetary System being reflected in the long‑term interest-rate levels.
The four criteria mentioned in this paragraph and the relevant periods over which they are to be respected are developed further in a Protocol annexed to this Treaty. The reports of the Commission and the EMI shall also take account of the development of the ecu, the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.
***
Protocol on convergence criteria
Independent central bank plus low inflation, moderate government deficit, no devaluation and low interest rates; the convergence criteria are set out in more detail in Protocol (No 21) on the convergence criteria referred to in Article 121 of the Treaty establishing the European Community (1992):
THE HIGH CONTRACTING PARTIES,
DESIRING to lay down the details of the convergence criteria which shall guide the Community in taking decisions on the passage to the third stage of economic and monetary union, referred to in Article 121(1) of this Treaty,
HAVE AGREED upon the following provisions, which shall be annexed to the Treaty establishing the European Community.
Article 1
The criterion on price stability referred to in the first indent of Article 121(1) of this Treaty shall mean that a Member State has a price performance that is sustainable and an average rate of inflation, observed over a period of one year before the examination, that does not exceed by more than 1 ½ percentage points that of, at most, the three best performing Member States in terms of price stability. Inflation shall be measured by means of the consumer price index on a comparable basis, taking into account differences in national definitions.
Article 2
The criterion on the government budgetary position referred to in the second indent of Article 121(1) of this Treaty shall mean that at the time of the examination the Member State is not the subject of a Council decision under Article 104(6) of this Treaty that an excessive deficit exists.
Article 3
The criterion on participation in the exchange-rate mechanism of the European Monetary System referred to in the third indent of Article 121(1) of this Treaty shall mean that a Member State has respected the normal fluctuation margins provided for by the exchange-rate mechanism on the European Monetary System without severe tensions for at least the last two years before the examination. In particular, the Member State shall not have devalued its currency's bilateral central rate against any other Member State's currency on its own initiative for the same period
Article 4
The criterion on the convergence of interest rates referred to in the fourth indent of Article 121(1) of this Treaty shall mean that, observed over a period of one year before the examination, a Member State has had an average nominal long-term interest rate that does not exceed by more than 2 percentage points that of, at most, the three best performing Member States in terms of price stability. Interest rates shall be measured on the basis of long-term government bonds or comparable securities, taking into account differences in national definitions.
Article 5
The statistical data to be used for the application of this Protocol shall be provided by the Commission.
Article 6
The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, the EMI or the ECB as the case may be, and the Committee referred to in Article 114, adopt appropriate provisions to lay down the details of the convergence criteria referred to in Article 121 of this Treaty, which shall then replace this Protocol.
(Source: Pages 295 and 296 in the consolidated version of the treaties.)
***
Abrogating a derogation
The second sentence of Article 122(2) TEC (ex Article 109k) lays out the procedure for abrogating a derogation, i.e. for joining the euro area:
Article 122(2) TEC
-----
2. At least once every two years, or at the request of a Member State with a derogation, the Commission and the ECB shall report to the Council in accordance with the procedure laid down in Article 121(1). After consulting the European Parliament and after discussion in the Council, meeting in the composition of the Heads of State or Government, the Council shall, acting by a qualified majority on a proposal from the Commission, decide which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in Article 121(1), and abrogate the derogations of the Member States concerned.
-----
***
Conversion measures
Article 123(5) TEC (ex Article 109l) indicates the exchange rate and the conversion measures to be settled, when a member state is joining the euro area:
Article 123(5) TEC
-----
5. If it is decided, according to the procedure set out in Article 122(2), to abrogate a derogation, the Council shall, acting with the unanimity of the Member States without a derogation and the Member State concerned, on a proposal from the Commission and after consulting the ECB, adopt the rate at which the ecu shall be substituted for the currency of the Member State concerned, and take the other measures necessary for the introduction of the ecu as the single currency in the Member State concerned.
***
Draft Constitution
The euro currency had been introduced, and the euro banknotes and coins were in circulation, when the European Convention deliberated institutional reform of the European Union. It is hardly surprising that the Convention proposed a reworked section with the aim to simplify and to clarify the transitional provisions.
Section 4 Transitional provisions comprises Articles III-91 to III-96 of the draft Constitution (OJ 18.7.2003 C 169/45─46).
Article III-92 of the draft Constitution proposed a consolidation of the treaty provisions we looked at above:
SECTION 4
Transitional provisions
Article III-92 Draft Constitution
1. At least once every two years, or at the request of a Member State with a derogation, the Commission and the European Central Bank shall report to the Council of Ministers on the progress made by the Member States with a derogation in fulfilling their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between each of these Member States' national legislation, including the statutes of its national central bank, and Articles III-80 and III-81 and the Statute of the European System of Central Banks and the European Central Bank. The reports shall also examine whether a high degree of sustainable convergence has been achieved, by analysing how far each of these Member States has fulfilled the following criteria:
(a) the achievement of a high degree of price stability; this will be apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability;
(b) the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article III-76(6);
(c) the observance of the normal fluctuation margins provided for by the exchange-rate mechanism for at least two years, without devaluing against the euro;
(d) the durability of convergence achieved by the Member State with a derogation and of its participation in the exchangerate mechanism, being reflected in the long-term interest-rate levels.
The four criteria mentioned in this paragraph and the relevant periods over which they are to be respected are developed further in the Protocol on the convergence criteria. The reports of the Commission and the European Central Bank shall also take account of the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.
2. After consulting the European Parliament and after discussion in the European Council, the Council of Ministers, on a proposal from the Commission, shall adopt a European decision establishing which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in paragraph 1, and shall abrogate the derogations of the Member States concerned.
3. If it is decided, according to the procedure set out in paragraph 2, to abrogate a derogation, the Council of Ministers shall, on a proposal from the Commission, with the unanimity of the members representing Member States without a derogation and the Member State concerned, adopt the European regulations or decisions irrevocably fixing the rate at which the euro is to be substituted for the currency of the Member State concerned, and laying down the other measures necessary for the introduction of the euro as the single currency in that Member State. The Council of Ministers shall act after consulting the European Central Bank.
***
Protocol
The European Convention indicated the existence of a Protocol on the convergence criteria, but the Convention did not propose its own version.
***
Finland
The Finnish government reported on the results of the European Convention in Valtioneuvoston selonteko Eduskunnalle konventin tuloksista ja valmistautumisesta hallitusten väliseen konferenssiin (VNS 2/2003 vp). Finland had adopted the euro, so the section on economic and monetary policy (8.5 Talous. ja rahapolitiikka) on pages 65 to 67 did not discuss the convergence criteria or the procedures to abrogate a derogation and to take the conversion measures.
***
Sweden
Ahead of the intergovernmental conference, the Swedish government presented its views in Regeringens skrivelse 2003/04:13 Europeiska konventet om EU:s framtid (2 October 2003). Non-euro Sweden was fairly supportive of effective decision-making in the eurozone and international representation for the euro area in international financial institutions (page 49─50), but on the heels of the negative euro referendum the government had nothing to say about the convergence criteria or euro conversion.
***
de Poncins
Étienne de Poncins presented the text of Article III-92 in Vers une Constitution européenne (Éditions 10/18, 2003), pages 313 and 314, without comment.
***
Constitutional Treaty
The transitional EMU provisions of the intergovernmental conference (IGC 2004) are found in Section 5 Transitional provisions, comprising Articles III-197 to 202 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/86─90).
Article III-198 Constitution
1. At least once every two years, or at the request of a Member State with a derogation, the Commission and the European Central Bank shall report to the Council on the progress made by the Member States with a derogation in fulfilling their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between the national legislation of each of these Member States, including the statutes of its national central bank, and Articles III-188 and III-189 and the Statute of the European System of Central Banks and of the European Central Bank. The reports shall also examine whether a high degree of sustainable convergence has been achieved, by analysing how far each of these Member States has fulfilled the following criteria:
(a) the achievement of a high degree of price stability; this is apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability;
(b) the sustainability of the government financial position; this is apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article III-184(6);
(c) the observance of the normal fluctuation margins provided for by the exchange-rate mechanism of the European monetary system, for at least two years, without devaluing against the euro;
(d) the durability of convergence achieved by the Member State with a derogation and of its participation in the exchange-rate mechanism, being reflected in the long-term interest-rate levels.
The four criteria laid down in this paragraph and the relevant periods over which they are to be respected are developed further in the protocol on the convergence criteria. the reports from the commission and the european central bank shall also take account of the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.
2. After consulting the European Parliament and after discussion in the European Council, the Council, on a proposal from the Commission, shall adopt a European decision establishing which Member States with a derogation fulfil the necessary conditions on the basis of the criteria laid down in paragraph 1, and shall abrogate the derogations of the Member States concerned.
The Council shall act having received a recommendation of a qualified majority of those among its members representing Member States whose currency is the euro. These members shall act within six months of the Council receiving the Commission's proposal.
The qualified majority referred to in the second subparagraph shall be defined as at least 55 % of these members of the Council, representing Member States comprising at least 65 % of the population of the participating Member States. A blocking minority must include at least the minimum number of these 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.
3. If it is decided, in accordance with the procedure set out in paragraph 2, to abrogate a derogation, the Council shall, on a proposal from the Commission, adopt the European regulations or decisions irrevocably fixing the rate at which the euro is to be substituted for the currency of the Member State concerned, and laying down the other measures necessary for the introduction of the euro as the single currency in that Member State. The Council shall act with the unanimous agreement of the members representing Member States whose currency is the euro and the Member State concerned, after consulting the European Central Bank.
***
Protocol
The intergovernmental conference (IGC 2004) adopted a Protocol (No 11) on the convergence criteria (OJ 16.12.2004 C 310/339─340).
***
Let us see it our standard references contribute anything towards our understanding of the provision.
***
Sweden
The government of Sweden, still outside the eurozone, offered a short and bland description of the aims of economic and monetary union (EMU) in the draft ratification bill, Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 June 2005), page 171:
.
”Den ekonomiska och monetära unionen (EMU) är ett samarbete inom EU som syftar till att samordna medlemsländernas ekonomiska politik och att införa en gemensam valuta. EMU har genomförts i tre etapper. Den sista etappen inleddes 1999 och innebär en fullbordad valutaunion med gemensam centralbank (Europeiska centralbanken) samt gemensam valuta och penningpolitik. En förutsättning för valutaunionen har varit och är att de deltagande ländernas ekonomier befinner sig på ungefär samma nivå. Ett antal ekonomiska krav som ett land måste uppfylla för att få delta i valutaunionen har därför ställts upp, de s.k. konvergenskriterierna. För att säkerställa sunda offentliga finanser inom unionen har därför EU inrättat den s.k. stabilitets- och tillväxtpakten.”
In addition, the Swedish government mentioned Article III-198 Constitution in connection with the amended decision-making procedures.
***
Finland
In Finland, the government’s ratification bill, Hallituksen esitys Eduskunnalle Euroopan perustuslaista tehdyn sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta (HE 67/2006 vp), mentioned Article III-198 Constitution on page 185. In addition to the similarities with the current treaty provisions, the Finnish government mentioned the new recommendation from the euro area countries:
”III-198 artikla, joka koskee uusien jäsenvaltioiden hyväksymistä euron käyttäjiksi, vastaa asiallisesti SEY 121 artiklan ensimmäistä kohtaa, SEY 122 artiklan toista kohtaa sekä SEY 123 artiklan neljännen kohdan ensimmäistä lausetta.
Artiklan 2 kohdassa olevia päätöksentekomenettelysäännöksiä on kuitenkin uusittu. Uusitun määräyksen mukaan neuvoston on, ennen kuin se tekee normaalikokoonpanossaan lopullisen päätöksen uuden jäsenvaltion hyväksymisestä euron käyttäjäksi, saatava suositus euron käyttöön ottaneiden jäsenvaltioiden edustajilta. Kyseinen suositus annetaan määräenemmistöllä, joka on määritelty III-179 artiklan yhteydessä.”
***
Original Lisbon Treaty
In Article 2, point 102, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) managed to adopt the substance of the Constitution’s proposal using a drafting technique apt to drive even the most ardent supporter of European integration into deep despair (OJ 17.12.2007 C 306/77─78). This is the wording the EU citizens were offered until the publication of the consolidated versions of the Lisbon Treaty:
102) Article 117 shall be repealed, with the exception of the first five indents of paragraph 2 thereof, which shall become the first five indents of paragraph 2 of Article 118a; they shall be amended as set out in point 103 below. A new Article 117a shall be inserted as follows:
(a) paragraph 1 thereof shall take over the wording of Article 121(1), with the following amendments:
(i) throughout the paragraph, the words ‘the EMI’ shall be replaced by ‘the European Central Bank’;
(ii) at the beginning of the first subparagraph, the following shall be inserted: ‘At least once every two years, or at the request of a Member State with a derogation,’;
(iii) in the first subparagraph, first sentence, the words ‘the progress made in the fulfilment by the Member States of their obligations’ shall be replaced by ‘the progress made by the Member States with a derogation in fulfilling their obligations’;
(iv) in the first subparagraph, second sentence, the words ‘each Member State's national legislation’ shall be replaced by ‘the national legislation of each of these Member States’ and the words ‘of this Treaty’ shall be deleted;
(v) in the third indent of the first subparagraph, the words ‘against the currency of any other Member State’ shall be replaced by ‘against the euro;’;
(vi) in the fourth indent of the first subparagraph, the words ‘the Member State’ shall be replaced by ‘the Member State with a derogation’ and the words ‘of the European Monetary System’ shall be deleted;
(vii) in the second subparagraph, the words ‘the development of the ecu’ shall be deleted;
(b) paragraph 2 thereof shall take over the wording of the second sentence of Article 122(2), with the following amendments:
(i) at the end of the text, the words ‘set out in Article 121(1)’ shall be replaced by ‘set out in paragraph 1’;
(ii) the following new second and third subparagraphs shall be added:
‘The Council shall act having received a recommendation of a qualified majority of those among its members representing Member States whose currency is the euro. These members shall act within six months of the Council receiving the Commission's proposal.
The qualified majority of the said members, as referred to in the second subparagraph, shall be defined in accordance with Article 205(3)(a).’;
(c) paragraph 3 thereof shall take over the wording of Article 123(5), with the following amendments:
(i) at the beginning of the paragraph, the words ‘If it is decided, according to the procedure set out in Article 122(2), to abrogate a derogation,’ shall be replaced by ‘If it is decided, in accordance with the procedure set out in paragraph 2, to abrogate a derogation,’;
(ii) the words ‘adopt the rate’ shall be replaced by ‘irrevocably fix the rate’.
***
Renumbering
The Treaty on the Functioning of the European Union (TFEU) table of equivalences confirms that the new Article 117a TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 140 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII, and in the renumbered Chapter 5 ‘Transitional provisions’ (OJ 17.12.2007 C 306/215).
(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.)
***
Consolidated Lisbon Treaty: TFEU
A readable Article 140 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 115/108─110:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 5 Transitional provisions
Article 140 TFEU
(ex Articles 121(1), 122(2), second sentence, and 123(5) TEC)
1. At least once every two years, or at the request of a Member State with a derogation, the Commission and the European Central Bank shall report to the Council on the progress made by the Member States with a derogation in fulfilling their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between the national legislation of each of these Member States, including the statutes of its national central bank, and Articles 130 and 131 and the Statute of the ESCB and of the ECB. The reports shall also examine the achievement of a high degree of sustainable convergence by reference to the fulfilment by each Member State of the following criteria:
— the achievement of a high degree of price stability; this will be apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability,
— the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article 126(6),
— the observance of the normal fluctuation margins provided for by the exchange-rate mechanism of the European Monetary System, for at least two years, without devaluing against the euro,
— the durability of convergence achieved by the Member State with a derogation and of its participation in the exchange-rate mechanism being reflected in the long-term interest-rate levels.
The four criteria mentioned in this paragraph and the relevant periods over which they are to be respected are developed further in a Protocol annexed to the Treaties. The reports of the Commission and the European Central Bank shall also take account of the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.
2. After consulting the European Parliament and after discussion in the European Council, the Council shall, on a proposal from the Commission, decide which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in paragraph 1, and abrogate the derogations of the Member States concerned.
The Council shall act having received a recommendation of a qualified majority of those among its members representing Member States whose currency is the euro. These members shall act within six months of the Council receiving the Commission's proposal.
The qualified majority of the said members, as referred to in the second subparagraph, shall be defined in accordance with Article 238(3)(a).
3. If it is decided, in accordance with the procedure set out in paragraph 2, to abrogate a derogation, the Council shall, acting with the unanimity of the Member States whose currency is the euro and the Member State concerned, on a proposal from the Commission and after consulting the European Central Bank, irrevocably fix the rate at which the euro shall be substituted for the currency of the Member State concerned, and take the other measures necessary for the introduction of the euro as the single currency in the Member State concerned.
***
Protocol on the convergence criteria
For those who want to read Article 140 TFEU alongside the relevant Protocol on the convergence criteria in an updated form, here is the text from the consolidated version of the Lisbon Treaty (pages 281 and 282):
PROTOCOL (No 13)
ON THE CONVERGENCE CRITERIA
THE HIGH CONTRACTING PARTIES,
DESIRING to lay down the details of the convergence criteria which shall guide the Union in taking decisions to end the derogations of those Member States with a derogation, referred to in Article 140 of the Treaty on the Functioning of the European 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 criterion on price stability referred to in the first indent of Article 140(1) of the Treaty on the Functioning of the European Union shall mean that a Member State has a price performance that is sustainable and an average rate of inflation, observed over a period of one year before the examination, that does not exceed by more than 1 ½ percentage points that of, at most, the three best performing Member States in terms of price stability. Inflation shall be measured by means of the consumer price index on a comparable basis taking into account differences in national definitions.
Article 2
The criterion on the government budgetary position referred to in the second indent of Article 140(1) of the said Treaty shall mean that at the time of the examination the Member State is not the subject of a Council decision under Article 126(6) of the said Treaty that an excessive deficit exists.
Article 3
The criterion on participation in the Exchange Rate mechanism of the European Monetary System referred to in the third indent of Article 140(1) of the said Treaty shall mean that a Member State has respected the normal fluctuation margins provided for by the exchange-rate mechanism on the European Monetary System without severe tensions for at least the last two years before the examination. In particular, the Member State shall not have devalued its currency's bilateral central rate against the euro on its own initiative for the same period.
Article 4
The criterion on the convergence of interest rates referred to in the fourth indent of Article 140(1) of the said Treaty shall mean that, observed over a period of one year before the examination, a Member State has had an average nominal long-term interest rate that does not exceed by more than two percentage points that of, at most, the three best performing Member States in terms of price stability. Interest rates shall be measured on the basis of long-term government bonds or comparable securities, taking into account differences in national definitions.
Article 5
The statistical data to be used for the application of this Protocol shall be provided by the Commission.
Article 6
The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, the ECB as the case may be, and the Economic and Financial Committee, adopt appropriate provisions to lay down the details of the convergence criteria referred to in Article 140(1) of the said Treaty, which shall then replace this Protocol.
***
Sweden
The Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008), on page 185, mentions the Article 117a in the same terms as the government used about the corresponding Article of the Constitutional Treaty, so it does not go into fine detail:
”I ett flertal fall på området ekonomisk och monetär politik ska rådet fatta beslut med kvalificerad majoritet enligt den nya definition av detta begrepp som införs genom Lissabonfördraget (se även avsnitt 14.4). Det rör sig bl.a. om rådsbeslut om rekommendationer till en medlemsstat som för en politik som inte är förenlig med de allmänna riktlinjerna eller har ett alltför stort underskott (artiklarna 99.4 104.6 och 104.7 i EUF-fördraget), rådsbeslut om antagande av landsspecifika riktlinjer (artikel 115a.1b i EUF-fördraget), rådsbeslut om åtgärder för att säkerställa ett enat externt handlande (artikel 115c.2 i EUF-fördraget) och olika rådsbeslut som rör de s.k. medlemsstaterna med undantag (artiklarna 116a.4 och 117a.2 i EUF-fördraget). Särskilda övergångsbestämmelser när det gäller omröstning i rådet enligt artikel 205.3 i EUF-fördraget finns i artikel 3.4 i ett protokoll om övergångsbestämmelser som fogas till EU-fördraget, EUF-fördraget och Euratomfördraget.”
***
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 5 (Dispositions transitoires) on page 260 to 261. Their description of Article 140 TFEU is succinct:
« L’art. 140 TFUE prévoit la procédure d’entrée d’un nouvel État membre dans la zone euro, pour laquelle la capacité décisionnelle des pays dont la monnaie est l’euro est également renforcée (v. commentaire chapitre précédent). »
***
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 140 TFEU (on page 13):
“Draws on Articles 121, 122(2) and 123(5) TEC. Sets out procedure for abrogating a derogation. The provision in paragraph 2 regarding the recommendation of a qualified majority of Member States whose currency is the euro is new.”
***
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. There was a short explanation of Article 117a TFEU (ToL) and the other transitional provisions), on page 64:
“A new Article 117a (Constitution Article III-198) is based on present Articles 121(1), 122(2) and 123(5), but updated to remove references to 1996, 1997 and other dates relating to the introduction of the euro.”
[I have deleted the footnotes, which can be found in the original.]
***
Adopting the euro currency may look more enticing amid the current financial turmoil and the recession, but at the same time the difficulties for the vulnerable member state currencies increase, making it harder to fulfil the convergence criteria.
The Lisbon Treaty does not change much substantially, adding the recommendation by the Eurozone members, but here too the new treaty in its consolidated form would be easier to read and to comprehend than the current one.
Ralf Grahn
Monday, 17 November 2008
EMU: Member States with a derogation
The march towards economic and monetary union (EMU) was planned in stages leading to the single currency, the euro. The main body of the EU member states advanced to form the Eurozone, but the United Kingdom, Denmark and Sweden remained in their winter quarters as euro outsiders.
The 2004 and 2007 EU enlargements brought twelve new members dedicated to joining the euro area. Slovenia, Cyprus and Malta have already joined the coalition headquarters, and Slovakia is going to become a euro insider 1 January 2009. The rest are in various stages of preparation, but they still have their national currencies.
The Treaty of Lisbon would simplify the treaties by abolishing redundant provisions on the march route, and it would clarify the relations between the euro area insiders and the outsiders, known as member states with a derogation.
***
Current treaty
The current Treaty establishing the European Community (TEC) sets out Transitional provisions in Chapter 4 of Title VII Economic and monetary policy, in Part Three Community policies (in the latest codified version of the treaties, Official Journal 29.12.2006 C 321 E/93─101).
Chapter 4 Transitional provisions contains Articles 116 to 124 TEC.
Member states with a derogation and member states without a derogation are defined in Article 122 TEC (ex Article 109k):
Article 122 TEC
1. If the decision has been taken to set the date in accordance with Article 121(3), the Council shall, on the basis of its recommendations referred to in Article 121(2), acting by a qualified majority on a recommendation from the Commission, decide whether any, and if so which, Member States shall have a derogation as defined in paragraph 3 of this Article. Such Member States shall in this Treaty be referred to as ‘Member States with a derogation’.
If the Council has confirmed which Member States fulfil the necessary conditions for the adoption of a single currency, in accordance with Article 121(4), those Member States which do not fulfil the conditions shall have a derogation as defined in paragraph 3 of this Article. Such Member States shall in this Treaty be referred to as ‘Member States with a derogation’.
2. At least once every two years, or at the request of a Member State with a derogation, the Commission and the ECB shall report to the Council in accordance with the procedure laid down in Article 121(1). After consulting the European Parliament and after discussion in the Council, meeting in the composition of the Heads of State or Government, the Council shall, acting by a qualified majority on a proposal from the Commission, decide which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in Article 121(1), and abrogate the derogations of the Member States concerned.
3. A derogation referred to in paragraph 1 shall entail that the following articles do not apply to the Member State concerned: Articles 104(9) and (11), 105(1), (2), (3) and (5), 106, 110, 111, and 112(2)(b). The exclusion of such a Member State and its national central bank from rights and obligations within the ESCB is laid down in Chapter IX of the Statute of the ESCB.
4. In Articles 105(1), (2) and (3), 106, 110, 111 and 112(2)(b), ‘Member States’ shall be read as ‘Member States without a derogation’.
5. The voting rights of Member States with a derogation shall be suspended for the Council decisions referred to in the articles of this Treaty mentioned in paragraph 3. In that case, by way of derogation from Articles 205 and 250(1), a qualified majority shall be defined as two thirds of the votes of the representatives of the Member States without a derogation weighted in accordance with Article 205(2), and unanimity of those Member States shall be required for an act requiring unanimity.
6. Articles 119 and 120 shall continue to apply to a Member State with a derogation.
***
Draft Constitution
The euro currency had been introduced, and the euro banknotes and coins were in circulation, when the European Convention deliberated institutional reform of the European Union. It is hardly surprising that the Convention proposed a reworked section with the aim to simplify and to clarify the transitional provisions.
Section 4 Transitional provisions comprises Articles III-91 to III-96 of the draft Constitution (OJ 18.7.2003 C 169/45─46):
SECTION 4
Transitional provisions
Article III-91 Draft Constitution
1. Member States which the Council of Ministers has decided do not fulfil the necessary conditions for the adoption of the euro shall hereinafter be referred to as ‘Member States with a derogation’.
2. The following provisions of the Constitution shall not apply to Member States with a derogation:
(a) adoption of the parts of the broad economic-policy guidelines which concern the euro area generally (Article III-71(2));
(b) coercive means of remedying excessive deficits (Article III-76(9) and (10));
(c) the objectives and tasks of the European System of Central Banks (Article III-77(1), (2), (3) and (5));
(d) issue of the euro (Article III-78);
(e) acts of the European Central Bank (Article III-82);
(f) measures governing the use of the euro (Article III-83);
(g) monetary agreements and other measures relating to exchange-rate policy (Article III-228);
(h) appointment of members of the Executive Board of the European Central Bank (Article III-84(2)(b)).
In the Articles referred to above, ‘Member States’ shall therefore mean Member States without a derogation.
3. Under Chapter IX of the Statute of the European System of Central Banks and the European Central Bank, Member States with a derogation and their national central banks are excluded from rights and obligations within the European System of Central Banks.
4. The voting rights of members of the Council of Ministers representing Member States with a derogation shall be suspended for the adoption by the Council of Ministers of the measures referred to in the Articles listed in paragraph 2. A qualified majority shall be defined as a majority of the votes of the representatives of the Member States without a derogation, representing at least three fifths of their population. Unanimity of those Member States shall be required for any act requiring unanimity.
***
Finland
The Finnish government reported on the results of the European Convention in Valtioneuvoston selonteko Eduskunnalle konventin tuloksista ja valmistautumisesta hallitusten väliseen konferenssiin (VNS 2/2003 vp), but the section on economic and monetary policy (8.5 Talous. ja rahapolitiikka) on pages 65 to 67 did not waste words on matters as arcane a simplification and clarification.
***
Sweden
Ahead of the intergovernmental conference, the Swedish government presented its views in Regeringens skrivelse 2003/04:13 Europeiska konventet om EU:s framtid (2 October 2003). Non-euro Sweden was fairly supportive of effective decision-making in the eurozone and international representation for the euro area in international financial institutions (page 49─50), but mere simplification and clarification did not merit comments from the government.
***
de Poncins
Étienne de Poncins expressed a few thoughts on the meaning and structure of Article III-91 in Vers une Constitution européenne (Éditions 10/18, 2003), pages 312 and 313:
« Commentaire : cet article précise les cas dans lesquels les États membres de la zone euro prennent part seuls au vote au sein du Conseil mais en présence de l’ensemble des États membres. Comme dans les traités actuels, le fait pour un État membre de ne pas faire partie de la zone euro est considéré comme une « dérogation » par rapport à la règle commune. Cela explique la structure générale de cet article.
Les États membres de la zone euro auraient souhaité que la liste figurant au paragraphe 2 soit étendue s’agissant des alinéas a) et b). La Convention a privilégié l’insertion d’un article III-88 (cf. commentaire sous cet article). Satisfaction leur a toutefois été donnée sur un point : celui relatif à l’adoption des grandes orientations des politiques économiques de la zone eurod’une façon générale (mais non sur celles relative à chaque État membre de la zone euro).
La Conférence intergouvernementale pourrait reprendre le débat. »
***
Constitutional Treaty
The corresponding provisions of the intergovernmental conference (IGC 2004) are found in Section 5 Transitional provisions, comprising Articles III-197 to 202 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/86─90).
Article III-197 Constitution
1. Member States in respect of which the Council has not decided that they fulfil the necessary conditions for the adoption of the euro shall hereinafter be referred to as ‘Member States with a derogation’.
2. The following provisions of the Constitution shall not apply to Member States with a derogation:
(a) adoption of the parts of the broad economic policy guidelines which concern the euro area generally (Article III-179(2));
(b) coercive means of remedying excessive deficits (Article III-184(9) and (10));
(c) the objectives and tasks of the European System of Central Banks (Article III-185(1), (2), (3) and (5));
(d) issue of the euro (Article III-186);
(e) acts of the European Central Bank (Article III-190);
(f) measures governing the use of the euro (Article III-191);
(g) monetary agreements and other measures relating to exchange-rate policy (Article III-326);
(h) appointment of members of the Executive Board of the European Central Bank (Article III-382(2));
(i) European decisions establishing common positions on issues of particular relevance for economic and monetary union within the competent international financial institutions and conferences (Article III-196(1));
(j) measures to ensure unified representation within the international financial institutions and conferences (Article III-196(2)).
In the Articles referred to in points (a) to (j), ‘Member States’ shall therefore mean Member States whose currency is the euro.
3. Under Chapter IX of the Statute of the European System of Central Banks and of the European Central Bank, Member States with a derogation and their national central banks are excluded from rights and obligations within the European System of Central Banks.
4. The voting rights of members of the Council representing Member States with a derogation shall be suspended for the adoption by the Council of the measures referred to in the Articles listed in paragraph 2, and in the following instances:
(a) recommendations made to those Member States whose currency is the euro in the framework of multilateral surveillance, including on stability programmes and warnings (Article III-179(4));
(b) measures relating to excessive deficits concerning those Member States whose currency is the euro (Article III-184(6), (7), (8) and (11)).
A qualified majority shall be defined as at least 55 % of the other members of the Council, representing Member States comprising at least 65 % of the population of the participating Member States.
A blocking minority must include at least the minimum number of these other 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.
***
There are both great similarities and some differences between Article III-91 of the draft Constitution and Article III-197 of the Constitutional Treaty.
Let us see it our standard references contribute anything towards our understanding of the provision.
***
Sweden
The government of Sweden, still outside the eurozone, described the new definition of qualified majority voting concerning a number of provisions, among them Article III-197(4), in the draft ratification bill, Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 June 2005), page 173─174:
”I ett flertal fall på detta område skall rådet fatta beslut med kvalificerad majoritet enligt den nya definition av detta begrepp som det konstitutionella fördraget innehåller. Det rör sig om rådsbeslut om rekommendationer till en medlemsstat som för en politik som inte är förenlig med de allmänna riktlinjerna eller har ett alltför stort underskott (artikel III-179.4, artikel III-184.6 och 7), rådsbeslut om antagande av landsspecifika riktlinjer (artikel III-194.2), rådsbeslut om åtgärder för att säkerställa ett enat externt handlande (artikel III-196.3) och olika rådsbeslut som rör de s.k. medlemsstaterna med undantag (artikel III-197.4 och III-198.2). Enligt de övergångsbestämmelser som finns i artikel 2.4 i protokollet om övergångsbestämmelser för unionens institutioner och organ skall den nya definitionen av kvalificerad majoritet i dessa artiklar dock få verkan först den 1 november 2009.”
***
Finland
In Finland, the government’s ratification bill, Hallituksen esitys Eduskunnalle Euroopan perustuslaista tehdyn sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta (HE 67/2006 vp) did not ponder the differences between the draft Constitution and the Constitutional Treaty, but it compared the Section on transitional provisions and Article III-197 in some detail with the current TEC, on pages 184 and 185.
The Chapter on transitional provisions had been shortened, because some of these provisions concerned competence to take certain measures, such as establishing the European Central Bank. Since these action have already been taken, the provisions have been abolished as redundant. The rest of the provisional provisions apply to countries, which have not adopted the euro, but are preparing for adoption.
Article III-197 of the Constitution corresponds with paragraphs one, two and three of Article 122 TEC.
In Constitution Article III-197(2), the non-application of Articles III-179(2), III-191 and III-196(1) to members with a derogation has been added.
Further additions of non-application are mentioned in paragraph 4. The new definition of a qualified majority has been explained in the context of Article III-179:
”5 jakso
Siirtymämääräykset
Siirtymämääräyksiä koskevaa lukua on lyhennetty aiempaan perustamissopimukseen verrattuna. Tämä johtuu siitä, että osa perustamissopimukseen sisällytetyistä siirtymämääräyksistä koski toimivaltamääräyksiä ryhtyä tiettyihin toimenpiteisiin, kuten esimerkiksi Euroopan keskuspankin perustamiseen. Koska kyseiset toimenpiteet on jo suoritettu, vastaavat toimivaltamääräykset on poistettu tarpeettomina. Kaikki jäljellä olevat siirtymäsäännökset koskevat sellaisia maita, jotka eivät ole vielä ottaneet euroa käyttöön, mutta ovat kuitenkin valmistautumassa siihen.
III-197 artikla, jossa määrätään, mitä artikloita ei sovelleta niihin jäsenvaltioihin, jotka eivät ole täyttäneet euron käyttöön ottamiseksi vaadittavia edellytyksiä, vastaa SEY 122 artiklan ensimmäistä, kolmatta ja viidettä kohtaa.
Artiklan 2 kohdan mukaan aiempien rajausten lisäksi kyseisiin jäsenvaltioihin ei sovelleta myöskään III-179 artiklan toista kohtaa, III-191 artiklaa eikä III-196 artiklan ensimmäistä kohtaa.
Artiklan 4 kohdassa on äänestysmääräykset muutettu siten ettei kyseisillä jäsenvaltioilla ole äänioikeutta III-179 artiklan 4 kohdan eikä III-184 artiklan 6,7,8 ja 11 kohdissa tarkoitetussa päätöksenteossa. Päätöksenteossa sovelletaan uutta määräenemmistön määritelmää, joka on selostettu III-179 artiklan yhteydessä.”
***
Original Lisbon Treaty
In Article 2, point 101, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) adopted the substance of the Constitution’s proposal under a clarifying headline relating to member states with a derogation (OJ 17.12.2007 C 306/76─77):
TRANSITIONAL PROVISIONS RELATING TO MEMBER STATES WITH A DEROGATION
101) Article 116 shall be repealed, and the following Article 116a shall be inserted:
‘Article 116a TFEU (ToL)
1. Member States in respect of which the Council has not decided that they fulfil the necessary conditions for the adoption of the euro shall hereinafter be referred to as “Member States with a derogation”.
2. The following provisions of the Treaties shall not apply to Member States with a derogation:
(a) adoption of the parts of the broad economic policy guidelines which concern the euro area generally (Article 99(2));
(b) coercive means of remedying excessive deficits (Article 104(9) and (11));
(c) the objectives and tasks of the ESCB (Article 105(1), (2), (3) and (5));
(d) issue of the euro (Article 106);
(e) acts of the European Central Bank (Article 110);
(f) measures governing the use of the euro (Article 111a);
(g) monetary agreements and other measures relating to exchange-rate policy (Article 188 O);
(h) appointment of members of the Executive Board of the European Central Bank (Article 245b(2));
(i) decisions establishing common positions on issues of particular relevance for economic and monetary union within the competent international financial institutions and conferences (Article 115 C(1));
(j) measures to ensure unified representation within the international financial institutions and conferences (Article 115 C(2)).
In the Articles referred to in points (a) to (j), “Member States” shall therefore mean Member States whose currency is the euro.
3. Under Chapter IX of the Statute of the ESCB and of the ECB, Member States with a derogation and their national central banks are excluded from rights and obligations within the SCB.
4. The voting rights of members of the Council representing Member States with a derogation shall be suspended for the adoption by the Council of the measures referred to in the Articles listed in paragraph 2, and in the following instances:
(a) recommendations made to those Member States whose currency is the euro in the framework of multilateral surveillance, including on stability programmes and warnings (Article 99(4));
(b) measures relating to excessive deficits concerning those Member States whose currency is the euro (Article 104(6), (7), (8), (12) and (13)).
A qualified majority of the other members of the Council shall be defined in accordance with
Article 205(3)(a).’.
***
Renumbering
The Treaty on the Functioning of the European Union (TFEU) table of equivalences confirms that the new Article 116a TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 139 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII, and in the renumbered Chapter 5 ‘Transitional provisions’ (OJ 17.12.2007 C 306/215).
(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.)
***
Consolidated Lisbon Treaty: TFEU
Article 139 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 115/107─108:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
CHAPTER 5
TRANSITIONAL PROVISIONS
Article 139 TFEU
1. Member States in respect of which the Council has not decided that they fulfil the necessary conditions for the adoption of the euro shall hereinafter be referred to as ‘Member States with a derogation’.
2. The following provisions of the Treaties shall not apply to Member States with a derogation:
(a) adoption of the parts of the broad economic policy guidelines which concern the euro area generally (Article 121(2));
(b) coercive means of remedying excessive deficits (Article 126(9) and (11));
(c) the objectives and tasks of the ESCB (Article 127(1) to (3) and (5));
(d) issue of the euro (Article 128);
(e) acts of the European Central Bank (Article 132);
(f) measures governing the use of the euro (Article 133);
(g) monetary agreements and other measures relating to exchange-rate policy (Article 219);
(h) appointment of members of the Executive Board of the European Central Bank (Article 283(2));
(i) decisions establishing common positions on issues of particular relevance for economic and monetary union within the competent international financial institutions and conferences (Article 138(1));
(j) measures to ensure unified representation within the international financial institutions and conferences (Article 138(2)).
In the Articles referred to in points (a) to (j), ‘Member States’ shall therefore mean Member States whose currency is the euro.
3. Under Chapter IX of the Statute of the ESCB and of the ECB, Member States with a derogation and their national central banks are excluded from rights and obligations within the ESCB.
4. The voting rights of members of the Council representing Member States with a derogation shall be suspended for the adoption by the Council of the measures referred to in the Articles listed in paragraph 2, and in the following instances:
(a) recommendations made to those Member States whose currency is the euro in the framework of multilateral surveillance, including on stability programmes and warnings (Article 121(4));
(b) measures relating to excessive deficits concerning those Member States whose currency is the euro (Article 126(6), (7), (8), (12) and (13)).
A qualified majority of the other members of the Council shall be defined in accordance with Article 238(3)(a).
***
Sweden
The Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008), on page 185, mentions the Article 116a in the same terms as the corresponding Article of the Constitutional Treaty, so it does not go into fine detail:
”I ett flertal fall på området ekonomisk och monetär politik ska rådet fatta beslut med kvalificerad majoritet enligt den nya definition av detta begrepp som införs genom Lissabonfördraget (se även avsnitt 14.4). Det rör sig bl.a. om rådsbeslut om rekommendationer till en medlemsstat som för en politik som inte är förenlig med de allmänna riktlinjerna eller har ett alltför stort underskott (artiklarna 99.4 104.6 och 104.7 i EUF-fördraget), rådsbeslut om antagande av landsspecifika riktlinjer (artikel 115a.1b i EUF-fördraget), rådsbeslut om åtgärder för att säkerställa ett enat externt handlande (artikel 115c.2 i EUF-fördraget) och olika rådsbeslut som rör de s.k. medlemsstaterna med undantag (artiklarna 116a.4 och 117a.2 i EUF-fördraget). Särskilda övergångsbestämmelser när det gäller omröstning i rådet enligt artikel 205.3 i EUF-fördraget finns i artikel 3.4 i ett protokoll om övergångsbestämmelser som fogas till EU-fördraget, EUF-fördraget och Euratomfördraget.”
***
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 5 (Dispositions transitoires) on page 260 to 261. Their first paragraph manages to present the essence in three sentences:
« Ces dispositions transitoires sont celles applicables aux États membres bénéficiant d’une dérogation, c’est’à-dire des pays dont l’euro n’est pas encore la monnaie. Elle reprend les art. 116 à 124 TCE, en les simplifiant. Toutes les dispositions relative aux première et deuxième phases, devenues obsolètes, ont été supprimées. »
***
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 139 TFEU (on page 13):
“Draws on Article 122 TEC. Sets out position of “Member States with a derogation”.”
***
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. There was a lengthy explanation of Article 116a TFEU (ToL) and the other transitional provisions), on page 63 and 64:
“Article 116a sets out the arrangements for Member States “with a derogation”. While the article has appears to have changed substantially from the original article, the content for the most part is the same and has been re-arranged or re-worded. The article sets out areas of the Treaty which do not apply to Member States with a derogation, including the following areas which are unchanged from the existing treaty:
· Adoption of broad economic policy guidelines concerning the euro area;
· Coercive means of remedying excessive deficits;
· The objectives and tasks of the European System of Central Banks;
· The issue of the euro and measures governing the use of the euro;
· Acts of the European Central Bank (ECB) and appointments to the Executive Board of the ECB;
· Monetary agreements and other measures relating to exchange rate policy; and,
· Exclusion from rights and obligations relating to the European System of Central Banks.
Two additional areas are covered by the Treaty in this article which are not in previous treaties: decisions establishing common positions relevant to EMU within international financial institutions and conferences and measures to ensure unified representation within international financial institutions and conferences (See Article 115A). Neither of these areas applies to Member States with a derogation.
A new provision is that the voting rights of Member States with a derogation are suspended in two areas:
· Recommendations to Member States within the euro area on the framework of multilateral surveillance, including stability programmes and warnings; and,
· All measures relating to excessive deficits for Member States whose currency is the euro.
Articles 116a–120 (Constitution Articles Article III-197 - 202) concern transitional provisions regarding the single currency. Article 116a (Constitution Article III-197) sets out the arrangements for Member States “with a derogation”. This has changed substantially in format but the content has been for the most part simply re-arranged. Article 116a and Article 99(2), which cover the adoption of broad economic guidelines in the euro area, does not apply to Member States with a derogation. Article 116a(4) has been altered to include two further areas where Member States with a derogation cannot vote:
· recommendations made to those Member States whose currency is the euro in the framework of multilateral surveillance, including on stability programmes and warnings
· measures relating to excessive deficits concerning those Member States whose currency is the euro.
While the IGC did not agree on a new Stability and Growth Pact, a Conference Declaration regarding the Pact was annexed to the Treaty (“Declaration on Article 104 of the Treaty on the Functioning of the European Union”), in which the Conference confirms that the Pact is an “important tool” in the Union’s economic and fiscal policy and “reaffirms its commitment to the provisions concerning the Stability and Growth Pact as the framework for the coordination of budgetary policies in the Member States”.”
[I have deleted the footnotes, which can be found in the original.]
***
The willing and able EU member states have the rights and obligations of the Eurozone, whereas the outsiders are excluded from the enumerated decisions concerning the euro area and the European system of Central Banks (ESCB).
The financial turbulence and the economic downturn seem to have lessened the attraction of being an outsider, but to adopt the euro a member state has to qualify.
Ralf Grahn
The 2004 and 2007 EU enlargements brought twelve new members dedicated to joining the euro area. Slovenia, Cyprus and Malta have already joined the coalition headquarters, and Slovakia is going to become a euro insider 1 January 2009. The rest are in various stages of preparation, but they still have their national currencies.
The Treaty of Lisbon would simplify the treaties by abolishing redundant provisions on the march route, and it would clarify the relations between the euro area insiders and the outsiders, known as member states with a derogation.
***
Current treaty
The current Treaty establishing the European Community (TEC) sets out Transitional provisions in Chapter 4 of Title VII Economic and monetary policy, in Part Three Community policies (in the latest codified version of the treaties, Official Journal 29.12.2006 C 321 E/93─101).
Chapter 4 Transitional provisions contains Articles 116 to 124 TEC.
Member states with a derogation and member states without a derogation are defined in Article 122 TEC (ex Article 109k):
Article 122 TEC
1. If the decision has been taken to set the date in accordance with Article 121(3), the Council shall, on the basis of its recommendations referred to in Article 121(2), acting by a qualified majority on a recommendation from the Commission, decide whether any, and if so which, Member States shall have a derogation as defined in paragraph 3 of this Article. Such Member States shall in this Treaty be referred to as ‘Member States with a derogation’.
If the Council has confirmed which Member States fulfil the necessary conditions for the adoption of a single currency, in accordance with Article 121(4), those Member States which do not fulfil the conditions shall have a derogation as defined in paragraph 3 of this Article. Such Member States shall in this Treaty be referred to as ‘Member States with a derogation’.
2. At least once every two years, or at the request of a Member State with a derogation, the Commission and the ECB shall report to the Council in accordance with the procedure laid down in Article 121(1). After consulting the European Parliament and after discussion in the Council, meeting in the composition of the Heads of State or Government, the Council shall, acting by a qualified majority on a proposal from the Commission, decide which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in Article 121(1), and abrogate the derogations of the Member States concerned.
3. A derogation referred to in paragraph 1 shall entail that the following articles do not apply to the Member State concerned: Articles 104(9) and (11), 105(1), (2), (3) and (5), 106, 110, 111, and 112(2)(b). The exclusion of such a Member State and its national central bank from rights and obligations within the ESCB is laid down in Chapter IX of the Statute of the ESCB.
4. In Articles 105(1), (2) and (3), 106, 110, 111 and 112(2)(b), ‘Member States’ shall be read as ‘Member States without a derogation’.
5. The voting rights of Member States with a derogation shall be suspended for the Council decisions referred to in the articles of this Treaty mentioned in paragraph 3. In that case, by way of derogation from Articles 205 and 250(1), a qualified majority shall be defined as two thirds of the votes of the representatives of the Member States without a derogation weighted in accordance with Article 205(2), and unanimity of those Member States shall be required for an act requiring unanimity.
6. Articles 119 and 120 shall continue to apply to a Member State with a derogation.
***
Draft Constitution
The euro currency had been introduced, and the euro banknotes and coins were in circulation, when the European Convention deliberated institutional reform of the European Union. It is hardly surprising that the Convention proposed a reworked section with the aim to simplify and to clarify the transitional provisions.
Section 4 Transitional provisions comprises Articles III-91 to III-96 of the draft Constitution (OJ 18.7.2003 C 169/45─46):
SECTION 4
Transitional provisions
Article III-91 Draft Constitution
1. Member States which the Council of Ministers has decided do not fulfil the necessary conditions for the adoption of the euro shall hereinafter be referred to as ‘Member States with a derogation’.
2. The following provisions of the Constitution shall not apply to Member States with a derogation:
(a) adoption of the parts of the broad economic-policy guidelines which concern the euro area generally (Article III-71(2));
(b) coercive means of remedying excessive deficits (Article III-76(9) and (10));
(c) the objectives and tasks of the European System of Central Banks (Article III-77(1), (2), (3) and (5));
(d) issue of the euro (Article III-78);
(e) acts of the European Central Bank (Article III-82);
(f) measures governing the use of the euro (Article III-83);
(g) monetary agreements and other measures relating to exchange-rate policy (Article III-228);
(h) appointment of members of the Executive Board of the European Central Bank (Article III-84(2)(b)).
In the Articles referred to above, ‘Member States’ shall therefore mean Member States without a derogation.
3. Under Chapter IX of the Statute of the European System of Central Banks and the European Central Bank, Member States with a derogation and their national central banks are excluded from rights and obligations within the European System of Central Banks.
4. The voting rights of members of the Council of Ministers representing Member States with a derogation shall be suspended for the adoption by the Council of Ministers of the measures referred to in the Articles listed in paragraph 2. A qualified majority shall be defined as a majority of the votes of the representatives of the Member States without a derogation, representing at least three fifths of their population. Unanimity of those Member States shall be required for any act requiring unanimity.
***
Finland
The Finnish government reported on the results of the European Convention in Valtioneuvoston selonteko Eduskunnalle konventin tuloksista ja valmistautumisesta hallitusten väliseen konferenssiin (VNS 2/2003 vp), but the section on economic and monetary policy (8.5 Talous. ja rahapolitiikka) on pages 65 to 67 did not waste words on matters as arcane a simplification and clarification.
***
Sweden
Ahead of the intergovernmental conference, the Swedish government presented its views in Regeringens skrivelse 2003/04:13 Europeiska konventet om EU:s framtid (2 October 2003). Non-euro Sweden was fairly supportive of effective decision-making in the eurozone and international representation for the euro area in international financial institutions (page 49─50), but mere simplification and clarification did not merit comments from the government.
***
de Poncins
Étienne de Poncins expressed a few thoughts on the meaning and structure of Article III-91 in Vers une Constitution européenne (Éditions 10/18, 2003), pages 312 and 313:
« Commentaire : cet article précise les cas dans lesquels les États membres de la zone euro prennent part seuls au vote au sein du Conseil mais en présence de l’ensemble des États membres. Comme dans les traités actuels, le fait pour un État membre de ne pas faire partie de la zone euro est considéré comme une « dérogation » par rapport à la règle commune. Cela explique la structure générale de cet article.
Les États membres de la zone euro auraient souhaité que la liste figurant au paragraphe 2 soit étendue s’agissant des alinéas a) et b). La Convention a privilégié l’insertion d’un article III-88 (cf. commentaire sous cet article). Satisfaction leur a toutefois été donnée sur un point : celui relatif à l’adoption des grandes orientations des politiques économiques de la zone eurod’une façon générale (mais non sur celles relative à chaque État membre de la zone euro).
La Conférence intergouvernementale pourrait reprendre le débat. »
***
Constitutional Treaty
The corresponding provisions of the intergovernmental conference (IGC 2004) are found in Section 5 Transitional provisions, comprising Articles III-197 to 202 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/86─90).
Article III-197 Constitution
1. Member States in respect of which the Council has not decided that they fulfil the necessary conditions for the adoption of the euro shall hereinafter be referred to as ‘Member States with a derogation’.
2. The following provisions of the Constitution shall not apply to Member States with a derogation:
(a) adoption of the parts of the broad economic policy guidelines which concern the euro area generally (Article III-179(2));
(b) coercive means of remedying excessive deficits (Article III-184(9) and (10));
(c) the objectives and tasks of the European System of Central Banks (Article III-185(1), (2), (3) and (5));
(d) issue of the euro (Article III-186);
(e) acts of the European Central Bank (Article III-190);
(f) measures governing the use of the euro (Article III-191);
(g) monetary agreements and other measures relating to exchange-rate policy (Article III-326);
(h) appointment of members of the Executive Board of the European Central Bank (Article III-382(2));
(i) European decisions establishing common positions on issues of particular relevance for economic and monetary union within the competent international financial institutions and conferences (Article III-196(1));
(j) measures to ensure unified representation within the international financial institutions and conferences (Article III-196(2)).
In the Articles referred to in points (a) to (j), ‘Member States’ shall therefore mean Member States whose currency is the euro.
3. Under Chapter IX of the Statute of the European System of Central Banks and of the European Central Bank, Member States with a derogation and their national central banks are excluded from rights and obligations within the European System of Central Banks.
4. The voting rights of members of the Council representing Member States with a derogation shall be suspended for the adoption by the Council of the measures referred to in the Articles listed in paragraph 2, and in the following instances:
(a) recommendations made to those Member States whose currency is the euro in the framework of multilateral surveillance, including on stability programmes and warnings (Article III-179(4));
(b) measures relating to excessive deficits concerning those Member States whose currency is the euro (Article III-184(6), (7), (8) and (11)).
A qualified majority shall be defined as at least 55 % of the other members of the Council, representing Member States comprising at least 65 % of the population of the participating Member States.
A blocking minority must include at least the minimum number of these other 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.
***
There are both great similarities and some differences between Article III-91 of the draft Constitution and Article III-197 of the Constitutional Treaty.
Let us see it our standard references contribute anything towards our understanding of the provision.
***
Sweden
The government of Sweden, still outside the eurozone, described the new definition of qualified majority voting concerning a number of provisions, among them Article III-197(4), in the draft ratification bill, Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 June 2005), page 173─174:
”I ett flertal fall på detta område skall rådet fatta beslut med kvalificerad majoritet enligt den nya definition av detta begrepp som det konstitutionella fördraget innehåller. Det rör sig om rådsbeslut om rekommendationer till en medlemsstat som för en politik som inte är förenlig med de allmänna riktlinjerna eller har ett alltför stort underskott (artikel III-179.4, artikel III-184.6 och 7), rådsbeslut om antagande av landsspecifika riktlinjer (artikel III-194.2), rådsbeslut om åtgärder för att säkerställa ett enat externt handlande (artikel III-196.3) och olika rådsbeslut som rör de s.k. medlemsstaterna med undantag (artikel III-197.4 och III-198.2). Enligt de övergångsbestämmelser som finns i artikel 2.4 i protokollet om övergångsbestämmelser för unionens institutioner och organ skall den nya definitionen av kvalificerad majoritet i dessa artiklar dock få verkan först den 1 november 2009.”
***
Finland
In Finland, the government’s ratification bill, Hallituksen esitys Eduskunnalle Euroopan perustuslaista tehdyn sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta (HE 67/2006 vp) did not ponder the differences between the draft Constitution and the Constitutional Treaty, but it compared the Section on transitional provisions and Article III-197 in some detail with the current TEC, on pages 184 and 185.
The Chapter on transitional provisions had been shortened, because some of these provisions concerned competence to take certain measures, such as establishing the European Central Bank. Since these action have already been taken, the provisions have been abolished as redundant. The rest of the provisional provisions apply to countries, which have not adopted the euro, but are preparing for adoption.
Article III-197 of the Constitution corresponds with paragraphs one, two and three of Article 122 TEC.
In Constitution Article III-197(2), the non-application of Articles III-179(2), III-191 and III-196(1) to members with a derogation has been added.
Further additions of non-application are mentioned in paragraph 4. The new definition of a qualified majority has been explained in the context of Article III-179:
”5 jakso
Siirtymämääräykset
Siirtymämääräyksiä koskevaa lukua on lyhennetty aiempaan perustamissopimukseen verrattuna. Tämä johtuu siitä, että osa perustamissopimukseen sisällytetyistä siirtymämääräyksistä koski toimivaltamääräyksiä ryhtyä tiettyihin toimenpiteisiin, kuten esimerkiksi Euroopan keskuspankin perustamiseen. Koska kyseiset toimenpiteet on jo suoritettu, vastaavat toimivaltamääräykset on poistettu tarpeettomina. Kaikki jäljellä olevat siirtymäsäännökset koskevat sellaisia maita, jotka eivät ole vielä ottaneet euroa käyttöön, mutta ovat kuitenkin valmistautumassa siihen.
III-197 artikla, jossa määrätään, mitä artikloita ei sovelleta niihin jäsenvaltioihin, jotka eivät ole täyttäneet euron käyttöön ottamiseksi vaadittavia edellytyksiä, vastaa SEY 122 artiklan ensimmäistä, kolmatta ja viidettä kohtaa.
Artiklan 2 kohdan mukaan aiempien rajausten lisäksi kyseisiin jäsenvaltioihin ei sovelleta myöskään III-179 artiklan toista kohtaa, III-191 artiklaa eikä III-196 artiklan ensimmäistä kohtaa.
Artiklan 4 kohdassa on äänestysmääräykset muutettu siten ettei kyseisillä jäsenvaltioilla ole äänioikeutta III-179 artiklan 4 kohdan eikä III-184 artiklan 6,7,8 ja 11 kohdissa tarkoitetussa päätöksenteossa. Päätöksenteossa sovelletaan uutta määräenemmistön määritelmää, joka on selostettu III-179 artiklan yhteydessä.”
***
Original Lisbon Treaty
In Article 2, point 101, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) adopted the substance of the Constitution’s proposal under a clarifying headline relating to member states with a derogation (OJ 17.12.2007 C 306/76─77):
TRANSITIONAL PROVISIONS RELATING TO MEMBER STATES WITH A DEROGATION
101) Article 116 shall be repealed, and the following Article 116a shall be inserted:
‘Article 116a TFEU (ToL)
1. Member States in respect of which the Council has not decided that they fulfil the necessary conditions for the adoption of the euro shall hereinafter be referred to as “Member States with a derogation”.
2. The following provisions of the Treaties shall not apply to Member States with a derogation:
(a) adoption of the parts of the broad economic policy guidelines which concern the euro area generally (Article 99(2));
(b) coercive means of remedying excessive deficits (Article 104(9) and (11));
(c) the objectives and tasks of the ESCB (Article 105(1), (2), (3) and (5));
(d) issue of the euro (Article 106);
(e) acts of the European Central Bank (Article 110);
(f) measures governing the use of the euro (Article 111a);
(g) monetary agreements and other measures relating to exchange-rate policy (Article 188 O);
(h) appointment of members of the Executive Board of the European Central Bank (Article 245b(2));
(i) decisions establishing common positions on issues of particular relevance for economic and monetary union within the competent international financial institutions and conferences (Article 115 C(1));
(j) measures to ensure unified representation within the international financial institutions and conferences (Article 115 C(2)).
In the Articles referred to in points (a) to (j), “Member States” shall therefore mean Member States whose currency is the euro.
3. Under Chapter IX of the Statute of the ESCB and of the ECB, Member States with a derogation and their national central banks are excluded from rights and obligations within the SCB.
4. The voting rights of members of the Council representing Member States with a derogation shall be suspended for the adoption by the Council of the measures referred to in the Articles listed in paragraph 2, and in the following instances:
(a) recommendations made to those Member States whose currency is the euro in the framework of multilateral surveillance, including on stability programmes and warnings (Article 99(4));
(b) measures relating to excessive deficits concerning those Member States whose currency is the euro (Article 104(6), (7), (8), (12) and (13)).
A qualified majority of the other members of the Council shall be defined in accordance with
Article 205(3)(a).’.
***
Renumbering
The Treaty on the Functioning of the European Union (TFEU) table of equivalences confirms that the new Article 116a TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 139 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII, and in the renumbered Chapter 5 ‘Transitional provisions’ (OJ 17.12.2007 C 306/215).
(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.)
***
Consolidated Lisbon Treaty: TFEU
Article 139 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 115/107─108:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
CHAPTER 5
TRANSITIONAL PROVISIONS
Article 139 TFEU
1. Member States in respect of which the Council has not decided that they fulfil the necessary conditions for the adoption of the euro shall hereinafter be referred to as ‘Member States with a derogation’.
2. The following provisions of the Treaties shall not apply to Member States with a derogation:
(a) adoption of the parts of the broad economic policy guidelines which concern the euro area generally (Article 121(2));
(b) coercive means of remedying excessive deficits (Article 126(9) and (11));
(c) the objectives and tasks of the ESCB (Article 127(1) to (3) and (5));
(d) issue of the euro (Article 128);
(e) acts of the European Central Bank (Article 132);
(f) measures governing the use of the euro (Article 133);
(g) monetary agreements and other measures relating to exchange-rate policy (Article 219);
(h) appointment of members of the Executive Board of the European Central Bank (Article 283(2));
(i) decisions establishing common positions on issues of particular relevance for economic and monetary union within the competent international financial institutions and conferences (Article 138(1));
(j) measures to ensure unified representation within the international financial institutions and conferences (Article 138(2)).
In the Articles referred to in points (a) to (j), ‘Member States’ shall therefore mean Member States whose currency is the euro.
3. Under Chapter IX of the Statute of the ESCB and of the ECB, Member States with a derogation and their national central banks are excluded from rights and obligations within the ESCB.
4. The voting rights of members of the Council representing Member States with a derogation shall be suspended for the adoption by the Council of the measures referred to in the Articles listed in paragraph 2, and in the following instances:
(a) recommendations made to those Member States whose currency is the euro in the framework of multilateral surveillance, including on stability programmes and warnings (Article 121(4));
(b) measures relating to excessive deficits concerning those Member States whose currency is the euro (Article 126(6), (7), (8), (12) and (13)).
A qualified majority of the other members of the Council shall be defined in accordance with Article 238(3)(a).
***
Sweden
The Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008), on page 185, mentions the Article 116a in the same terms as the corresponding Article of the Constitutional Treaty, so it does not go into fine detail:
”I ett flertal fall på området ekonomisk och monetär politik ska rådet fatta beslut med kvalificerad majoritet enligt den nya definition av detta begrepp som införs genom Lissabonfördraget (se även avsnitt 14.4). Det rör sig bl.a. om rådsbeslut om rekommendationer till en medlemsstat som för en politik som inte är förenlig med de allmänna riktlinjerna eller har ett alltför stort underskott (artiklarna 99.4 104.6 och 104.7 i EUF-fördraget), rådsbeslut om antagande av landsspecifika riktlinjer (artikel 115a.1b i EUF-fördraget), rådsbeslut om åtgärder för att säkerställa ett enat externt handlande (artikel 115c.2 i EUF-fördraget) och olika rådsbeslut som rör de s.k. medlemsstaterna med undantag (artiklarna 116a.4 och 117a.2 i EUF-fördraget). Särskilda övergångsbestämmelser när det gäller omröstning i rådet enligt artikel 205.3 i EUF-fördraget finns i artikel 3.4 i ett protokoll om övergångsbestämmelser som fogas till EU-fördraget, EUF-fördraget och Euratomfördraget.”
***
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 5 (Dispositions transitoires) on page 260 to 261. Their first paragraph manages to present the essence in three sentences:
« Ces dispositions transitoires sont celles applicables aux États membres bénéficiant d’une dérogation, c’est’à-dire des pays dont l’euro n’est pas encore la monnaie. Elle reprend les art. 116 à 124 TCE, en les simplifiant. Toutes les dispositions relative aux première et deuxième phases, devenues obsolètes, ont été supprimées. »
***
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 139 TFEU (on page 13):
“Draws on Article 122 TEC. Sets out position of “Member States with a derogation”.”
***
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. There was a lengthy explanation of Article 116a TFEU (ToL) and the other transitional provisions), on page 63 and 64:
“Article 116a sets out the arrangements for Member States “with a derogation”. While the article has appears to have changed substantially from the original article, the content for the most part is the same and has been re-arranged or re-worded. The article sets out areas of the Treaty which do not apply to Member States with a derogation, including the following areas which are unchanged from the existing treaty:
· Adoption of broad economic policy guidelines concerning the euro area;
· Coercive means of remedying excessive deficits;
· The objectives and tasks of the European System of Central Banks;
· The issue of the euro and measures governing the use of the euro;
· Acts of the European Central Bank (ECB) and appointments to the Executive Board of the ECB;
· Monetary agreements and other measures relating to exchange rate policy; and,
· Exclusion from rights and obligations relating to the European System of Central Banks.
Two additional areas are covered by the Treaty in this article which are not in previous treaties: decisions establishing common positions relevant to EMU within international financial institutions and conferences and measures to ensure unified representation within international financial institutions and conferences (See Article 115A). Neither of these areas applies to Member States with a derogation.
A new provision is that the voting rights of Member States with a derogation are suspended in two areas:
· Recommendations to Member States within the euro area on the framework of multilateral surveillance, including stability programmes and warnings; and,
· All measures relating to excessive deficits for Member States whose currency is the euro.
Articles 116a–120 (Constitution Articles Article III-197 - 202) concern transitional provisions regarding the single currency. Article 116a (Constitution Article III-197) sets out the arrangements for Member States “with a derogation”. This has changed substantially in format but the content has been for the most part simply re-arranged. Article 116a and Article 99(2), which cover the adoption of broad economic guidelines in the euro area, does not apply to Member States with a derogation. Article 116a(4) has been altered to include two further areas where Member States with a derogation cannot vote:
· recommendations made to those Member States whose currency is the euro in the framework of multilateral surveillance, including on stability programmes and warnings
· measures relating to excessive deficits concerning those Member States whose currency is the euro.
While the IGC did not agree on a new Stability and Growth Pact, a Conference Declaration regarding the Pact was annexed to the Treaty (“Declaration on Article 104 of the Treaty on the Functioning of the European Union”), in which the Conference confirms that the Pact is an “important tool” in the Union’s economic and fiscal policy and “reaffirms its commitment to the provisions concerning the Stability and Growth Pact as the framework for the coordination of budgetary policies in the Member States”.”
[I have deleted the footnotes, which can be found in the original.]
***
The willing and able EU member states have the rights and obligations of the Eurozone, whereas the outsiders are excluded from the enumerated decisions concerning the euro area and the European system of Central Banks (ESCB).
The financial turbulence and the economic downturn seem to have lessened the attraction of being an outsider, but to adopt the euro a member state has to qualify.
Ralf Grahn
Friday, 14 November 2008
EU Public Procurement Directive contents overview
The EU Public Procurement Directive 2004/18/EC is long and complex enough to merit a Table of Contents, which offers an overview of the matter and it makes it easier to find the relevant provisions.
The Procurement Directive entered into force on publication in the Official Journal of the European Union, and the member states had the obligation to transpose the Directive into national law on 31 January 2006, at the latest.
***
Directives
Article 249 of the Treaty establishing the European Community (TEC) describes the legal act called Directive:
-----
A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.
-----
***
The Procurement Directive or Classic Directive contains both mandatory uniform rules, which the member states have to put into effect, and optional rules, but the ‘forms and methods’ are different in the various member states.
This means that there are differences between the national legislations, within the limits of the Directive and ECJ jurisprudence.
***
Here is the Table of Contents of the EU Procurement Directive 2004/18/EC:
TABLE OF CONTENTS
TITLE I
Definitions and general principles
Article 1 — Definitions
Article 2 — Principles of awarding contracts
Article 3 — Granting of special or exclusive rights: nondiscrimination clause
TITLE II
Rules on public contracts
CHAPTER I
General provisions
Article 4 — Economic operators
Article 5 — Conditions relating to agreements concluded
within the World Trade Organisation
Article 6 — Confidentiality
CHAPTER I I
Scope
S e c t i o n 1 — T h r e s h o l d s
Article 7 — Threshold amounts for public contracts
Article 8 — Contracts subsidised by more than 50 % by contracting authorities
Article 9 — Methods for calculating the estimated value of public contracts, framework agreements and dynamic purchasing systems
S e c t i o n 2 — S p e c i f i c s i t u a t i o n s
Article 10 — Defence procurement
Article 11 — Public contracts and framework agreements awarded by central purchasing bodies
S e c t i o n 3 — E x c l u d e d c o n t r a c t s
Article 12 — Contracts in the water, energy, transport and postal services sectors
Article 13 — Specific exclusions in the field of telecommunications
Article 14 — Secret contracts and contracts requiring special security measures
Article 15 — Contracts awarded pursuant to international rules
Article 16 — Specific exclusions
Article 17 — Service concessions
Article 18 — Service contracts awarded on the basis of an exclusive right
S e c t i o n 4 — S p e c i a l a r r a n g eme n t
Article 19 — Reserved contracts
CHAPTER I I I
Arrangements for public service contracts
Article 20 — Service contracts listed in Annex II A
Article 21 — Service contracts listed in Annex II B
Article 22 — Mixed contracts including services listed in Annex II A and services listed in Annex II B
CHAPTER IV
Specific rules governing specifications and contract documents
Article 23 — Technical specifications
Article 24 — Variants
Article 25 — Subcontracting
Article 26 — Conditions for performance of contracts
Article 27 — Obligations relating to taxes, environmental protection, employment protection provisions and working conditions
CHAPTER V
Procedures
Article 28 — Use of open, restricted and negotiated procedures and of competitive dialogue
Article 29 — Competitive dialogue
Article 30 — Cases justifying use of the negotiated procedure with prior publication of a contract notice
Article 31 — Cases justifying use of the negotiated procedure without publication of a contract notice
Article 32 — Framework agreements
Article 33 — Dynamic purchasing systems
Article 34 — Public works contracts: particular rules on subsidized housing schemes
CHAPTER VI
Rules on advertising and transparency
Section 1 — Publication of notices
Article 35 — Notices
Article 36 — Form and manner of publication of notices
Article 37 — Non-mandatory publication
Section 2 — Time limits
Article 38 — Time limits for receipt of requests to participate and for receipt of tenders
Article 39 — Open procedures: Specifications, additional documents and information
Section 3 — Information content and means of transmission
Article 40 — Invitations to submit a tender, participate in the dialogue or negotiate
Article 41 — Informing candidates and tenderers
Section 4 — Communication
Article 42 — Rules applicable to communication
Section 5 — Reports
Article 43 — Content of reports
CHAPTER V I I
Conduct of the procedure
S e c t i o n 1 — G e n e r a l p r o v i s i o n s
Article 44 — Verification of the suitability and choice of participants and award of contracts
S e c t i o n 2 — C r i t e r i a f o r q u a l i t a t i v e s e l e c t i o n
Article 45 — Personal situation of the candidate or tenderer
Article 46 — Suitability to pursue the professional activity
Article 47 — Economic and financial standing
Article 48 — Technical and/or professional ability
Article 49 — Quality assurance standards
Article 50 — Environmental management standards
Article 51 — Additional documentation and information
Article 52 — Official lists of approved economic operators and certification by bodies established under public or private law
S e c t i o n 3 — A w a r d o f t h e c o n t r a c t
Article 53 — Contract award criteria
Article 54 — Use of electronic auctions
Article 55 — Abnormally low tenders
TITLE III
Rules on public works concessions
CHAPTER I
Rules governing public works concessions
Article 56 — Scope
Article 57 — Exclusions from the scope
Article 58 — Publication of the notice concerning public works concessions
Article 59 — Time limit
Article 60 — Subcontracting
Article 61 — Awarding of additional works to the concessionaire
CHAPTER II
Rules on contracts awarded by concessionaires which are contracting authorities
Article 62 — Applicable rules
CHAPTER III
Rules applicable to contracts awarded by concessionaires which are not contracting authorities
Article 63 — Advertising rules: threshold and exceptions
Article 64 — Publication of the notice
Article 65 — Time limit for the receipt of requests to participate and receipt of tenders
TITLE IV
Rules governing design contests
Article 66 — General provisions
Article 67 — Scope
Article 68 — Exclusions from the scope
Article 69 — Notices
Article 70 — Form and manner of publication of notices of contests
Article 71 — Means of communication
Article 72 — Selection of competitors
Article 73 — Composition of the jury
Article 74 — Decisions of the jury
TITLE V
Statistical obligations, executory powers and final provisions
Article 75 — Statistical obligations
Article 76 — Content of statistical report
Article 77 — Advisory Committee
Article 78 — Revision of the thresholds
Article 79 — Amendments
Article 80 — Implementation
Article 81 — Monitoring mechanisms
Article 82 — Repeals
Article 83 — Entry into force
Article 84 — Addressees
ANNEXES
Annex I — List of the activities referred to in Article 1(2)(b)
Annex II — Services referred to in Article 1(2)(d)
Annex II A
Annex II B
Annex III — List of bodies and categories of bodies governed by public law referred to in the second subparagraph of Article 1(9)
Annex IV — Central Government authorities
Annex V — List of products referred to in Article 7 with regard to contracts awarded by contracting authorities in the field of defence
Annex VI — Definition of certain technical specifications
Annex VII — Information to be included in notices
Annex VII A — Information to be included in public contract notices
Annex VII B — Information which must appear in public works concession notices
Annex VII C — Information which must appear in works contracts notices of concessionaires who are not contracting authorities
Annex VII D — Information which must appear in design contest notices
Annex VIII — Features concerning publication
Annex IX — Registers
Annex IX A — Public works contracts
Annex IX B — Public supply contracts
Annex IX C — Public service contracts
Annex X — Requirements relating to equipment for the electronic receipt of tenders, requests to participate and plans and projects in design contests
Annex XI — Deadlines for transportation and application (Article 80)
Annex XII — Correlation table
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
The Procurement Directive entered into force on publication in the Official Journal of the European Union, and the member states had the obligation to transpose the Directive into national law on 31 January 2006, at the latest.
***
Directives
Article 249 of the Treaty establishing the European Community (TEC) describes the legal act called Directive:
-----
A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.
-----
***
The Procurement Directive or Classic Directive contains both mandatory uniform rules, which the member states have to put into effect, and optional rules, but the ‘forms and methods’ are different in the various member states.
This means that there are differences between the national legislations, within the limits of the Directive and ECJ jurisprudence.
***
Here is the Table of Contents of the EU Procurement Directive 2004/18/EC:
TABLE OF CONTENTS
TITLE I
Definitions and general principles
Article 1 — Definitions
Article 2 — Principles of awarding contracts
Article 3 — Granting of special or exclusive rights: nondiscrimination clause
TITLE II
Rules on public contracts
CHAPTER I
General provisions
Article 4 — Economic operators
Article 5 — Conditions relating to agreements concluded
within the World Trade Organisation
Article 6 — Confidentiality
CHAPTER I I
Scope
S e c t i o n 1 — T h r e s h o l d s
Article 7 — Threshold amounts for public contracts
Article 8 — Contracts subsidised by more than 50 % by contracting authorities
Article 9 — Methods for calculating the estimated value of public contracts, framework agreements and dynamic purchasing systems
S e c t i o n 2 — S p e c i f i c s i t u a t i o n s
Article 10 — Defence procurement
Article 11 — Public contracts and framework agreements awarded by central purchasing bodies
S e c t i o n 3 — E x c l u d e d c o n t r a c t s
Article 12 — Contracts in the water, energy, transport and postal services sectors
Article 13 — Specific exclusions in the field of telecommunications
Article 14 — Secret contracts and contracts requiring special security measures
Article 15 — Contracts awarded pursuant to international rules
Article 16 — Specific exclusions
Article 17 — Service concessions
Article 18 — Service contracts awarded on the basis of an exclusive right
S e c t i o n 4 — S p e c i a l a r r a n g eme n t
Article 19 — Reserved contracts
CHAPTER I I I
Arrangements for public service contracts
Article 20 — Service contracts listed in Annex II A
Article 21 — Service contracts listed in Annex II B
Article 22 — Mixed contracts including services listed in Annex II A and services listed in Annex II B
CHAPTER IV
Specific rules governing specifications and contract documents
Article 23 — Technical specifications
Article 24 — Variants
Article 25 — Subcontracting
Article 26 — Conditions for performance of contracts
Article 27 — Obligations relating to taxes, environmental protection, employment protection provisions and working conditions
CHAPTER V
Procedures
Article 28 — Use of open, restricted and negotiated procedures and of competitive dialogue
Article 29 — Competitive dialogue
Article 30 — Cases justifying use of the negotiated procedure with prior publication of a contract notice
Article 31 — Cases justifying use of the negotiated procedure without publication of a contract notice
Article 32 — Framework agreements
Article 33 — Dynamic purchasing systems
Article 34 — Public works contracts: particular rules on subsidized housing schemes
CHAPTER VI
Rules on advertising and transparency
Section 1 — Publication of notices
Article 35 — Notices
Article 36 — Form and manner of publication of notices
Article 37 — Non-mandatory publication
Section 2 — Time limits
Article 38 — Time limits for receipt of requests to participate and for receipt of tenders
Article 39 — Open procedures: Specifications, additional documents and information
Section 3 — Information content and means of transmission
Article 40 — Invitations to submit a tender, participate in the dialogue or negotiate
Article 41 — Informing candidates and tenderers
Section 4 — Communication
Article 42 — Rules applicable to communication
Section 5 — Reports
Article 43 — Content of reports
CHAPTER V I I
Conduct of the procedure
S e c t i o n 1 — G e n e r a l p r o v i s i o n s
Article 44 — Verification of the suitability and choice of participants and award of contracts
S e c t i o n 2 — C r i t e r i a f o r q u a l i t a t i v e s e l e c t i o n
Article 45 — Personal situation of the candidate or tenderer
Article 46 — Suitability to pursue the professional activity
Article 47 — Economic and financial standing
Article 48 — Technical and/or professional ability
Article 49 — Quality assurance standards
Article 50 — Environmental management standards
Article 51 — Additional documentation and information
Article 52 — Official lists of approved economic operators and certification by bodies established under public or private law
S e c t i o n 3 — A w a r d o f t h e c o n t r a c t
Article 53 — Contract award criteria
Article 54 — Use of electronic auctions
Article 55 — Abnormally low tenders
TITLE III
Rules on public works concessions
CHAPTER I
Rules governing public works concessions
Article 56 — Scope
Article 57 — Exclusions from the scope
Article 58 — Publication of the notice concerning public works concessions
Article 59 — Time limit
Article 60 — Subcontracting
Article 61 — Awarding of additional works to the concessionaire
CHAPTER II
Rules on contracts awarded by concessionaires which are contracting authorities
Article 62 — Applicable rules
CHAPTER III
Rules applicable to contracts awarded by concessionaires which are not contracting authorities
Article 63 — Advertising rules: threshold and exceptions
Article 64 — Publication of the notice
Article 65 — Time limit for the receipt of requests to participate and receipt of tenders
TITLE IV
Rules governing design contests
Article 66 — General provisions
Article 67 — Scope
Article 68 — Exclusions from the scope
Article 69 — Notices
Article 70 — Form and manner of publication of notices of contests
Article 71 — Means of communication
Article 72 — Selection of competitors
Article 73 — Composition of the jury
Article 74 — Decisions of the jury
TITLE V
Statistical obligations, executory powers and final provisions
Article 75 — Statistical obligations
Article 76 — Content of statistical report
Article 77 — Advisory Committee
Article 78 — Revision of the thresholds
Article 79 — Amendments
Article 80 — Implementation
Article 81 — Monitoring mechanisms
Article 82 — Repeals
Article 83 — Entry into force
Article 84 — Addressees
ANNEXES
Annex I — List of the activities referred to in Article 1(2)(b)
Annex II — Services referred to in Article 1(2)(d)
Annex II A
Annex II B
Annex III — List of bodies and categories of bodies governed by public law referred to in the second subparagraph of Article 1(9)
Annex IV — Central Government authorities
Annex V — List of products referred to in Article 7 with regard to contracts awarded by contracting authorities in the field of defence
Annex VI — Definition of certain technical specifications
Annex VII — Information to be included in notices
Annex VII A — Information to be included in public contract notices
Annex VII B — Information which must appear in public works concession notices
Annex VII C — Information which must appear in works contracts notices of concessionaires who are not contracting authorities
Annex VII D — Information which must appear in design contest notices
Annex VIII — Features concerning publication
Annex IX — Registers
Annex IX A — Public works contracts
Annex IX B — Public supply contracts
Annex IX C — Public service contracts
Annex X — Requirements relating to equipment for the electronic receipt of tenders, requests to participate and plans and projects in design contests
Annex XI — Deadlines for transportation and application (Article 80)
Annex XII — Correlation table
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
Eurozone: International policies and external representation
It looks like a natural consequence of economic and monetary union that the European Union (European Community) would have unified policies and representation in its dealings with the outside world.
The existing treaty expresses a desire towards more unified external representation and common EU policies in international financial organisations and conferences, but the wording is vague and the existence of both eurozone members and non-euro members complicates issues.
The intergovernmental conferences drafting the treaties have clearly recognised the need for clarification, and they have wanted to develop the euro area’s (eurozone’s) means to reach common positions and representation internationally.
The International Monetary Fund (IMF) is a starting-point for these discussions, but they concern other international financial institutions and forums (such as G7/8) as well.
***
Current treaty
The fourth paragraph of Article 111 (ex Article 109) of the current Treaty establishing the European Community (TEC) concerns the position and the representation of the European Community at international level (in the latest codified version of the treaties, Official Journal 29.12.2006 C 321 E/90):
Article 111(4) TEC
-----
4. Subject to paragraph 1, the Council, acting by a qualified majority on a proposal from the Commission and after consulting the ECB, shall decide on the position of the Community at international level as regards issues of particular relevance to economic and monetary union and on its representation, in compliance with the allocation of powers laid down in Articles 99 and 105.
-----
***
Scope
The scope of Article 111(4) TEC is interesting. Formal exchange-rate regimes are treated separately (paragraph 1). Economic policy is mainly a matter within member state competence. The European Central Bank is meant to have autonomy in international monetary matters.
***
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. Common euro area policies and eurozone representation internationally were given a sharper focus in Article III-90 of the draft Constitution (OJ 18.7.2003 C 169/44─45):
Article III-90 Draft Constitution
1. In order to secure the euro's place in the international monetary system, the Council of Ministers, on a proposal from the Commission and after consulting the European Central Bank, shall adopt a European decision establishing common positions on matters of particular interest for economic and monetary union within the competent international financial institutions and conferences.
2. For the measures referred to in paragraph 1, only members of the Council of Ministers representing Member States which are part of the euro area shall vote. A qualified majority shall be defined as the majority of the votes of the representatives of the Member States which are part of the euro area, representing at least three fifths of their population. Unanimity of those members of the Council of Ministers shall be required for an act requiring unanimity.
3. The Council of Ministers, on a proposal from the Commission, may adopt appropriate measures to ensure unified representation within the international financial institutions and conferences. The procedural provisions of paragraphs 1 and 2 shall apply.
***
Finland
The Finnish government reported on the results of the European Convention in Valtioneuvoston selonteko Eduskunnalle konventin tuloksista ja valmistautumisesta hallitusten väliseen konferenssiin (VNS 2/2003 vp). The government remarked that the Finnish Convention delegates had supported the proposals to prepare common EMU positions and to decide on unified representation in international financial institutions and conferences (page 66):
”Euroalueen ulkoista edustamista vahvistetaan perustuslaillisessa sopimuksessa siten, että neuvosto voi komission aloitteesta ja EKP:ia kuultuaan hyväksyä päätöksiä joilla vahvistetaan yhteinen kanta EMU:n kannalta keskeisissä kysymyksissä kansainvälisiä rahoituslaitoksia tai konferensseja silmälläpitäen. Samoin neuvosto voi hyväksyä toimia joilla varmistetaan euroalueen yhtenäinen edustautuminen kansainvälisissä rahoituslaitoksissa ja konferensseissa. Näissä tapauksissa päätöksentekoon osallistuvat vain euroalueeseen osallistuvat jäsenvaltiot. Suomen edustajat konventissa tukivat näitä ehdotuksia.”
***
Sweden
Ahead of the intergovernmental conference, the Swedish government presented its views in Regeringens skrivelse 2003/04:13 Europeiska konventet om EU:s framtid (2 October 2003). Non-euro Sweden was fairly supportive of effective decision-making in the eurozone and international representation for the euro area in international financial institutions (page 50):
”Det kan finnas skäl för euroländerna att på olika sätt säkerställa ett väl fungerande beslutsfattande i euroområdet. Det är dock viktigt att samordningsprocesserna behåller sin gemensamma karaktär. Det är också förståeligt att euroländerna vill uppnå en effektiv representation av euroområdet i internationella finansiella institutioner.”
***
Constitutional Treaty
The intergovernmental conference (IGC 2004) re-ordered, but essentially maintained the Convention proposal in Article III-196 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/86):
Article III-196 Constitution
1. In order to secure the euro's place in the international monetary system, the Council, on a proposal from the Commission, shall adopt a European decision establishing common positions on matters of particular interest for economic and monetary union within the competent international financial institutions and conferences. The Council shall act after consulting the European Central Bank.
2. The Council, on a proposal from the Commission, may adopt appropriate measures to ensure unified representation within the international financial institutions and conferences. The Council shall act after consulting the European Central Bank.
3. For the measures referred to in paragraphs 1 and 2, only members of the Council representing Member States whose currency is the euro shall take part in the vote.
A qualified majority shall be defined as at least 55 % of these members of the Council, representing Member States comprising at least 65 % of the population of the participating Member States.
A blocking minority must include at least the minimum number of these 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.
***
Sweden
The government of Sweden, still outside the eurozone, described the common positions and the euro area representation in the draft ratification bill, Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 June 2005), page 172. The Swedish government saw that the Constitutional Treaty strengthened the external action of the euro countries:
”Euroländernas externa agerande
När frågor av särskilt intresse för valutaunionen diskuteras vid internationella finansiella institutioner och konferenser skall enligt dagens bestämmelser beslut om vilken ståndpunkt gemenskapen skall framföra fattas med kvalificerad majoritet av rådet. Beslutet fattas på förslag av kommissionen efter att ha hört Europeiska centralbanken. Nuvarande fördrag specificerar inte på vilket sätt den gemensamma ståndpunkten skall förmedlas, dvs. hur euroländerna skall vara representerade. I det konstitutionella fördraget stärks euroländernas s.k. externa agerande. Detta sker dels genom att endast euroländer får delta i beslutsfattandet om gemensamma ståndpunkter i frågor av särskild betydelse för valutaunionen och om hur dessa ståndpunkter skall framföras, dels genom stärkt stimulans för enad representation vid internationella finansiella institutioner och konferenser (artikel III-196).”
***
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
-----
Article 115 C TFEU (ToL)
1. In order to secure the euro's place in the international monetary system, the Council, on a proposal from the Commission, shall adopt a decision establishing common positions on matters of particular interest for economic and monetary union within the competent international financial institutions and conferences. The Council shall act after consulting the European Central Bank.
2. The Council, on a proposal from the Commission, may adopt appropriate measures to ensure unified representation within the international financial institutions and conferences. The Council shall act after consulting the European Central Bank.
3. For the measures referred to in paragraphs 1 and 2, only members of the Council representing Member States whose currency is the euro shall take part in the vote.
A qualified majority of the said members shall be defined in accordance with Article 205(3)(a).’.
***
Renumbering
The TFEU table of equivalences confirms that the new Article 115c TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 138 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 138 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 115/107:
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 138 TFEU
(ex Article 111(4), TEC)
1. In order to secure the euro's place in the international monetary system, the Council, on a proposal from the Commission, shall adopt a decision establishing common positions on matters of particular interest for economic and monetary union within the competent international financial institutions and conferences. The Council shall act after consulting the European Central Bank.
2. The Council, on a proposal from the Commission, may adopt appropriate measures to ensure unified representation within the international financial institutions and conferences. The Council shall act after consulting the European Central Bank.
3. For the measures referred to in paragraphs 1 and 2, only members of the Council representing Member States whose currency is the euro shall take part in the vote.
A qualified majority of the said members shall be defined in accordance with Article 238(3)(a).
***
Sweden
The Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008), on page 183, mentions the external representation for the euro countries in the same terms as concerning the Constitutional Treaty:
”Euroländernas externa agerande
När frågor av särskilt intresse för valutaunionen diskuteras vid internationella finansiella institutioner och konferenser ska enligt dagens bestämmelser beslut om vilken ståndpunkt gemenskapen ska framföra fattas med kvalificerad majoritet av rådet (artikel 111.4 i EG-fördraget). Beslutet fattas på förslag av kommissionen efter att ha hört Europeiska centralbanken. Nu gällande EG-fördrag specificerar inte på vilket sätt den gemensamma ståndpunkten ska förmedlas, dvs. hur euroländerna ska vara representerade. Genom Lissabonfördraget stärks euroländernas s.k. externa agerande. Detta sker dels genom att endast euroländer får delta i beslutsfattandet om gemensamma ståndpunkter i frågor av särskilt intresse för den ekonomiska och monetära unionen och om hur dessa ståndpunkter ska framföras, dels genom stärkt stimulans för enad representation vid internationella finansinstitutioner och finanskonferenser (artikel 115c i EUF-fördraget).”
***
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.
There is an informative section under the headline « Vers une representation unifiée de la zone euro dans les enceintes internationales ».
***
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 138 TFEU (on page 13):
“Draws on Article 111(4). Develops arrangements for international representation.”
***
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.”
***
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, including a few words on external representation (last update 7 November 2008):
http://en.wikipedia.org/wiki/Eurozone
***
Article 138 TFEU clearly adopts Article III-196 of the Constitutional Treaty, except for the technical solution that the Lisbon Treaty shifts the definition of a qualified majority to Article 238(3)(a) TFEU.
When it is clear that the euro area has a unified external representation and that the eurozone members decide on the common positions, it should be harder for the Eurogroup members themselves, for other EU members or for outside states and international institutions to resist unified representation and action by the euro area.
Ralf Grahn
The existing treaty expresses a desire towards more unified external representation and common EU policies in international financial organisations and conferences, but the wording is vague and the existence of both eurozone members and non-euro members complicates issues.
The intergovernmental conferences drafting the treaties have clearly recognised the need for clarification, and they have wanted to develop the euro area’s (eurozone’s) means to reach common positions and representation internationally.
The International Monetary Fund (IMF) is a starting-point for these discussions, but they concern other international financial institutions and forums (such as G7/8) as well.
***
Current treaty
The fourth paragraph of Article 111 (ex Article 109) of the current Treaty establishing the European Community (TEC) concerns the position and the representation of the European Community at international level (in the latest codified version of the treaties, Official Journal 29.12.2006 C 321 E/90):
Article 111(4) TEC
-----
4. Subject to paragraph 1, the Council, acting by a qualified majority on a proposal from the Commission and after consulting the ECB, shall decide on the position of the Community at international level as regards issues of particular relevance to economic and monetary union and on its representation, in compliance with the allocation of powers laid down in Articles 99 and 105.
-----
***
Scope
The scope of Article 111(4) TEC is interesting. Formal exchange-rate regimes are treated separately (paragraph 1). Economic policy is mainly a matter within member state competence. The European Central Bank is meant to have autonomy in international monetary matters.
***
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. Common euro area policies and eurozone representation internationally were given a sharper focus in Article III-90 of the draft Constitution (OJ 18.7.2003 C 169/44─45):
Article III-90 Draft Constitution
1. In order to secure the euro's place in the international monetary system, the Council of Ministers, on a proposal from the Commission and after consulting the European Central Bank, shall adopt a European decision establishing common positions on matters of particular interest for economic and monetary union within the competent international financial institutions and conferences.
2. For the measures referred to in paragraph 1, only members of the Council of Ministers representing Member States which are part of the euro area shall vote. A qualified majority shall be defined as the majority of the votes of the representatives of the Member States which are part of the euro area, representing at least three fifths of their population. Unanimity of those members of the Council of Ministers shall be required for an act requiring unanimity.
3. The Council of Ministers, on a proposal from the Commission, may adopt appropriate measures to ensure unified representation within the international financial institutions and conferences. The procedural provisions of paragraphs 1 and 2 shall apply.
***
Finland
The Finnish government reported on the results of the European Convention in Valtioneuvoston selonteko Eduskunnalle konventin tuloksista ja valmistautumisesta hallitusten väliseen konferenssiin (VNS 2/2003 vp). The government remarked that the Finnish Convention delegates had supported the proposals to prepare common EMU positions and to decide on unified representation in international financial institutions and conferences (page 66):
”Euroalueen ulkoista edustamista vahvistetaan perustuslaillisessa sopimuksessa siten, että neuvosto voi komission aloitteesta ja EKP:ia kuultuaan hyväksyä päätöksiä joilla vahvistetaan yhteinen kanta EMU:n kannalta keskeisissä kysymyksissä kansainvälisiä rahoituslaitoksia tai konferensseja silmälläpitäen. Samoin neuvosto voi hyväksyä toimia joilla varmistetaan euroalueen yhtenäinen edustautuminen kansainvälisissä rahoituslaitoksissa ja konferensseissa. Näissä tapauksissa päätöksentekoon osallistuvat vain euroalueeseen osallistuvat jäsenvaltiot. Suomen edustajat konventissa tukivat näitä ehdotuksia.”
***
Sweden
Ahead of the intergovernmental conference, the Swedish government presented its views in Regeringens skrivelse 2003/04:13 Europeiska konventet om EU:s framtid (2 October 2003). Non-euro Sweden was fairly supportive of effective decision-making in the eurozone and international representation for the euro area in international financial institutions (page 50):
”Det kan finnas skäl för euroländerna att på olika sätt säkerställa ett väl fungerande beslutsfattande i euroområdet. Det är dock viktigt att samordningsprocesserna behåller sin gemensamma karaktär. Det är också förståeligt att euroländerna vill uppnå en effektiv representation av euroområdet i internationella finansiella institutioner.”
***
Constitutional Treaty
The intergovernmental conference (IGC 2004) re-ordered, but essentially maintained the Convention proposal in Article III-196 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/86):
Article III-196 Constitution
1. In order to secure the euro's place in the international monetary system, the Council, on a proposal from the Commission, shall adopt a European decision establishing common positions on matters of particular interest for economic and monetary union within the competent international financial institutions and conferences. The Council shall act after consulting the European Central Bank.
2. The Council, on a proposal from the Commission, may adopt appropriate measures to ensure unified representation within the international financial institutions and conferences. The Council shall act after consulting the European Central Bank.
3. For the measures referred to in paragraphs 1 and 2, only members of the Council representing Member States whose currency is the euro shall take part in the vote.
A qualified majority shall be defined as at least 55 % of these members of the Council, representing Member States comprising at least 65 % of the population of the participating Member States.
A blocking minority must include at least the minimum number of these 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.
***
Sweden
The government of Sweden, still outside the eurozone, described the common positions and the euro area representation in the draft ratification bill, Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 June 2005), page 172. The Swedish government saw that the Constitutional Treaty strengthened the external action of the euro countries:
”Euroländernas externa agerande
När frågor av särskilt intresse för valutaunionen diskuteras vid internationella finansiella institutioner och konferenser skall enligt dagens bestämmelser beslut om vilken ståndpunkt gemenskapen skall framföra fattas med kvalificerad majoritet av rådet. Beslutet fattas på förslag av kommissionen efter att ha hört Europeiska centralbanken. Nuvarande fördrag specificerar inte på vilket sätt den gemensamma ståndpunkten skall förmedlas, dvs. hur euroländerna skall vara representerade. I det konstitutionella fördraget stärks euroländernas s.k. externa agerande. Detta sker dels genom att endast euroländer får delta i beslutsfattandet om gemensamma ståndpunkter i frågor av särskild betydelse för valutaunionen och om hur dessa ståndpunkter skall framföras, dels genom stärkt stimulans för enad representation vid internationella finansiella institutioner och konferenser (artikel III-196).”
***
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
-----
Article 115 C TFEU (ToL)
1. In order to secure the euro's place in the international monetary system, the Council, on a proposal from the Commission, shall adopt a decision establishing common positions on matters of particular interest for economic and monetary union within the competent international financial institutions and conferences. The Council shall act after consulting the European Central Bank.
2. The Council, on a proposal from the Commission, may adopt appropriate measures to ensure unified representation within the international financial institutions and conferences. The Council shall act after consulting the European Central Bank.
3. For the measures referred to in paragraphs 1 and 2, only members of the Council representing Member States whose currency is the euro shall take part in the vote.
A qualified majority of the said members shall be defined in accordance with Article 205(3)(a).’.
***
Renumbering
The TFEU table of equivalences confirms that the new Article 115c TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 138 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 138 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 115/107:
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 138 TFEU
(ex Article 111(4), TEC)
1. In order to secure the euro's place in the international monetary system, the Council, on a proposal from the Commission, shall adopt a decision establishing common positions on matters of particular interest for economic and monetary union within the competent international financial institutions and conferences. The Council shall act after consulting the European Central Bank.
2. The Council, on a proposal from the Commission, may adopt appropriate measures to ensure unified representation within the international financial institutions and conferences. The Council shall act after consulting the European Central Bank.
3. For the measures referred to in paragraphs 1 and 2, only members of the Council representing Member States whose currency is the euro shall take part in the vote.
A qualified majority of the said members shall be defined in accordance with Article 238(3)(a).
***
Sweden
The Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008), on page 183, mentions the external representation for the euro countries in the same terms as concerning the Constitutional Treaty:
”Euroländernas externa agerande
När frågor av särskilt intresse för valutaunionen diskuteras vid internationella finansiella institutioner och konferenser ska enligt dagens bestämmelser beslut om vilken ståndpunkt gemenskapen ska framföra fattas med kvalificerad majoritet av rådet (artikel 111.4 i EG-fördraget). Beslutet fattas på förslag av kommissionen efter att ha hört Europeiska centralbanken. Nu gällande EG-fördrag specificerar inte på vilket sätt den gemensamma ståndpunkten ska förmedlas, dvs. hur euroländerna ska vara representerade. Genom Lissabonfördraget stärks euroländernas s.k. externa agerande. Detta sker dels genom att endast euroländer får delta i beslutsfattandet om gemensamma ståndpunkter i frågor av särskilt intresse för den ekonomiska och monetära unionen och om hur dessa ståndpunkter ska framföras, dels genom stärkt stimulans för enad representation vid internationella finansinstitutioner och finanskonferenser (artikel 115c i EUF-fördraget).”
***
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.
There is an informative section under the headline « Vers une representation unifiée de la zone euro dans les enceintes internationales ».
***
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 138 TFEU (on page 13):
“Draws on Article 111(4). Develops arrangements for international representation.”
***
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.”
***
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, including a few words on external representation (last update 7 November 2008):
http://en.wikipedia.org/wiki/Eurozone
***
Article 138 TFEU clearly adopts Article III-196 of the Constitutional Treaty, except for the technical solution that the Lisbon Treaty shifts the definition of a qualified majority to Article 238(3)(a) TFEU.
When it is clear that the euro area has a unified external representation and that the eurozone members decide on the common positions, it should be harder for the Eurogroup members themselves, for other EU members or for outside states and international institutions to resist unified representation and action by the euro area.
Ralf Grahn
Thursday, 13 November 2008
Sweden: Lisbon Treaty cleared for plenary
The Committee on Foreign Affairs of the Swedish Parliament (Sveriges Riksdag) has cleared the EU Treaty of Lisbon for ratification by the plenary session planned for 20 November 2008.
According to the press release, Utrikesutskottet säger ja till Lissabonfördraget (13 November 2008), five of the seven political parties represented favour ratification.
The Lisbon Treaty does not require any amendment to the Swedish Constitution, but a majority of three fourths of the votes is needed to let the amending treaty pass during this legislature.
The press release (in Swedish) is available at:
http://www.riksdagen.se/Webbnav/index.aspx?nid=45&sq=1&ID=flccvp7D8_B_B
The Committee report has not been published yet.
Ralf Grahn
According to the press release, Utrikesutskottet säger ja till Lissabonfördraget (13 November 2008), five of the seven political parties represented favour ratification.
The Lisbon Treaty does not require any amendment to the Swedish Constitution, but a majority of three fourths of the votes is needed to let the amending treaty pass during this legislature.
The press release (in Swedish) is available at:
http://www.riksdagen.se/Webbnav/index.aspx?nid=45&sq=1&ID=flccvp7D8_B_B
The Committee report has not been published yet.
Ralf Grahn
Introducing EU Public Procurement Directive
The remaining EU Public Procurement Directive 2004/18/EC recitals form the backbone of this introductory blog post. The Directive is in force in the European Economic Area (EEA).
***
Registration of contractors
Recital 45 deals with registration and certification of suppliers:
(45) This Directive allows Member States to establish official lists of contractors, suppliers or service providers or a system of certification by public or private bodies, and makes provision for the effects of such registration or such certification in a contract award procedure in another Member State. As regards official lists of approved economic operators, it is important to take into account Court of Justice case-law in cases where an economic operator belonging to a group claims the economic, financial or technical capabilities of other companies in the group in support of its application for registration. In this case, it is for the economic operator to prove that those resources will actually be available to it throughout the period of validity of the registration. For the purposes of that registration, a Member State may therefore determine the level of requirements to be met and in particular, for example where the operator lays claim to the financial standing of another company in the group, it may require that that company be held liable, if necessary jointly and severally.
***
Award criteria
Only two award criteria are allowed: the lowest price or the most economically advantageous tender. Recital 46 of the Procurement Directive 2004/18/EC offers a lengthy description of how these criteria are to be ensured:
(46) Contracts should be awarded on the basis of objective criteria which ensure compliance with the principles of transparency, non-discrimination and equal treatment and which guarantee that tenders are assessed in conditions of effective competition. As a result, it is appropriate to allow the application of two award criteria only: ‘the lowest price’ and ‘the most economically advantageous tender’.
To ensure compliance with the principle of equal treatment in the award of contracts, it is appropriate to lay down an obligation — established by case-law — to ensure the necessary transparency to enable all tenderers to be reasonably informed of the criteria European Parliament and arrangements which will be applied to identify the most economically advantageous tender. It is therefore the responsibility of contracting authorities to indicate the criteria for the award of the contract and the relative weighting given to each of those criteria in sufficient time for tenderers to be aware of them when preparing their tenders. Contracting authorities may derogate from indicating the weighting of the criteria for the award in duly justified cases for which they must be able to give reasons, where the weighting cannot be established in advance, in particular on account of the complexity of the contract. In such cases, they must indicate the descending order of importance of the criteria.
Where the contracting authorities choose to award a contract to the most economically advantageous tender, they shall assess the tenders in order to determine which one offers the best value for money. In order to do this, they shall determine the economic and quality criteria which, taken as a whole, must make it possible to determine the most economically advantageous tender for the contracting authority. The determination of these criteria depends on the object of the contract since they must allow the level of performance offered by each tender to be assessed in the light of the object of the contract, as defined in the technical specifications, and the value for money of each tender to be measured.
In order to guarantee equal treatment, the criteria for the award of the contract should enable tenders to be compared and assessed objectively. If these conditions are fulfilled, economic and qualitative criteria for the award of the contract, such as meeting environmental requirements, may enable the contracting authority to meet the needs of the public concerned, as expressed in the specifications of the contract. Under the same conditions, a contracting authority may use criteria aiming to meet social requirements, in response in particular to the needs — defined in the specifications of the contract — of particularly disadvantaged groups of people to which those receiving/using the works, supplies or services which are the object of the contract belong.
***
National provisions
Recital 47 mentions certain national provisions not to be affected by the award criteria:
(47) In the case of public service contracts, the award criteria must not affect the application of national provisions on the remuneration of certain services, such as, for example, the services performed by architects, engineers or lawyers and, where public supply contracts are concerned, the application of national provisions setting out fixed prices for school books.
***
Flexible amendments
Recital 48 refers to the need for flexible amendments to technical conditions and other changing information:
(48) Certain technical conditions, and in particular those concerning notices and statistical reports, as well as the nomenclature used and the conditions of reference to that nomenclature, will need to be adopted and amended in the light of changing technical requirements. The lists of contracting authorities in the Annexes will also need to be updated. It is therefore appropriate to put in place a flexible and rapid adoption procedure for this purpose.
***
Implementing measures
Recital 49 of the Procurement Directive 2004/18/EC refers to needed implementing measures:
(49) The measures necessary for the implementation of this Directive should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (1).
(1) OJ L 184, 17.7.1999, p. 23.
***
Time limits
Calculation of time limits is evoked in recital 50:
(50) It is appropriate that Council Regulation (EEC, Euratom) No 1182/71 of 3 June 1971 determining the rules applicable to periods, dates and time limits (2) should apply to the calculation of the time limits contained in this Directive.
(2) OJ L 124, 8.6.1971, p. 1.
***
Transposition of old directives
The new Directive does not eliminate the obligation to transpose the old ones:
(51) This Directive should not prejudice the time limits set out in Annex XI, within which Member States are required to transpose and apply Directives 92/50/EEC, 93/36/EEC and 93/37/EEC.
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
The Directives and Regulations mentioned in the footnotes have not necessarily been checked for amendments.
Ralf Grahn
***
Registration of contractors
Recital 45 deals with registration and certification of suppliers:
(45) This Directive allows Member States to establish official lists of contractors, suppliers or service providers or a system of certification by public or private bodies, and makes provision for the effects of such registration or such certification in a contract award procedure in another Member State. As regards official lists of approved economic operators, it is important to take into account Court of Justice case-law in cases where an economic operator belonging to a group claims the economic, financial or technical capabilities of other companies in the group in support of its application for registration. In this case, it is for the economic operator to prove that those resources will actually be available to it throughout the period of validity of the registration. For the purposes of that registration, a Member State may therefore determine the level of requirements to be met and in particular, for example where the operator lays claim to the financial standing of another company in the group, it may require that that company be held liable, if necessary jointly and severally.
***
Award criteria
Only two award criteria are allowed: the lowest price or the most economically advantageous tender. Recital 46 of the Procurement Directive 2004/18/EC offers a lengthy description of how these criteria are to be ensured:
(46) Contracts should be awarded on the basis of objective criteria which ensure compliance with the principles of transparency, non-discrimination and equal treatment and which guarantee that tenders are assessed in conditions of effective competition. As a result, it is appropriate to allow the application of two award criteria only: ‘the lowest price’ and ‘the most economically advantageous tender’.
To ensure compliance with the principle of equal treatment in the award of contracts, it is appropriate to lay down an obligation — established by case-law — to ensure the necessary transparency to enable all tenderers to be reasonably informed of the criteria European Parliament and arrangements which will be applied to identify the most economically advantageous tender. It is therefore the responsibility of contracting authorities to indicate the criteria for the award of the contract and the relative weighting given to each of those criteria in sufficient time for tenderers to be aware of them when preparing their tenders. Contracting authorities may derogate from indicating the weighting of the criteria for the award in duly justified cases for which they must be able to give reasons, where the weighting cannot be established in advance, in particular on account of the complexity of the contract. In such cases, they must indicate the descending order of importance of the criteria.
Where the contracting authorities choose to award a contract to the most economically advantageous tender, they shall assess the tenders in order to determine which one offers the best value for money. In order to do this, they shall determine the economic and quality criteria which, taken as a whole, must make it possible to determine the most economically advantageous tender for the contracting authority. The determination of these criteria depends on the object of the contract since they must allow the level of performance offered by each tender to be assessed in the light of the object of the contract, as defined in the technical specifications, and the value for money of each tender to be measured.
In order to guarantee equal treatment, the criteria for the award of the contract should enable tenders to be compared and assessed objectively. If these conditions are fulfilled, economic and qualitative criteria for the award of the contract, such as meeting environmental requirements, may enable the contracting authority to meet the needs of the public concerned, as expressed in the specifications of the contract. Under the same conditions, a contracting authority may use criteria aiming to meet social requirements, in response in particular to the needs — defined in the specifications of the contract — of particularly disadvantaged groups of people to which those receiving/using the works, supplies or services which are the object of the contract belong.
***
National provisions
Recital 47 mentions certain national provisions not to be affected by the award criteria:
(47) In the case of public service contracts, the award criteria must not affect the application of national provisions on the remuneration of certain services, such as, for example, the services performed by architects, engineers or lawyers and, where public supply contracts are concerned, the application of national provisions setting out fixed prices for school books.
***
Flexible amendments
Recital 48 refers to the need for flexible amendments to technical conditions and other changing information:
(48) Certain technical conditions, and in particular those concerning notices and statistical reports, as well as the nomenclature used and the conditions of reference to that nomenclature, will need to be adopted and amended in the light of changing technical requirements. The lists of contracting authorities in the Annexes will also need to be updated. It is therefore appropriate to put in place a flexible and rapid adoption procedure for this purpose.
***
Implementing measures
Recital 49 of the Procurement Directive 2004/18/EC refers to needed implementing measures:
(49) The measures necessary for the implementation of this Directive should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (1).
(1) OJ L 184, 17.7.1999, p. 23.
***
Time limits
Calculation of time limits is evoked in recital 50:
(50) It is appropriate that Council Regulation (EEC, Euratom) No 1182/71 of 3 June 1971 determining the rules applicable to periods, dates and time limits (2) should apply to the calculation of the time limits contained in this Directive.
(2) OJ L 124, 8.6.1971, p. 1.
***
Transposition of old directives
The new Directive does not eliminate the obligation to transpose the old ones:
(51) This Directive should not prejudice the time limits set out in Annex XI, within which Member States are required to transpose and apply Directives 92/50/EEC, 93/36/EEC and 93/37/EEC.
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
The Directives and Regulations mentioned in the footnotes have not necessarily been checked for amendments.
Ralf Grahn
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.
***
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.
***
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.
***
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.
***
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.”
***
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
-----
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.
***
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.)
***
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.
***
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.”
***
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).
***
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.”
***
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.”
***
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
***
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.
***
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.
***
The next TFEU post is going to look at the Eurogroup on the international scene.
Ralf Grahn
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.
***
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.
***
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.
***
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.
***
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.”
***
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
-----
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.
***
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.)
***
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.
***
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.”
***
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).
***
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.”
***
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.”
***
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
***
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.
***
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.
***
The next TFEU post is going to look at the Eurogroup on the international scene.
Ralf Grahn
Wednesday, 12 November 2008
EU Public Procurement Directive introduction continued
We continue our look at the introductory recitals of the EU Public Procurement Directive 2004/18/EC.
***
Transparency
Non-discriminatory selection criteria are underlined in recital 39:
(39) Verification of the suitability of tenderers, in open procedures, and of candidates, in restricted and negotiated procedures with publication of a contract notice and in the competitive dialogue, and the selection thereof, should be carried out in transparent conditions. For this purpose, non-discriminatory criteria should be indicated which the contracting authorities may use when selecting competitors and the means which economic operators may use to prove they have satisfied those criteria. In the same spirit of transparency, the contracting authority should be required, as soon as a contract is put out to competition, to indicate the selection criteria it will use and the level of specific competence it may or may not demand of the economic operators before admitting them to the procurement procedure.
**
Limited number of candidates
Objective criteria are required, when the number of candidates is limited in restricted and negotiated procedures and in a competitive dialogue:
(40) A contracting authority may limit the number of candidates in the restricted and negotiated procedures with publication of a contract notice, and in the competitive dialogue. Such a reduction of candidates should be performed on the basis of objective criteria indicated in the contract notice. These objective criteria do not necessarily imply weightings. For criteria relating to the personal situation of economic operators, a general reference in the contract notice to the situations set out in Article 45 may suffice.
***
Genuine competition
Genuine competition should be ensured, even if the number of tenders is successively reduced in a competitive dialogue or a negotiated procedure:
(41) In the competitive dialogue and negotiated procedures with publication of a contract notice, in view of the flexibility which may be required and the high level of costs associated with such methods of procurement, contracting authorities should be entitled to make provision for the procedure to be conducted in successive stages in order gradually to reduce, on the basis of previously indicated contract award criteria, the number of tenders which they will go on to discuss or negotiate. This reduction should, insofar as the number of appropriate solutions or candidates allows, ensure that there is genuine competition.
***
Mutual recognition of qualifications
Recital 42 reminds that the Community rules on mutual recognition of diplomas, certificates and other formal qualifications apply in procurement procedures:
(42) The relevant Community rules on mutual recognition of diplomas, certificates or other evidence of formal qualifications apply when evidence of a particular qualification is required for participation in a procurement procedure or a design contest.
***
Grounds for exclusion
Certain undesirable candidates can be excluded from procurement proceedings:
(43) The award of public contracts to economic operators who have participated in a criminal organisation or who have been found guilty of corruption or of fraud to the detriment of the financial interests of the European Communities or of money laundering should be avoided. Where appropriate, the contracting authorities should ask candidates or tenderers to supply relevant documents and, where they have doubts concerning the personal situation of a candidate or tenderer, they may seek the cooperation of the competent authorities of the Member State concerned. The exclusion of such economic operators should take place as soon as the contracting authority has knowledge of a judgment concerning such offences rendered in accordance with national law that has the force of res judicata. If national law contains provisions to this effect, non-compliance with environmental legislation or legislation on unlawful agreements in public contracts which has been the subject of a final judgment or a decision having equivalent effect may be considered an offence concerning the professional conduct of the economic operator concerned or grave misconduct. Non-observance of national provisions implementing the Council
Directives 2000/78/EC (1) and 76/207/EEC (2) concerning equal treatment of workers, which has been the subject of a final judgment or a decision having equivalent effect may be considered an offence concerning the professional conduct of the economic operator concerned or grave misconduct.
(1) Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation (OJ L 303, 2.12.2000, p. 16).
(2) Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions (OJ L 39, 14.2.1976, p. 40). Directive amended by Directive 2002/73/EC of the European Parliament and of the Council (OJ L 269, 5.10.2002, p. 15).
**
Environmental management measures
Recital 44 of the Procurement Directive 2004/18/EC allows requiring proof of technical ability to perform a contract with environmental implications:
(44) In appropriate cases, in which the nature of the works and/or services justifies applying environmental management measures or schemes during the performance of a public contract, the application of such measures or schemes may be required. Environmental management schemes, whether or not they are registered under Community instruments such as Regulation (EC) No 761/2001 (3) (EMAS), can demonstrate that the economic operator has the technical capability to perform the contract. Moreover, a description of the measures implemented by the economic operator to ensure the same level of environmental protection should be accepted as an alternative to environmental management registration schemes as a form of evidence.
(3) Regulation (EC) No 761/2001 of the European Parliament and of the Council of 19 March 2001 allowing a voluntary participation by organisations in a Community eco-management and audit scheme (EMAS) (OJ L 114, 24.4.2001, p. 1).
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
The Directives and Regulations mentioned in the footnotes have not necessarily been checked for amendments.
Ralf Grahn
***
Transparency
Non-discriminatory selection criteria are underlined in recital 39:
(39) Verification of the suitability of tenderers, in open procedures, and of candidates, in restricted and negotiated procedures with publication of a contract notice and in the competitive dialogue, and the selection thereof, should be carried out in transparent conditions. For this purpose, non-discriminatory criteria should be indicated which the contracting authorities may use when selecting competitors and the means which economic operators may use to prove they have satisfied those criteria. In the same spirit of transparency, the contracting authority should be required, as soon as a contract is put out to competition, to indicate the selection criteria it will use and the level of specific competence it may or may not demand of the economic operators before admitting them to the procurement procedure.
**
Limited number of candidates
Objective criteria are required, when the number of candidates is limited in restricted and negotiated procedures and in a competitive dialogue:
(40) A contracting authority may limit the number of candidates in the restricted and negotiated procedures with publication of a contract notice, and in the competitive dialogue. Such a reduction of candidates should be performed on the basis of objective criteria indicated in the contract notice. These objective criteria do not necessarily imply weightings. For criteria relating to the personal situation of economic operators, a general reference in the contract notice to the situations set out in Article 45 may suffice.
***
Genuine competition
Genuine competition should be ensured, even if the number of tenders is successively reduced in a competitive dialogue or a negotiated procedure:
(41) In the competitive dialogue and negotiated procedures with publication of a contract notice, in view of the flexibility which may be required and the high level of costs associated with such methods of procurement, contracting authorities should be entitled to make provision for the procedure to be conducted in successive stages in order gradually to reduce, on the basis of previously indicated contract award criteria, the number of tenders which they will go on to discuss or negotiate. This reduction should, insofar as the number of appropriate solutions or candidates allows, ensure that there is genuine competition.
***
Mutual recognition of qualifications
Recital 42 reminds that the Community rules on mutual recognition of diplomas, certificates and other formal qualifications apply in procurement procedures:
(42) The relevant Community rules on mutual recognition of diplomas, certificates or other evidence of formal qualifications apply when evidence of a particular qualification is required for participation in a procurement procedure or a design contest.
***
Grounds for exclusion
Certain undesirable candidates can be excluded from procurement proceedings:
(43) The award of public contracts to economic operators who have participated in a criminal organisation or who have been found guilty of corruption or of fraud to the detriment of the financial interests of the European Communities or of money laundering should be avoided. Where appropriate, the contracting authorities should ask candidates or tenderers to supply relevant documents and, where they have doubts concerning the personal situation of a candidate or tenderer, they may seek the cooperation of the competent authorities of the Member State concerned. The exclusion of such economic operators should take place as soon as the contracting authority has knowledge of a judgment concerning such offences rendered in accordance with national law that has the force of res judicata. If national law contains provisions to this effect, non-compliance with environmental legislation or legislation on unlawful agreements in public contracts which has been the subject of a final judgment or a decision having equivalent effect may be considered an offence concerning the professional conduct of the economic operator concerned or grave misconduct. Non-observance of national provisions implementing the Council
Directives 2000/78/EC (1) and 76/207/EEC (2) concerning equal treatment of workers, which has been the subject of a final judgment or a decision having equivalent effect may be considered an offence concerning the professional conduct of the economic operator concerned or grave misconduct.
(1) Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation (OJ L 303, 2.12.2000, p. 16).
(2) Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions (OJ L 39, 14.2.1976, p. 40). Directive amended by Directive 2002/73/EC of the European Parliament and of the Council (OJ L 269, 5.10.2002, p. 15).
**
Environmental management measures
Recital 44 of the Procurement Directive 2004/18/EC allows requiring proof of technical ability to perform a contract with environmental implications:
(44) In appropriate cases, in which the nature of the works and/or services justifies applying environmental management measures or schemes during the performance of a public contract, the application of such measures or schemes may be required. Environmental management schemes, whether or not they are registered under Community instruments such as Regulation (EC) No 761/2001 (3) (EMAS), can demonstrate that the economic operator has the technical capability to perform the contract. Moreover, a description of the measures implemented by the economic operator to ensure the same level of environmental protection should be accepted as an alternative to environmental management registration schemes as a form of evidence.
(3) Regulation (EC) No 761/2001 of the European Parliament and of the Council of 19 March 2001 allowing a voluntary participation by organisations in a Community eco-management and audit scheme (EMAS) (OJ L 114, 24.4.2001, p. 1).
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
The Directives and Regulations mentioned in the footnotes have not necessarily been checked for amendments.
Ralf Grahn
Euro area in Lisbon Treaty
The fifteen euro area national central banks form part of the European System of Central Banks (ESCB) run by the European Central Bank (ECB). The Eurosystem handles monetary policy.
Economic policy is discussed between the eurozone member states within the informal Euro Group, which convenes before the Ecofin Council meetings.
The members of the Euro Group have felt a need for formal recognition and specific rules for decision-making.
***
Current treaty
The Lisbon Treaty provisions we are going to look at have no corresponding Articles in the current Treaty establishing the European Community (TEC). Instead, we start by looking at the European Convention and the Constitutional Treaty.
***
Draft Constitution
The European Convention proposed a new section with the aim to strengthen the autonomy of the euro area (OJ 18.7.2003 C 169/44):
SECTION 3a
Provisions specific to Member States which are part of the euro area
Article III-88 Draft Constitution
1. In order to ensure that economic and monetary union works properly, and in accordance with the relevant provisions of the Constitution, measures specific to those Member States which are members of the euro area shall be adopted:
(a) to strengthen the coordination of their budgetary discipline and surveillance of it;
(b) to set out economic policy guidelines for them, while ensuring that they are compatible with those adopted for the whole of the Union and are kept under surveillance.
2. For those measures set out in paragraph 1, only members of the Council of Ministers representing Member States which are part of the euro area shall vote. A qualified majority shall be defined as the majority of the votes of the representatives of the Member States which are part of the euro area, representing at least three fifths of their population. Unanimity of those members of the Council of Ministers shall be required for an act requiring unanimity.
***
de Poncins
Étienne de Poncins commented on the proposed Article III-88 in Vers une Constitution européenne (Éditions 10/18, 2003), page 310:
« Commentaire : cet article nouveau a fait l’oobjet de nombreuses discussions tant au sein du Præsidium que lors des sessions plénières de la Convention. Il a pour objet de répondre à la demande des pays de la zone euro, exprimée à plusiers reprises au cours de la Convention, de renforcer les élements de leur cohésion et de permettre une meilleure gouvernance de la zone euro à prendre seuls les décisions qui les concernent.
La rédaction de cet article a été sensiblement améliorée au fil des semaines dans le sens souhaité par les pays de la zone euro. Une incertitude demeure sur sa portée exacte en relation avec les dispositions qui s’appliquent de façon générale à tous les États membres, c’est-à’dire les dispositions des articles III-71 sur les grandes orientations de politique économique et III-76 sur les déficits publics excessifs. Il reviendra à la Conférence intergouvernementale de clarifier ce point essentiel. »
***
Constitutional Treaty
The intergovernmental conference (IGC 2004) agreed on the essentials of the Convention proposal in the slightly redrafted Article III-194 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/85):
SECTION 4
PROVISIONS SPECIFIC TO MEMBER STATES WHOSE CURRENCY IS THE EURO
Article III-194 Constitution
1. In order to ensure the proper functioning of economic and monetary union, and in accordance with the relevant provisions of the Constitution, the Council shall, in accordance with the relevant procedure from among those referred to in Articles III-179 and III-184, with the exception of the procedure set out in Article III-184(13), adopt measures specific to those Member States whose currency is the euro:
(a) to strengthen the coordination and surveillance of their budgetary discipline;
(b) to set out economic policy guidelines for them, while ensuring that they are compatible with those adopted for the whole of the Union and are kept under surveillance.
2. For those measures set out in paragraph 1, only members of the Council representing Member States whose currency is the euro shall take part in the vote.
A qualified majority shall be defined as at least 55 % of these members of the Council, representing Member States comprising at least 65 % of the population of the participating Member States.
A blocking minority must include at least the minimum number of these 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.
***
Sweden
The government of non-euro Sweden described the euro area arrangements in the draft ratification bill Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 juni 2005), page 172. The Swedish government noted the strengthening of the decision-making in the euro area, with more formal coordination of economic policies. The government recognised the need for the euro area countries to ensure well-working decision-making in the eurozone:
”Euroområdet
Genom det konstitutionella fördraget kommer beslutsfattandet i euroområdet att stärkas. Redan i dag finns ett antal frågor där euroländerna själva fattar beslut, bl.a. sanktioner i stabilitets- och tillväxtpakten, växelkurspolitik och tekniska frågor som rör euromynten. Genom det nya konstitutionella fördraget kommer euroländerna att kunna samordna sin ekonomiska politik på ett mer formellt sätt. Artikel III-194 i det konstitutionella fördraget fastställer att euroländerna ska utarbeta riktlinjerna för den ekonomiska politiken och se till att dessa överensstämmer med de riktlinjer som har antagits för hela unionen. Det finns enligt regeringens bedömning skäl för euroländerna att på olika sätt säkerställa ett väl fungerande beslutsfattande i euroområdet.”
***
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).
PROVISIONS SPECIFIC TO MEMBER STATES WHOSE CURRENCY IS THE EURO
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
Article 115 A TFEU (ToL)
1. In order to ensure the proper functioning of economic and monetary union, and in accordance with the relevant provisions of the Treaties, the Council shall, in accordance with the relevant procedure from among those referred to in Articles 99 and 104, with the exception of the procedure set out in Article 104(14), adopt measures specific to those Member States whose currency is the euro:
(a) to strengthen the coordination and surveillance of their budgetary discipline;
(b) to set out economic policy guidelines for them, while ensuring that they are compatible with those adopted for the whole of the Union and are kept under surveillance.
2. For those measures set out in paragraph 1, only members of the Council representing Member States whose currency is the euro shall take part in the vote.
A qualified majority of the said members shall be defined in accordance with Article 205(3)(a).
***
Renumbering
The TFEU table of equivalences confirms that Article 115a TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 136 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 136 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 136 TFEU
1. In order to ensure the proper functioning of economic and monetary union, and in accordance with the relevant provisions of the Treaties, the Council shall, in accordance with the relevant procedure from among those referred to in Articles 121 and 126, with the exception of the procedure set out in Article 126(14), adopt measures specific to those Member States whose currency is the euro:
(a) to strengthen the coordination and surveillance of their budgetary discipline;
(b) to set out economic policy guidelines for them, while ensuring that they are compatible with those adopted for the whole of the Union and are kept under surveillance.
2. For those measures set out in paragraph 1, only members of the Council representing Member States whose currency is the euro shall take part in the vote.
A qualified majority of the said members shall be defined in accordance with Article 238(3)(a).
***
Sweden
The ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008), on page 183, mentions the Lisbon Treaty’s euro group arrangements in terms almost identical with the ones used concerning the Constitutional Treaty:
”Euroområdet
Genom Lissabonfördraget kommer beslutsfattandet i euroområdet att stärkas. Redan i dag finns ett antal frågor där euroländerna själva fattar beslut, bl.a. sanktioner i stabilitets- och tillväxtpakten, växelkurspolitik och tekniska frågor som rör euromynten. Genom Lissabonfördraget kommer euroländerna att kunna samordna sin ekonomiska politik på ett mer formellt sätt. Det fastställs att euroländerna ska stärka samordningen och övervakningen av dessa staters budgetdisciplin, utarbeta riktlinjerna för den ekonomiska politiken och se till att dessa överensstämmer med de riktlinjer som har antagits för hela unionen samt se till att de övervakas (artikel 115a i EUF-fördraget). Det finns, enligt regeringens bedömning, skäl för euroländerna att på olika sätt säkerställa ett väl fungerande beslutsfattande i euroområdet. ”
***
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).
***
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 136 TFEU (on page 13):
“New. Power to adopt measures by QMV on budgetary discipline and economic policy guidelines for Member States whose currency is the euro.”
***
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.”
***
Widipedia
With regard to the euro area generally, the Wikipedia article Eurozone offers an introduction to the single currency and a number of links (last update 7 November 2008):
http://en.wikipedia.org/wiki/Eurozone
Ralf Grahn
Economic policy is discussed between the eurozone member states within the informal Euro Group, which convenes before the Ecofin Council meetings.
The members of the Euro Group have felt a need for formal recognition and specific rules for decision-making.
***
Current treaty
The Lisbon Treaty provisions we are going to look at have no corresponding Articles in the current Treaty establishing the European Community (TEC). Instead, we start by looking at the European Convention and the Constitutional Treaty.
***
Draft Constitution
The European Convention proposed a new section with the aim to strengthen the autonomy of the euro area (OJ 18.7.2003 C 169/44):
SECTION 3a
Provisions specific to Member States which are part of the euro area
Article III-88 Draft Constitution
1. In order to ensure that economic and monetary union works properly, and in accordance with the relevant provisions of the Constitution, measures specific to those Member States which are members of the euro area shall be adopted:
(a) to strengthen the coordination of their budgetary discipline and surveillance of it;
(b) to set out economic policy guidelines for them, while ensuring that they are compatible with those adopted for the whole of the Union and are kept under surveillance.
2. For those measures set out in paragraph 1, only members of the Council of Ministers representing Member States which are part of the euro area shall vote. A qualified majority shall be defined as the majority of the votes of the representatives of the Member States which are part of the euro area, representing at least three fifths of their population. Unanimity of those members of the Council of Ministers shall be required for an act requiring unanimity.
***
de Poncins
Étienne de Poncins commented on the proposed Article III-88 in Vers une Constitution européenne (Éditions 10/18, 2003), page 310:
« Commentaire : cet article nouveau a fait l’oobjet de nombreuses discussions tant au sein du Præsidium que lors des sessions plénières de la Convention. Il a pour objet de répondre à la demande des pays de la zone euro, exprimée à plusiers reprises au cours de la Convention, de renforcer les élements de leur cohésion et de permettre une meilleure gouvernance de la zone euro à prendre seuls les décisions qui les concernent.
La rédaction de cet article a été sensiblement améliorée au fil des semaines dans le sens souhaité par les pays de la zone euro. Une incertitude demeure sur sa portée exacte en relation avec les dispositions qui s’appliquent de façon générale à tous les États membres, c’est-à’dire les dispositions des articles III-71 sur les grandes orientations de politique économique et III-76 sur les déficits publics excessifs. Il reviendra à la Conférence intergouvernementale de clarifier ce point essentiel. »
***
Constitutional Treaty
The intergovernmental conference (IGC 2004) agreed on the essentials of the Convention proposal in the slightly redrafted Article III-194 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/85):
SECTION 4
PROVISIONS SPECIFIC TO MEMBER STATES WHOSE CURRENCY IS THE EURO
Article III-194 Constitution
1. In order to ensure the proper functioning of economic and monetary union, and in accordance with the relevant provisions of the Constitution, the Council shall, in accordance with the relevant procedure from among those referred to in Articles III-179 and III-184, with the exception of the procedure set out in Article III-184(13), adopt measures specific to those Member States whose currency is the euro:
(a) to strengthen the coordination and surveillance of their budgetary discipline;
(b) to set out economic policy guidelines for them, while ensuring that they are compatible with those adopted for the whole of the Union and are kept under surveillance.
2. For those measures set out in paragraph 1, only members of the Council representing Member States whose currency is the euro shall take part in the vote.
A qualified majority shall be defined as at least 55 % of these members of the Council, representing Member States comprising at least 65 % of the population of the participating Member States.
A blocking minority must include at least the minimum number of these 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.
***
Sweden
The government of non-euro Sweden described the euro area arrangements in the draft ratification bill Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 juni 2005), page 172. The Swedish government noted the strengthening of the decision-making in the euro area, with more formal coordination of economic policies. The government recognised the need for the euro area countries to ensure well-working decision-making in the eurozone:
”Euroområdet
Genom det konstitutionella fördraget kommer beslutsfattandet i euroområdet att stärkas. Redan i dag finns ett antal frågor där euroländerna själva fattar beslut, bl.a. sanktioner i stabilitets- och tillväxtpakten, växelkurspolitik och tekniska frågor som rör euromynten. Genom det nya konstitutionella fördraget kommer euroländerna att kunna samordna sin ekonomiska politik på ett mer formellt sätt. Artikel III-194 i det konstitutionella fördraget fastställer att euroländerna ska utarbeta riktlinjerna för den ekonomiska politiken och se till att dessa överensstämmer med de riktlinjer som har antagits för hela unionen. Det finns enligt regeringens bedömning skäl för euroländerna att på olika sätt säkerställa ett väl fungerande beslutsfattande i euroområdet.”
***
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).
PROVISIONS SPECIFIC TO MEMBER STATES WHOSE CURRENCY IS THE EURO
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
Article 115 A TFEU (ToL)
1. In order to ensure the proper functioning of economic and monetary union, and in accordance with the relevant provisions of the Treaties, the Council shall, in accordance with the relevant procedure from among those referred to in Articles 99 and 104, with the exception of the procedure set out in Article 104(14), adopt measures specific to those Member States whose currency is the euro:
(a) to strengthen the coordination and surveillance of their budgetary discipline;
(b) to set out economic policy guidelines for them, while ensuring that they are compatible with those adopted for the whole of the Union and are kept under surveillance.
2. For those measures set out in paragraph 1, only members of the Council representing Member States whose currency is the euro shall take part in the vote.
A qualified majority of the said members shall be defined in accordance with Article 205(3)(a).
***
Renumbering
The TFEU table of equivalences confirms that Article 115a TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 136 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 136 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 136 TFEU
1. In order to ensure the proper functioning of economic and monetary union, and in accordance with the relevant provisions of the Treaties, the Council shall, in accordance with the relevant procedure from among those referred to in Articles 121 and 126, with the exception of the procedure set out in Article 126(14), adopt measures specific to those Member States whose currency is the euro:
(a) to strengthen the coordination and surveillance of their budgetary discipline;
(b) to set out economic policy guidelines for them, while ensuring that they are compatible with those adopted for the whole of the Union and are kept under surveillance.
2. For those measures set out in paragraph 1, only members of the Council representing Member States whose currency is the euro shall take part in the vote.
A qualified majority of the said members shall be defined in accordance with Article 238(3)(a).
***
Sweden
The ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008), on page 183, mentions the Lisbon Treaty’s euro group arrangements in terms almost identical with the ones used concerning the Constitutional Treaty:
”Euroområdet
Genom Lissabonfördraget kommer beslutsfattandet i euroområdet att stärkas. Redan i dag finns ett antal frågor där euroländerna själva fattar beslut, bl.a. sanktioner i stabilitets- och tillväxtpakten, växelkurspolitik och tekniska frågor som rör euromynten. Genom Lissabonfördraget kommer euroländerna att kunna samordna sin ekonomiska politik på ett mer formellt sätt. Det fastställs att euroländerna ska stärka samordningen och övervakningen av dessa staters budgetdisciplin, utarbeta riktlinjerna för den ekonomiska politiken och se till att dessa överensstämmer med de riktlinjer som har antagits för hela unionen samt se till att de övervakas (artikel 115a i EUF-fördraget). Det finns, enligt regeringens bedömning, skäl för euroländerna att på olika sätt säkerställa ett väl fungerande beslutsfattande i euroområdet. ”
***
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).
***
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 136 TFEU (on page 13):
“New. Power to adopt measures by QMV on budgetary discipline and economic policy guidelines for Member States whose currency is the euro.”
***
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.”
***
Widipedia
With regard to the euro area generally, the Wikipedia article Eurozone offers an introduction to the single currency and a number of links (last update 7 November 2008):
http://en.wikipedia.org/wiki/Eurozone
Ralf Grahn
Tuesday, 11 November 2008
Introduction: EU Public Procurement Directive
By way of introduction, we continue our presentation of the recitals of the EU Public Procurement Directive 2004/18/EC, which describe the main characteristics of the detailed provisions.
***
Complex projects
Recital 31 introduces a specific procedure for particularly complex projects:
(31) Contracting authorities which carry out particularly complex projects may, without this being due to any fault on their part, find it objectively impossible to define the means of satisfying their needs or of assessing what the market can offer in the way of technical solutions and/or financial/legal solutions. This situation may arise in particular with the implementation of important integrated transport infrastructure projects, large computer networks or projects involving complex and structured financing the financial and legal make-up of which cannot be defined in advance. To the extent that use of open or restricted procedures does not allow the award of such contracts, a flexible procedure should be provided which preserves not only competition between economic operators but also the need for the contracting authorities to discuss all aspects of the contract with each candidate. However, this procedure must not be used in such a way as to restrict or distort competition, particularly by altering any fundamental aspects of the offers, or by imposing substantial new requirements on the successful tenderer, or by involving any tenderer other than the one selected as the most economically advantageous.
***
Small and medium-sized enterprises
Subcontracting is seen as an opportunity for small and medium-sized undertakings (enterprises):
(32) In order to encourage the involvement of small and medium-sized undertakings in the public contracts procurement market, it is advisable to include provisions on subcontracting.
***
Contract notice and social objectives
A number of social objectives are allowed, if they are indicated in the contract notice or the contract documents:
(33) Contract performance conditions are compatible with this Directive provided that they are not directly or indirectly discriminatory and are indicated in the contract notice or in the contract documents. They may, in particular, be intended to favour on-site vocational training, the employment of people experiencing particular difficulty in achieving integration, the fight against unemployment or the protection of the environment. For instance, mention may be made, amongst other things, of the requirements — applicable during performance of the contract — to recruit long-term job-seekers or to implement training measures for the unemployed or young persons, to comply in substance with the provisions of the basic International Labour Organisation (ILO) Conventions, assuming that such provisions have not been implemented in national law, and to recruit more handicapped persons than are required under national legislation.
***
Labour law
Local labour law applies to public contracts, if it complies with Community law. In cross-border situations, the Posted Workers Directive 96/71/EC lays down the minimum conditions:
(34) The laws, regulations and collective agreements, at both national and Community level, which are in force in the areas of employment conditions and safety at work apply during performance of a public contract, providing that such rules, and their application, comply with Community law. In cross-border situations, where workers from one Member State provide services in another Member State for the purpose of performing a public contract, Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services (1) lays down the minimum conditions which must be observed by the host country in respect of such posted workers. If national law contains provisions to this effect, non-compliance with those obligations may be considered to be grave misconduct or an offence concerning the professional conduct of the economic operator concerned, liable to lead to the exclusion of that economic operator from the procedure for the award of a public contract.
(1) OJ 21.1.1997 L 18/1.
***
E-procurement
Recital 35 again stresses the importance of e-procurement:
(35) In view of new developments in information and communications technology, and the simplifications these can bring in terms of publicising contracts and the efficiency and transparency of procurement processes, electronic means should be put on a par with traditional means of communication and information exchange. As far as possible, the means and technology chosen should be compatible with the technologies used in other Member States.
***
Community-wide advertising and the Common Procurement Vocabulary (CPV)
Recital 36 of the Procurement Directive 2004/18/EC refers to Community-wide advertising of contract notices:
(36) To ensure development of effective competition in the field of public contracts, it is necessary that contract notices drawn up by the contracting authorities of Member States be advertised throughout the Community. The information contained in these notices must enable economic operators in the Community to determine whether the proposed contracts are of interest to them. For this purpose, it is appropriate to give them adequate information on the object of the contract and the conditions attached thereto. Improved visibility should therefore be ensured for public notices by means of appropriate instruments, such as standard contract notice forms and the Common Procurement Vocabulary (CPV) provided for in Regulation (EC) No 2195/2002 of the European Parliament and of the Council (2) as the reference nomenclature for public contracts. In restricted procedures, advertisement is, more particularly, intended to enable contractors of Member States to express their interest in contracts by seeking from the contracting authorities invitations to tender under the required conditions.
(2) OJ 16.12.2002 L 340/1.
The new CPV: See Commission Regulation (EC) No 213/2008 of 28 November 2007 amending Regulation (EC) No 2195/2002 of the European Parliament and of the Council on the Common Procurement Vocabulary (CPV) and Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards the revision of the CPV (Text with EEA relevance)
***
Electronic signatures
Additional requirements are indicated for electronic signatures concerning public procurement:
(37) Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures (3) and Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the internal market (‘Directive on electronic commerce’) (4) should, in the context of this Directive, apply to the transmission of information by electronic means. The public procurement procedures and the rules applicable to service contests require a level of security and confidentiality higher than that required by these Directives. Accordingly, the devices for the electronic receipt of offers, requests to participate and plans and projects should comply with specific additional requirements. To this end, use of electronic signatures, in particular advanced electronic signatures, should, as far as possible, be encouraged. Moreover, the existence of voluntary accreditation schemes could constitute a favourable framework for enhancing the level of certification service provision for these devices.
(3) OJ 19.1.2000 L 13/12.
(4) OJ 17.7.2000 L 178/1.
***
Shorter times for notices
When electronic means are used, the times for notices can be shortened:
(38) The use of electronic means leads to savings in time. As a result, provision should be made for reducing the minimum periods where electronic means are used, subject, however, to the condition that they are compatible with the specific mode of transmission envisaged at Community level.
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
The Directives and Regulations mentioned in the footnotes have not necessarily been checked for amendments.
Ralf Grahn
***
Complex projects
Recital 31 introduces a specific procedure for particularly complex projects:
(31) Contracting authorities which carry out particularly complex projects may, without this being due to any fault on their part, find it objectively impossible to define the means of satisfying their needs or of assessing what the market can offer in the way of technical solutions and/or financial/legal solutions. This situation may arise in particular with the implementation of important integrated transport infrastructure projects, large computer networks or projects involving complex and structured financing the financial and legal make-up of which cannot be defined in advance. To the extent that use of open or restricted procedures does not allow the award of such contracts, a flexible procedure should be provided which preserves not only competition between economic operators but also the need for the contracting authorities to discuss all aspects of the contract with each candidate. However, this procedure must not be used in such a way as to restrict or distort competition, particularly by altering any fundamental aspects of the offers, or by imposing substantial new requirements on the successful tenderer, or by involving any tenderer other than the one selected as the most economically advantageous.
***
Small and medium-sized enterprises
Subcontracting is seen as an opportunity for small and medium-sized undertakings (enterprises):
(32) In order to encourage the involvement of small and medium-sized undertakings in the public contracts procurement market, it is advisable to include provisions on subcontracting.
***
Contract notice and social objectives
A number of social objectives are allowed, if they are indicated in the contract notice or the contract documents:
(33) Contract performance conditions are compatible with this Directive provided that they are not directly or indirectly discriminatory and are indicated in the contract notice or in the contract documents. They may, in particular, be intended to favour on-site vocational training, the employment of people experiencing particular difficulty in achieving integration, the fight against unemployment or the protection of the environment. For instance, mention may be made, amongst other things, of the requirements — applicable during performance of the contract — to recruit long-term job-seekers or to implement training measures for the unemployed or young persons, to comply in substance with the provisions of the basic International Labour Organisation (ILO) Conventions, assuming that such provisions have not been implemented in national law, and to recruit more handicapped persons than are required under national legislation.
***
Labour law
Local labour law applies to public contracts, if it complies with Community law. In cross-border situations, the Posted Workers Directive 96/71/EC lays down the minimum conditions:
(34) The laws, regulations and collective agreements, at both national and Community level, which are in force in the areas of employment conditions and safety at work apply during performance of a public contract, providing that such rules, and their application, comply with Community law. In cross-border situations, where workers from one Member State provide services in another Member State for the purpose of performing a public contract, Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services (1) lays down the minimum conditions which must be observed by the host country in respect of such posted workers. If national law contains provisions to this effect, non-compliance with those obligations may be considered to be grave misconduct or an offence concerning the professional conduct of the economic operator concerned, liable to lead to the exclusion of that economic operator from the procedure for the award of a public contract.
(1) OJ 21.1.1997 L 18/1.
***
E-procurement
Recital 35 again stresses the importance of e-procurement:
(35) In view of new developments in information and communications technology, and the simplifications these can bring in terms of publicising contracts and the efficiency and transparency of procurement processes, electronic means should be put on a par with traditional means of communication and information exchange. As far as possible, the means and technology chosen should be compatible with the technologies used in other Member States.
***
Community-wide advertising and the Common Procurement Vocabulary (CPV)
Recital 36 of the Procurement Directive 2004/18/EC refers to Community-wide advertising of contract notices:
(36) To ensure development of effective competition in the field of public contracts, it is necessary that contract notices drawn up by the contracting authorities of Member States be advertised throughout the Community. The information contained in these notices must enable economic operators in the Community to determine whether the proposed contracts are of interest to them. For this purpose, it is appropriate to give them adequate information on the object of the contract and the conditions attached thereto. Improved visibility should therefore be ensured for public notices by means of appropriate instruments, such as standard contract notice forms and the Common Procurement Vocabulary (CPV) provided for in Regulation (EC) No 2195/2002 of the European Parliament and of the Council (2) as the reference nomenclature for public contracts. In restricted procedures, advertisement is, more particularly, intended to enable contractors of Member States to express their interest in contracts by seeking from the contracting authorities invitations to tender under the required conditions.
(2) OJ 16.12.2002 L 340/1.
The new CPV: See Commission Regulation (EC) No 213/2008 of 28 November 2007 amending Regulation (EC) No 2195/2002 of the European Parliament and of the Council on the Common Procurement Vocabulary (CPV) and Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards the revision of the CPV (Text with EEA relevance)
***
Electronic signatures
Additional requirements are indicated for electronic signatures concerning public procurement:
(37) Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures (3) and Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the internal market (‘Directive on electronic commerce’) (4) should, in the context of this Directive, apply to the transmission of information by electronic means. The public procurement procedures and the rules applicable to service contests require a level of security and confidentiality higher than that required by these Directives. Accordingly, the devices for the electronic receipt of offers, requests to participate and plans and projects should comply with specific additional requirements. To this end, use of electronic signatures, in particular advanced electronic signatures, should, as far as possible, be encouraged. Moreover, the existence of voluntary accreditation schemes could constitute a favourable framework for enhancing the level of certification service provision for these devices.
(3) OJ 19.1.2000 L 13/12.
(4) OJ 17.7.2000 L 178/1.
***
Shorter times for notices
When electronic means are used, the times for notices can be shortened:
(38) The use of electronic means leads to savings in time. As a result, provision should be made for reducing the minimum periods where electronic means are used, subject, however, to the condition that they are compatible with the specific mode of transmission envisaged at Community level.
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
The Directives and Regulations mentioned in the footnotes have not necessarily been checked for amendments.
Ralf Grahn
EMU: Requesting Commission proposals
The Commission’s right (monopoly) of initiative is a central principle in the European Community (EC). Certain matters within economic and monetary union (EMU) offer not only the Council, but individual member states, the opportunity to request proposals or recommendations.
***
Current treaty
Article 115 (ex Article 109d) of the Treaty establishing the European Community (TEC) authorises not only the Council (Ecofin), but also a member state to request the Commission to make a recommendation or a proposal.
Here is the text of Article 115 TEC, from the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/93:
Article 115 TEC
For matters within the scope of Articles 99(4), 104 with the exception of paragraph 14, 111, 121, 122 and 123(4) and (5), the Council or a Member State may request the Commission to make a recommendation or a proposal, as appropriate. The Commission shall examine this request and submit its conclusions to the Council without delay.
***
Original Lisbon Treaty
In Article 2, point 99, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) amended Article 114 and in point 100 it inserted a new Chapter 3a Provisions specific to member states whose currency is the euro (OJ 17.12.2007 C 306/75).
This means that there were no specific amendments made to Article 115 TEC.
***
Renumbering
The TFEU table of equivalences confirms that Article 115 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 135 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 135 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 3 Institutional provisions
Article 135 TFEU
(ex Article 115 TEC)
For matters within the scope of Articles 121(4), 126 with the exception of paragraph 14, 138, 140(1), 140(2), first subparagraph, 140(3) and 219, the Council or a Member State may request the Commission to make a recommendation or a proposal, as appropriate. The Commission shall examine this request and submit its conclusions to the Council without delay.
***
Commission proposals
The provision under study brings us into contact with the intricate so called institutional balance of the European Community. Normally, decisions under the TEC are made on proposals by the Commission. This power (monopoly) of initiative is tempered slightly by Article 208 TEC, which gives the Council the right to request the Commission to undertake any studies the Council considers desirable for the attainment of common objectives, and to submit to it any appropriate proposals.
Article 115 TEC makes one more chink in the armour of the Commission, by extending the power to request proposals or recommendations to each member state for matters within the scope of the Articles mentioned.
A request does not mean that the Commission has to make a proposal or recommendation, but it leads to an obligation to act. The Commission has a duty to examine the request and submit its conclusions to the Council without delay.
***
Scope
The matters subject to a request by a member state are the following:
Article 99(4) TEC: Recommendation concerning a member state whose policies are inconsistent with the broad economic policy guidelines or risk jeopardising the proper functioning of economic and monetary union (EMU).
Article 104 TEC with the exception of paragraph 14: Concerns the excessive deficit procedure.
Article 111 TEC on exchange-rate systems.
Article 121 TEC regarding convergence reports.
Article 122 TEC on the abrogation of derogations from the single currency.
Article 123(4) and (5) TEC on euro conversion rates and euro introduction.
***
Common concern
With a single currency, the euro, decentralised economic and fiscal policies become matters of ‘common concern’ even without Article 99(1) TEC saying so.
Article 115 TEC at least offers each member state the opportunity to voice its concern officially.
The present financial turmoil and the severe economic downturn already strain the euro and many core European Community policies severely, when countries with the largest government deficits expand them further, (proposals for) protectionistic measures come in all shapes and sizes, and national administrations try to cope with cross-border problems affecting their neighbours.
Ralf Grahn
***
Current treaty
Article 115 (ex Article 109d) of the Treaty establishing the European Community (TEC) authorises not only the Council (Ecofin), but also a member state to request the Commission to make a recommendation or a proposal.
Here is the text of Article 115 TEC, from the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/93:
Article 115 TEC
For matters within the scope of Articles 99(4), 104 with the exception of paragraph 14, 111, 121, 122 and 123(4) and (5), the Council or a Member State may request the Commission to make a recommendation or a proposal, as appropriate. The Commission shall examine this request and submit its conclusions to the Council without delay.
***
Original Lisbon Treaty
In Article 2, point 99, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) amended Article 114 and in point 100 it inserted a new Chapter 3a Provisions specific to member states whose currency is the euro (OJ 17.12.2007 C 306/75).
This means that there were no specific amendments made to Article 115 TEC.
***
Renumbering
The TFEU table of equivalences confirms that Article 115 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 135 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 135 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 3 Institutional provisions
Article 135 TFEU
(ex Article 115 TEC)
For matters within the scope of Articles 121(4), 126 with the exception of paragraph 14, 138, 140(1), 140(2), first subparagraph, 140(3) and 219, the Council or a Member State may request the Commission to make a recommendation or a proposal, as appropriate. The Commission shall examine this request and submit its conclusions to the Council without delay.
***
Commission proposals
The provision under study brings us into contact with the intricate so called institutional balance of the European Community. Normally, decisions under the TEC are made on proposals by the Commission. This power (monopoly) of initiative is tempered slightly by Article 208 TEC, which gives the Council the right to request the Commission to undertake any studies the Council considers desirable for the attainment of common objectives, and to submit to it any appropriate proposals.
Article 115 TEC makes one more chink in the armour of the Commission, by extending the power to request proposals or recommendations to each member state for matters within the scope of the Articles mentioned.
A request does not mean that the Commission has to make a proposal or recommendation, but it leads to an obligation to act. The Commission has a duty to examine the request and submit its conclusions to the Council without delay.
***
Scope
The matters subject to a request by a member state are the following:
Article 99(4) TEC: Recommendation concerning a member state whose policies are inconsistent with the broad economic policy guidelines or risk jeopardising the proper functioning of economic and monetary union (EMU).
Article 104 TEC with the exception of paragraph 14: Concerns the excessive deficit procedure.
Article 111 TEC on exchange-rate systems.
Article 121 TEC regarding convergence reports.
Article 122 TEC on the abrogation of derogations from the single currency.
Article 123(4) and (5) TEC on euro conversion rates and euro introduction.
***
Common concern
With a single currency, the euro, decentralised economic and fiscal policies become matters of ‘common concern’ even without Article 99(1) TEC saying so.
Article 115 TEC at least offers each member state the opportunity to voice its concern officially.
The present financial turmoil and the severe economic downturn already strain the euro and many core European Community policies severely, when countries with the largest government deficits expand them further, (proposals for) protectionistic measures come in all shapes and sizes, and national administrations try to cope with cross-border problems affecting their neighbours.
Ralf Grahn
Monday, 10 November 2008
Sweden: Lisbon Treaty ratification
The Swedish Parliament (Sveriges Riksdag) is expected to decide on ratification of the EU Treaty of Lisbon on 20 November 2008. Sweden is going to take over the Council Presidency in July 2009.
The ratification decision of the Czech Republic is expected even later, after the target date and the beginning of the EU Council Presidency on 1 January 2009.
The ratification instruments have been deposited by 22 member states:
http://www.consilium.europa.eu/cms3_Applications/applications/Accords/details.asp?cmsid=297&id=2007133&lang=EN&doclang=EN
The parliaments of Poland and Germany have given their assent, but the Polish President has obstructed and the German Constitutional Court has still to rule on a number of complaints.
Ireland is in its own category, having rejected the Lisbon Treaty in a June 2008 referendum.
***
The main Swedish documents are the Government’s ratification bill, Proposition 2007/08:168 Lissabonfördraget, and the coming parliamentary committee report (Utrikesutskottets betänkande 2008/09: UU8).
Ralf Grahn
The ratification decision of the Czech Republic is expected even later, after the target date and the beginning of the EU Council Presidency on 1 January 2009.
The ratification instruments have been deposited by 22 member states:
http://www.consilium.europa.eu/cms3_Applications/applications/Accords/details.asp?cmsid=297&id=2007133&lang=EN&doclang=EN
The parliaments of Poland and Germany have given their assent, but the Polish President has obstructed and the German Constitutional Court has still to rule on a number of complaints.
Ireland is in its own category, having rejected the Lisbon Treaty in a June 2008 referendum.
***
The main Swedish documents are the Government’s ratification bill, Proposition 2007/08:168 Lissabonfördraget, and the coming parliamentary committee report (Utrikesutskottets betänkande 2008/09: UU8).
Ralf Grahn
EU Public Procurement Directive introduction
The EU Public Procurement Directive 2004/18/EC recitals present the main features of the Directive. We continue our introductory overview.
***
RTD exemption
Research and technological development is exempt from the Procurement Directive’s scope of application, on certain conditions, as stated in the twenty third recital:
(23) Pursuant to Article 163 of the Treaty, the encouragement of research and technological development is a means of strengthening the scientific and technological basis of Community industry, and the opening-up of public service contracts contributes to this end. This Directive should not cover the cofinancing of research and development programmes: research and development contracts other than those where the benefits accrue exclusively to the contracting authority for its use in the conduct of its own affairs, on condition that the service provided is wholly remunerated by the contracting authority, are not therefore covered by this Directive.
***
Immovable property exemption
Another area seen as unsuited to normal procurement rules is the acquisition and rental of immovable property:
(24) In the context of services, contracts for the acquisition or rental of immovable property or rights to such property have particular characteristics which make the application of public procurement rules inappropriate.
***
Cultural exception
Public service contracts for original broadcasting programmes are an exception to the rule on normal procurement rules:
(25) The awarding of public contracts for certain audiovisual services in the field of broadcasting should allow aspects of cultural or social significance to be taken into account which render application of procurement rules inappropriate. For these reasons, an exception must therefore be made for public service contracts for the purchase, development, production or co-production of off- the-shelf programmes and other preparatory services, such as those relating to scripts or artistic performances necessary for the production of the programme and contracts concerning broadcasting times. However, this exclusion should not apply to the supply of technical equipment necessary for the production, coproduction and broadcasting of such programmes. A broadcast should be defined as transmission and distribution using any form of electronic network.
***
Arbitration an conciliation exception
Arbitration and conciliation services fall outside the scope of procurement rules:
(26) Arbitration and conciliation services are usually provided by bodies or individuals designated or selected in a manner which cannot be governed by procurement rules.
***
Securities and financial instruments excluded
Contacts relating to securities and other financial instruments are excluded:
(27) In accordance with the Agreement, the financial services covered by this Directive do not include instruments of monetary policy, exchange rates, public debt, reserve management or other policies involving transactions in securities or other financial instruments, in particular transactions by the contracting authorities to raise money or capital. Accordingly, contracts relating to the issue, purchase, sale or transfer of securities or other financial instruments are not covered. Central bank services are also excluded.
***
Sheltering sheltered work
Sheltered workshops and sheltered employment programmes can be sheltered from the market rigours brought by competitive tendering:
(28) Employment and occupation are key elements in guaranteeing equal opportunities for all and contribute to integration in society. In this context, sheltered workshops and sheltered employment programmes contribute efficiently towards the integration or reintegration of people with disabilities in the labour market. However, such workshops might not be able to obtain contracts under normal conditions of competition. Consequently, it is appropriate to provide that Member States may reserve the right to participate in award procedures for public contracts to such workshops or reserve performance of contracts to the context of sheltered employment programmes.
***
Functional criteria
Functional performance and criteria are stressed in order to open up competition:
(29) The technical specifications drawn up by public purchasers need to allow public procurement to be opened up to competition. To this end, it must be possible to submit tenders which reflect the diversity of technical solutions. Accordingly, it must be possible to draw up the technical specifications in terms of functional performance and requirements, and, where reference is made to the European standard or, in the absence thereof, to the national standard, tenders based on equivalent arrangements must be considered by contracting authorities. To demonstrate equivalence, tenderers should be permitted to use any form of evidence. Contracting authorities must be able to provide a reason for any decision that equivalence does not exist in a given case. Contracting authorities that wish to define environmental requirements for the technical specifications of a given contract may lay down the environmental characteristics, such as a given production method, and/or specific environmental effects of product groups or services. They can use, but are not obliged to use appropriate specifications that are defined in eco-labels, such as the European Eco-label, (multi-)national eco-labels or any other eco-label providing the requirements for the label are drawn up and adopted on the basis of scientific information using a procedure in which stakeholders, such as government bodies, consumers, manufacturers, distributors and environmental organisations can participate, and providing the label is accessible and available to all interested parties. Contracting authorities should, whenever possible, lay down technical specifications so as to take into account accessibility criteria for people with disabilities or design for all users. The technical specifications should be clearly indicated, so that all tenderers know what the requirements established by the contracting authority cover.
***
Additional information
Recital 30 concerns the availability of additional contract information:
(30) Additional information concerning contracts must, as is customary in Member States, be given in the contract documents for each contract or else in an equivalent document.
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
***
RTD exemption
Research and technological development is exempt from the Procurement Directive’s scope of application, on certain conditions, as stated in the twenty third recital:
(23) Pursuant to Article 163 of the Treaty, the encouragement of research and technological development is a means of strengthening the scientific and technological basis of Community industry, and the opening-up of public service contracts contributes to this end. This Directive should not cover the cofinancing of research and development programmes: research and development contracts other than those where the benefits accrue exclusively to the contracting authority for its use in the conduct of its own affairs, on condition that the service provided is wholly remunerated by the contracting authority, are not therefore covered by this Directive.
***
Immovable property exemption
Another area seen as unsuited to normal procurement rules is the acquisition and rental of immovable property:
(24) In the context of services, contracts for the acquisition or rental of immovable property or rights to such property have particular characteristics which make the application of public procurement rules inappropriate.
***
Cultural exception
Public service contracts for original broadcasting programmes are an exception to the rule on normal procurement rules:
(25) The awarding of public contracts for certain audiovisual services in the field of broadcasting should allow aspects of cultural or social significance to be taken into account which render application of procurement rules inappropriate. For these reasons, an exception must therefore be made for public service contracts for the purchase, development, production or co-production of off- the-shelf programmes and other preparatory services, such as those relating to scripts or artistic performances necessary for the production of the programme and contracts concerning broadcasting times. However, this exclusion should not apply to the supply of technical equipment necessary for the production, coproduction and broadcasting of such programmes. A broadcast should be defined as transmission and distribution using any form of electronic network.
***
Arbitration an conciliation exception
Arbitration and conciliation services fall outside the scope of procurement rules:
(26) Arbitration and conciliation services are usually provided by bodies or individuals designated or selected in a manner which cannot be governed by procurement rules.
***
Securities and financial instruments excluded
Contacts relating to securities and other financial instruments are excluded:
(27) In accordance with the Agreement, the financial services covered by this Directive do not include instruments of monetary policy, exchange rates, public debt, reserve management or other policies involving transactions in securities or other financial instruments, in particular transactions by the contracting authorities to raise money or capital. Accordingly, contracts relating to the issue, purchase, sale or transfer of securities or other financial instruments are not covered. Central bank services are also excluded.
***
Sheltering sheltered work
Sheltered workshops and sheltered employment programmes can be sheltered from the market rigours brought by competitive tendering:
(28) Employment and occupation are key elements in guaranteeing equal opportunities for all and contribute to integration in society. In this context, sheltered workshops and sheltered employment programmes contribute efficiently towards the integration or reintegration of people with disabilities in the labour market. However, such workshops might not be able to obtain contracts under normal conditions of competition. Consequently, it is appropriate to provide that Member States may reserve the right to participate in award procedures for public contracts to such workshops or reserve performance of contracts to the context of sheltered employment programmes.
***
Functional criteria
Functional performance and criteria are stressed in order to open up competition:
(29) The technical specifications drawn up by public purchasers need to allow public procurement to be opened up to competition. To this end, it must be possible to submit tenders which reflect the diversity of technical solutions. Accordingly, it must be possible to draw up the technical specifications in terms of functional performance and requirements, and, where reference is made to the European standard or, in the absence thereof, to the national standard, tenders based on equivalent arrangements must be considered by contracting authorities. To demonstrate equivalence, tenderers should be permitted to use any form of evidence. Contracting authorities must be able to provide a reason for any decision that equivalence does not exist in a given case. Contracting authorities that wish to define environmental requirements for the technical specifications of a given contract may lay down the environmental characteristics, such as a given production method, and/or specific environmental effects of product groups or services. They can use, but are not obliged to use appropriate specifications that are defined in eco-labels, such as the European Eco-label, (multi-)national eco-labels or any other eco-label providing the requirements for the label are drawn up and adopted on the basis of scientific information using a procedure in which stakeholders, such as government bodies, consumers, manufacturers, distributors and environmental organisations can participate, and providing the label is accessible and available to all interested parties. Contracting authorities should, whenever possible, lay down technical specifications so as to take into account accessibility criteria for people with disabilities or design for all users. The technical specifications should be clearly indicated, so that all tenderers know what the requirements established by the contracting authority cover.
***
Additional information
Recital 30 concerns the availability of additional contract information:
(30) Additional information concerning contracts must, as is customary in Member States, be given in the contract documents for each contract or else in an equivalent document.
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
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).
***
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.
***
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.
***
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.
***
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.)
***
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.
***
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
***
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.
***
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.
***
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.
***
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.)
***
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.
***
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
Saturday, 8 November 2008
Grahnlaw: Virtual EU law library
Looking back at more than 600 posts since April 2007, I imagine that Grahnlaw has grown into a small virtual library of EU law and politics.
Educational purpose
In the beginning, I looked at the United States Constitution, the European Court of Human Rights and at deciding moments in the history of European integration. Later, current EU politics and the Reform Treaty of the European Union became the main themes.
When the Council decided not to publish a readable, consolidated version of the Treaty of Lisbon, I started looking for ‘private’ consolidations of and materials on the new treaties, as well as campaigning for the publication of official consolidated versions in all the EU treaty languages.
I also began to present my own consolidated treaty texts, Article by Article. The Treaty on European Union (TEU) has been treated (more or less in full). Even if the Council belatedly decided to publish the new treaties consolidated, there are by now blog posts on more than a third of the Articles of the Treaty on the Functioning of the European Union (TFEU). The current policy area of this ongoing project is monetary policy with the European Central Bank. Universities and governments seem to be well represented among the readership.
The treaty posts have been interspersed with discussion about EU politics, especially questions about democratic legitimacy and accountability. The negative result in the Irish referendum led to long exchanges about the future of the European Union. There have been a number of posts on the parliamentary ratification processes in member states, but the Lisbon Treaty saga is still unfinished.
***
Business interests
New themes have appeared, below the treaty level. Exploration of the practical side of the European Union (European Community) has started. I have noticed that the internal market (single market) including public procurement and competition including state aid, as well as enterprise policies (SMEs), are of interest to businesses, governments and other legal practitioners within and outside the European Economic Area (EEA).
In addition to occasional posts on various subjects, my aim is to advance through the Procurement Directive 2004/18/EC from start to finish.
***
I have noticed that many readers arrive as a result of web searches, but sometimes the tail is too long. The search engine may have suggested an outdated entry, even when there are several newer and more relevant posts on the subject. At times, using the search options within the blog or looking at the contents or headlines of newer posts might lead to fresher information.
This virtual EU library appreciates comments, as well as hints about books and publications on EU law and politics. I have added a number of blogs and web sites to my blog roll, but suggestions are welcome.
Even if Grahnlaw in English is a fairly new venture, writing about EU law and politics has been a passion of mine for a number of years. Some of my earlier contributions on EU themes can still be found in Swedish and Finnish on various forums and my other blogs.
***
As a writer and ‘librarian’, I can hope to educate my readers, but I certainly educate myself.
Ralf Grahn
Educational purpose
In the beginning, I looked at the United States Constitution, the European Court of Human Rights and at deciding moments in the history of European integration. Later, current EU politics and the Reform Treaty of the European Union became the main themes.
When the Council decided not to publish a readable, consolidated version of the Treaty of Lisbon, I started looking for ‘private’ consolidations of and materials on the new treaties, as well as campaigning for the publication of official consolidated versions in all the EU treaty languages.
I also began to present my own consolidated treaty texts, Article by Article. The Treaty on European Union (TEU) has been treated (more or less in full). Even if the Council belatedly decided to publish the new treaties consolidated, there are by now blog posts on more than a third of the Articles of the Treaty on the Functioning of the European Union (TFEU). The current policy area of this ongoing project is monetary policy with the European Central Bank. Universities and governments seem to be well represented among the readership.
The treaty posts have been interspersed with discussion about EU politics, especially questions about democratic legitimacy and accountability. The negative result in the Irish referendum led to long exchanges about the future of the European Union. There have been a number of posts on the parliamentary ratification processes in member states, but the Lisbon Treaty saga is still unfinished.
***
Business interests
New themes have appeared, below the treaty level. Exploration of the practical side of the European Union (European Community) has started. I have noticed that the internal market (single market) including public procurement and competition including state aid, as well as enterprise policies (SMEs), are of interest to businesses, governments and other legal practitioners within and outside the European Economic Area (EEA).
In addition to occasional posts on various subjects, my aim is to advance through the Procurement Directive 2004/18/EC from start to finish.
***
I have noticed that many readers arrive as a result of web searches, but sometimes the tail is too long. The search engine may have suggested an outdated entry, even when there are several newer and more relevant posts on the subject. At times, using the search options within the blog or looking at the contents or headlines of newer posts might lead to fresher information.
This virtual EU library appreciates comments, as well as hints about books and publications on EU law and politics. I have added a number of blogs and web sites to my blog roll, but suggestions are welcome.
Even if Grahnlaw in English is a fairly new venture, writing about EU law and politics has been a passion of mine for a number of years. Some of my earlier contributions on EU themes can still be found in Swedish and Finnish on various forums and my other blogs.
***
As a writer and ‘librarian’, I can hope to educate my readers, but I certainly educate myself.
Ralf Grahn
Friday, 7 November 2008
Finland: No to protectionism - Yes to economic reforms
Ahead of yet another summit of European leaders, the Finnish government has issued a statement on its view on how to reform the international financial system and to overcome the economic downturn.
Protectionism is seen as a wrong turn. Instead, structural economic reforms of the kind envisioned in the Lisbon agenda are perceived as necessary, and the European Union should not let its climate targets slip.
Here is the text of the government’s press release:
Government Communications Unit
7.11.2008 11.16
Meeting of EU Heads of State or Government on financial architecture on 7 November
France, the current holder of the EU Presidency, will organise an unofficial meeting for the EU Heads of State or Government in Brussels on 7 November. Prime Minister Matti Vanhanen will represent Finland at the meeting.
The purpose of the meeting is to prepare the EU’s position for the upcoming international summit taking place in Washington on 15 November which is to discuss the international financing system and regulation of the financial market.
In Finland's view reform of the international financing system should focus on measures that promote the strength and transparency of the financing system. This calls for tighter rules for capital requirements concerning financial institutions as well as such rules that neither aggravate the cyclic tendency of the economy nor encourage excessive risk-taking.
As for financial supervision, European-level cooperation and coordination need to be developed to better acknowledge the fact that an increasing number of financial institutions are cross-border entities. The common European central bank system alone requires that the Euro Group has a good understanding of the risks concerning financial institutions.
Outlining the new financial architecture will take its time. It is important for the EU to act in unison. The EU leaders’ meeting will prepare the French Presidency for the upcoming meeting in Washington. The EU needs to have a clear view of how to organise unified action after the Washington meeting as well.
Development of the financial architecture is best carried out at the International Monetary Fund (IMF). This provides emerging economies with better opportunities to participate in the actions of the IMF.
The financial crisis is not over, but it is important that the economic foundations remain open. The crisis is not an excuse for protectionism. The EU Member States need to continue reforms in accordance with the objectives set by the Lisbon Strategy and keep to the climate targets.
Further information: Riina Nevamäki, Special Adviser on EU Affairs, Prime Minister’s Office, tel. +358 9 160 22055 or +358 40 705 2593
***
There are two memorandums on the substantive questions available on the government’s web site (in Finnish).
Ralf Grahn
Protectionism is seen as a wrong turn. Instead, structural economic reforms of the kind envisioned in the Lisbon agenda are perceived as necessary, and the European Union should not let its climate targets slip.
Here is the text of the government’s press release:
Government Communications Unit
7.11.2008 11.16
Meeting of EU Heads of State or Government on financial architecture on 7 November
France, the current holder of the EU Presidency, will organise an unofficial meeting for the EU Heads of State or Government in Brussels on 7 November. Prime Minister Matti Vanhanen will represent Finland at the meeting.
The purpose of the meeting is to prepare the EU’s position for the upcoming international summit taking place in Washington on 15 November which is to discuss the international financing system and regulation of the financial market.
In Finland's view reform of the international financing system should focus on measures that promote the strength and transparency of the financing system. This calls for tighter rules for capital requirements concerning financial institutions as well as such rules that neither aggravate the cyclic tendency of the economy nor encourage excessive risk-taking.
As for financial supervision, European-level cooperation and coordination need to be developed to better acknowledge the fact that an increasing number of financial institutions are cross-border entities. The common European central bank system alone requires that the Euro Group has a good understanding of the risks concerning financial institutions.
Outlining the new financial architecture will take its time. It is important for the EU to act in unison. The EU leaders’ meeting will prepare the French Presidency for the upcoming meeting in Washington. The EU needs to have a clear view of how to organise unified action after the Washington meeting as well.
Development of the financial architecture is best carried out at the International Monetary Fund (IMF). This provides emerging economies with better opportunities to participate in the actions of the IMF.
The financial crisis is not over, but it is important that the economic foundations remain open. The crisis is not an excuse for protectionism. The EU Member States need to continue reforms in accordance with the objectives set by the Lisbon Strategy and keep to the climate targets.
Further information: Riina Nevamäki, Special Adviser on EU Affairs, Prime Minister’s Office, tel. +358 9 160 22055 or +358 40 705 2593
***
There are two memorandums on the substantive questions available on the government’s web site (in Finnish).
Ralf Grahn
Recitals: EU Public Procurement Directive
The Procurement Directive 2004/18/EC is applicable to public procurement in the 30 states of the European Economic Area (EEA), namely non-EU Iceland, Liechtenstein and Norway, as well as the 27 member states of the European Union (EU).
We pursue (if not happiness, at least) our presentation of the main features of the Procurement Directive, by continuing our look at the Preamble recitals, adding headlines and short descriptions.
***
Central purchasing bodies
The fifteenth recital of the Procurement Directive 2004/18/EC refers to the need to define central purchasing bodies and to ensure the application of the principles of non-discrimination and equal treatment:
(15) Certain centralised purchasing techniques have been developed in Member States. Several contracting authorities are responsible for making acquisitions or awarding public contracts/framework agreements for other contracting authorities. In view of the large volumes purchased, those techniques help increase competition and streamline public purchasing. Provision should therefore be made for a Community definition of central purchasing bodies dedicated to contracting authorities. A definition should also be given of the conditions under which, in accordance with the principles of non-discrimination and equal treatment, contracting authorities purchasing works, supplies and/or services through a central purchasing body may be deemed to have complied with this Directive.
***
National choices
The sixteenth recital of the Procurement Directive indicates that the member states can choose which contracting methods they use:
(16) In order to take account of the different circumstances obtaining in Member States, Member States should be allowed to choose whether contracting authorities may use framework agreements, central purchasing bodies, dynamic purchasing systems, electronic auctions or the competitive dialogue procedure, as defined and regulated by this Directive.
***
Thresholds in euros
Uniform thresholds in euros are seen as most practical, although they have to be in line with and revised according to the changing values of special drawing rights (derived from the treaty and the WTO GPA), as said in the seventeenth recital of the Procurement Directive:
(17) Multiplying the number of thresholds for applying the coordinating provisions complicates matters for contracting authorities. Furthermore, in the context of monetary union such thresholds should be established in euro. Accordingly, thresholds should be set, in euro, in such a way as to simplify the application of such provisions, while at the same time ensuring compliance with the thresholds provided for by the Agreement which are expressed in special drawing rights. In this context, provision should also be made for periodic reviews of the thresholds expressed in euro so as to adjust them, where necessary, in line with possible variations in the value of the euro in relation to the special drawing right.
***
Services
The eighteenth recital of the Procurement Directive indicates the classification of different services:
(18) The field of services is best delineated, for the purpose of applying the procedural rules of this Directive and for monitoring purposes, by subdividing it into categories corresponding to particular headings of a common classification and by bringing them together in two Annexes, II A and II B, according to the regime to which they are subject. As regards services in Annex II B, the relevant provisions of this Directive should be without prejudice to the application of Community rules specific to the services in question.
***
Restricted application to services
Some services are seen as essential to realize the potential for cross-border trade. Other services are, transitionally, exempt from the full application of the Procurement Directive, as stated in the nineteenth recital:
(19) As regards public service contracts, full application of this Directive should be limited, for a transitional period, to contracts where its provisions will permit the full potential for increased cross-frontier trade to be realised. Contracts for other services need to be monitored during this transitional period before a decision is taken on the full application of this Directive. In this respect, the mechanism for such monitoring needs to be defined. This mechanism should, at the same time, enable interested parties to have access to the relevant information.
***
Utilities Directive
The twentieth recital refers to the sister Directive, the so called Utilities Directive 2004/17/EC regarding the water, transport and postal services sectors, but not maritime, coastal or river transport:
(20) Public contracts which are awarded by the contracting authorities operating in the water, energy, transport and postal services sectors and which fall within the scope of those activities are covered by Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (1). However, contracts awarded by the contracting authorities in the context of their service activities for maritime, coastal or river transport must fall within the scope of this Directive.
(1) See OJ 30.4.2004 L 134/1 (and later amendments)
***
Telecommunications exempted
Telecommunications are exempted from the scope of the Procurement Directive, as mentioned in the twenty first recital:
(21) In view of the situation of effective market competition in the telecommunications sector following the implementation of the Community rules aimed at liberalising that sector, public contracts in that area should be excluded from the scope of this Directive insofar as they are intended primarily to allow the contracting authorities to exercise certain activities in the telecommunications sector. Those activities are defined in accordance with the definitions used in Articles 1, 2 and 8 of Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sector (2), such that this Directive does not apply to contracts which have been excluded from the scope of Directive 93/38/EEC pursuant to Article 8 thereof.
(2) OJ 9.8.1993 L 199/84. Directive as last amended by Commission Directive 2001/78/EC (OJ 29.10.2001 L 285/1).
***
State security and secrecy
Exemptions from the application of the Procurement Directive are made for reasons of state security and secrecy, as said in the twenty second recital:
(22) Provision should be made for cases in which it is possible to refrain from applying the measures for coordinating procedures on grounds relating to State security or secrecy, or because specific rules on the awarding of contracts which derive from international agreements, relating to the stationing of troops, or which are specific to international organisations are applicable.
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
We pursue (if not happiness, at least) our presentation of the main features of the Procurement Directive, by continuing our look at the Preamble recitals, adding headlines and short descriptions.
***
Central purchasing bodies
The fifteenth recital of the Procurement Directive 2004/18/EC refers to the need to define central purchasing bodies and to ensure the application of the principles of non-discrimination and equal treatment:
(15) Certain centralised purchasing techniques have been developed in Member States. Several contracting authorities are responsible for making acquisitions or awarding public contracts/framework agreements for other contracting authorities. In view of the large volumes purchased, those techniques help increase competition and streamline public purchasing. Provision should therefore be made for a Community definition of central purchasing bodies dedicated to contracting authorities. A definition should also be given of the conditions under which, in accordance with the principles of non-discrimination and equal treatment, contracting authorities purchasing works, supplies and/or services through a central purchasing body may be deemed to have complied with this Directive.
***
National choices
The sixteenth recital of the Procurement Directive indicates that the member states can choose which contracting methods they use:
(16) In order to take account of the different circumstances obtaining in Member States, Member States should be allowed to choose whether contracting authorities may use framework agreements, central purchasing bodies, dynamic purchasing systems, electronic auctions or the competitive dialogue procedure, as defined and regulated by this Directive.
***
Thresholds in euros
Uniform thresholds in euros are seen as most practical, although they have to be in line with and revised according to the changing values of special drawing rights (derived from the treaty and the WTO GPA), as said in the seventeenth recital of the Procurement Directive:
(17) Multiplying the number of thresholds for applying the coordinating provisions complicates matters for contracting authorities. Furthermore, in the context of monetary union such thresholds should be established in euro. Accordingly, thresholds should be set, in euro, in such a way as to simplify the application of such provisions, while at the same time ensuring compliance with the thresholds provided for by the Agreement which are expressed in special drawing rights. In this context, provision should also be made for periodic reviews of the thresholds expressed in euro so as to adjust them, where necessary, in line with possible variations in the value of the euro in relation to the special drawing right.
***
Services
The eighteenth recital of the Procurement Directive indicates the classification of different services:
(18) The field of services is best delineated, for the purpose of applying the procedural rules of this Directive and for monitoring purposes, by subdividing it into categories corresponding to particular headings of a common classification and by bringing them together in two Annexes, II A and II B, according to the regime to which they are subject. As regards services in Annex II B, the relevant provisions of this Directive should be without prejudice to the application of Community rules specific to the services in question.
***
Restricted application to services
Some services are seen as essential to realize the potential for cross-border trade. Other services are, transitionally, exempt from the full application of the Procurement Directive, as stated in the nineteenth recital:
(19) As regards public service contracts, full application of this Directive should be limited, for a transitional period, to contracts where its provisions will permit the full potential for increased cross-frontier trade to be realised. Contracts for other services need to be monitored during this transitional period before a decision is taken on the full application of this Directive. In this respect, the mechanism for such monitoring needs to be defined. This mechanism should, at the same time, enable interested parties to have access to the relevant information.
***
Utilities Directive
The twentieth recital refers to the sister Directive, the so called Utilities Directive 2004/17/EC regarding the water, transport and postal services sectors, but not maritime, coastal or river transport:
(20) Public contracts which are awarded by the contracting authorities operating in the water, energy, transport and postal services sectors and which fall within the scope of those activities are covered by Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (1). However, contracts awarded by the contracting authorities in the context of their service activities for maritime, coastal or river transport must fall within the scope of this Directive.
(1) See OJ 30.4.2004 L 134/1 (and later amendments)
***
Telecommunications exempted
Telecommunications are exempted from the scope of the Procurement Directive, as mentioned in the twenty first recital:
(21) In view of the situation of effective market competition in the telecommunications sector following the implementation of the Community rules aimed at liberalising that sector, public contracts in that area should be excluded from the scope of this Directive insofar as they are intended primarily to allow the contracting authorities to exercise certain activities in the telecommunications sector. Those activities are defined in accordance with the definitions used in Articles 1, 2 and 8 of Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sector (2), such that this Directive does not apply to contracts which have been excluded from the scope of Directive 93/38/EEC pursuant to Article 8 thereof.
(2) OJ 9.8.1993 L 199/84. Directive as last amended by Commission Directive 2001/78/EC (OJ 29.10.2001 L 285/1).
***
State security and secrecy
Exemptions from the application of the Procurement Directive are made for reasons of state security and secrecy, as said in the twenty second recital:
(22) Provision should be made for cases in which it is possible to refrain from applying the measures for coordinating procedures on grounds relating to State security or secrecy, or because specific rules on the awarding of contracts which derive from international agreements, relating to the stationing of troops, or which are specific to international organisations are applicable.
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
Euro currency legislation
Despite its shortcomings, the EU Treaty of Lisbon has certain advantages. There are a number of so called institutional innovations aimed at improving the way the European Union works. At the same time, the Lisbon Treaty would clear out some deadwood from the existing treaties.
Legislation on the euro currency is a case in point on both aspects.
***
Current treaty
Article 123(4) (of ex Article 109l) of the Treaty establishing the European Community (TEC) sets out the powers of the Council to take the measures necessary to introduce the ecu (now euro) as the single currency.
Here is the text of Article 123(4) TEC, from the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/89:
Article 123(4) TEC
4. At the starting date of the third stage, the Council shall, acting with the unanimity of the Member States without a derogation, on a proposal from the Commission and after consulting the ECB, adopt the conversion rates at which their currencies shall be irrevocably fixed and at which irrevocably fixed rate the ecu shall be substituted for these currencies, and the ecu will become a currency in its own right. This measure shall by itself not modify the external value of the ecu. The Council, acting by a qualified majority of the said Member States, on a proposal from the Commission and after consulting the ECB, shall take the other measures necessary for the rapid introduction of the ecu as the single currency of those Member States. The second sentence of Article 122(5) shall apply.
***
Draft Constitution
After the introduction of the single currency and especially after the euro banknotes and coins started circulating, Article 123(4) TEC became dated.
The European Convention proposed a new Article III-83, which shifted the focus from the introduction to the use of the single currency, updated the name of the currency and introduced the ordinary legislative procedure (OJ 18.7.2003 C 169/43):
Article III-83 Draft Constitution
Without prejudice to the powers of the European Central Bank, a European law or framework law shall lay down the measures necessary for use of the euro as the single currency of the Member States. Such law or framework law shall be adopted after consultation of the European Central Bank.
***
Constitution
The intergovernmental conference (IGC 2004) changed from singular to plural, when it adopted the proposal of the European Convention. In the Constitutional Treaty, the provision became Article III-191 (OJ 16.12.2004 C 310/84):
Article III-191 Constitution
Without prejudice to the powers of the European Central Bank, European laws or framework laws shall lay down the measures necessary for use of the euro as the single currency. Such laws or framework laws shall be adopted after consultation of the European Central Bank.
***
Original Lisbon Treaty
In Article 2, point 97, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) added a new Article 111a (OJ 17.12.2007 C 306/74):
97) The following Article 111a shall be inserted:
‘Article 111a
Without prejudice to the powers of the European Central Bank, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall lay down the measures necessary for the use of the euro as the single currency. Such measures shall be adopted after consultation of the European Central Bank.’.
***
Renumbering
The TFEU table of equivalences confirms that Article 111a TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 133 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 133 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:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 2 Monetary policy
Article 133 TFEU
Without prejudice to the powers of the European Central Bank, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall lay down the measures necessary for the use of the euro as the single currency. Such measures shall be adopted after consultation of the European Central Bank.
***
Instead of temporary Council measures to introduce the single currency, the Lisbon Treaty, in effect, adopts the proposal of the European Convention. The use of the euro currency can be regulated permanently, and although the legal instruments are not named, the ordinary legislative procedure is introduced (co-decision), adding a thin slice of power to the elected European Parliament.
Technically, the treaty is tidied up and it becomes more readable.
Ralf Grahn
Legislation on the euro currency is a case in point on both aspects.
***
Current treaty
Article 123(4) (of ex Article 109l) of the Treaty establishing the European Community (TEC) sets out the powers of the Council to take the measures necessary to introduce the ecu (now euro) as the single currency.
Here is the text of Article 123(4) TEC, from the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/89:
Article 123(4) TEC
4. At the starting date of the third stage, the Council shall, acting with the unanimity of the Member States without a derogation, on a proposal from the Commission and after consulting the ECB, adopt the conversion rates at which their currencies shall be irrevocably fixed and at which irrevocably fixed rate the ecu shall be substituted for these currencies, and the ecu will become a currency in its own right. This measure shall by itself not modify the external value of the ecu. The Council, acting by a qualified majority of the said Member States, on a proposal from the Commission and after consulting the ECB, shall take the other measures necessary for the rapid introduction of the ecu as the single currency of those Member States. The second sentence of Article 122(5) shall apply.
***
Draft Constitution
After the introduction of the single currency and especially after the euro banknotes and coins started circulating, Article 123(4) TEC became dated.
The European Convention proposed a new Article III-83, which shifted the focus from the introduction to the use of the single currency, updated the name of the currency and introduced the ordinary legislative procedure (OJ 18.7.2003 C 169/43):
Article III-83 Draft Constitution
Without prejudice to the powers of the European Central Bank, a European law or framework law shall lay down the measures necessary for use of the euro as the single currency of the Member States. Such law or framework law shall be adopted after consultation of the European Central Bank.
***
Constitution
The intergovernmental conference (IGC 2004) changed from singular to plural, when it adopted the proposal of the European Convention. In the Constitutional Treaty, the provision became Article III-191 (OJ 16.12.2004 C 310/84):
Article III-191 Constitution
Without prejudice to the powers of the European Central Bank, European laws or framework laws shall lay down the measures necessary for use of the euro as the single currency. Such laws or framework laws shall be adopted after consultation of the European Central Bank.
***
Original Lisbon Treaty
In Article 2, point 97, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) added a new Article 111a (OJ 17.12.2007 C 306/74):
97) The following Article 111a shall be inserted:
‘Article 111a
Without prejudice to the powers of the European Central Bank, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall lay down the measures necessary for the use of the euro as the single currency. Such measures shall be adopted after consultation of the European Central Bank.’.
***
Renumbering
The TFEU table of equivalences confirms that Article 111a TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 133 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 133 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:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 2 Monetary policy
Article 133 TFEU
Without prejudice to the powers of the European Central Bank, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall lay down the measures necessary for the use of the euro as the single currency. Such measures shall be adopted after consultation of the European Central Bank.
***
Instead of temporary Council measures to introduce the single currency, the Lisbon Treaty, in effect, adopts the proposal of the European Convention. The use of the euro currency can be regulated permanently, and although the legal instruments are not named, the ordinary legislative procedure is introduced (co-decision), adding a thin slice of power to the elected European Parliament.
Technically, the treaty is tidied up and it becomes more readable.
Ralf Grahn
Thursday, 6 November 2008
EU Public Procurement Directive principles
We continue to look at the context of and the reasons for the EU Procurement Directive 2004/18/EC in the light of the Preamble.
***
WTO Agreement on Government Procurement (GPA)
The Government Procurement Agreement (GPA) was been negotiated alongside the multilateral trade negotiations within the World Trade Organization (WTO), but it is not an agreement binding on all WTO members. It is a plurilateral agreement, in force between the European Community (27 member states), Hong Kong (China), Iceland, Israel, Japan, Korea, Liechtenstein, (the Netherlands with respect to) Aruba, Norway, Singapore, Switzerland and the United States of America.
For more information on the GPA you can go to the WTO web pages, starting with:
http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm
The seventh recital of the Procurement Directive Preamble refers to the WTO GPA, binding on i. a. all members of the European Economic Area (EEA):
(7) Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the Agreements reached in the Uruguay Round multilateral negotiations (1986 to 1994) (1), approved in particular the WTO Agreement on Government Procurement, hereinafter referred to as the ‘Agreement’, the aim of which is to establish a multilateral framework of balanced rights and obligations relating to public contracts with a view to achieving the liberalisation and expansion of world trade.
In view of the international rights and commitments devolving on the Community as a result of the acceptance of the Agreement, the arrangements to be applied to tenderers and products from signatory third countries are those defined by the Agreement. This Agreement does not have direct effect. The contracting authorities covered by the Agreement which comply with this Directive and which apply the latter to economic operators of third countries which are signatories to the Agreement should therefore be in conformity with the Agreement. It is also appropriate that those coordinating provisions should guarantee for Community economic operators conditions for participation in public procurement which are just as favourable as those reserved for economic operators of third countries which are signatories to the Agreement.
(1) The GPA was published in the Official Journal 23.12.1994 L 336/1.
***
Technical dialogue
The eight recital of the Procurement Directive Preamble refers to a technical dialogue preceding a procedure for the award of a contract:
(8) Before launching a procedure for the award of a contract, contracting authorities may, using a technical dialogue, seek or accept advice which may be used in the preparation of the specifications provided, however, that such advice does not have the effect of precluding competition.
***
Separate or joint contracts
Joint or separate contract awards are allowed on certain criteria, as mentioned in the ninth recital of the Procurement Directive Preamble. The possibility to award smaller lots and joint contracts was repeated in the June 2008 Communication, European Code of Best Practices Facilitating Access by SMEs to Public Procurement:
(9) In view of the diversity of public works contracts, contracting authorities should be able to make provision for contracts for the design and execution of work to be awarded either separately or jointly. It is not the intention of this Directive to prescribe either joint or separate contract awards. The decision to award contracts separately or jointly must be determined by qualitative and economic criteria, which may be defined by national law.
***
Public works contract
Public works contracts are defined and delimited in the tenth recital of the Procurement Directive Preamble:
(10) A contract shall be deemed to be a public works contract only if its subject matter specifically covers the execution of activities listed in Annex I, even if the contract covers the provision of other services necessary for the execution of such activities. Public service contracts, in particular in the sphere of property management services, may, in certain circumstances, include works. However, insofar as such works are incidental to the principal subject-matter of the contract, and are a possible consequence thereof or a complement thereto, the fact that such works are included in the contract does not justify the qualification of the contract as a public works contract.
***
Framework agreement
The eleventh recital refers to a Community definition of framework agreements. Generally, these framework agreements should not be concluded for more than four years:
(11) A Community definition of framework agreements, together with specific rules on framework agreements concluded for contracts falling within the scope of this Directive, should be provided. Under these rules, when a contracting authority enters into a framework agreement in accordance with the provisions of this Directive relating, in particular, to advertising, time limits and conditions for the submission of tenders, it may enter into contracts based on such a framework agreement during its term of validity either by applying the terms set forth in the framework agreement or, if all terms have not been fixed in advance in the framework agreement, by reopening competition between the parties to the framework agreement in relation to those terms. The reopening of competition should comply with certain rules the aim of which is to guarantee the required flexibility and to guarantee respect for the general principles, in particular the principle of equal treatment. For the same reasons, the term of the framework agreements should not exceed four years, except in cases duly justified by the contracting authorities.
***
E-procurement
The twelfth recital underlines the benefits of electronic procurement:
(12) Certain new electronic purchasing techniques are continually being developed. Such techniques help to increase competition and streamline public purchasing, particularly in terms of the savings in time and money which their use will allow. Contracting authorities may make use of electronic purchasing techniques, providing such use complies with the rules drawn up under this Directive and the principles of equal treatment, non-discrimination and transparency. To that extent, a tender submitted by a tenderer, in particular where competition has been reopened under a framework agreement or where a dynamic purchasing system is being used, may take the form of that tenderer's electronic catalogue if the latter uses the means of communication chosen by the contracting authority in accordance with Article 42.
***
Electronic purchasing system
The thirteenth recital of the Procurement Directive Preamble announces rules for an electronic dynamic purchasing system, open to all qualified tenderers:
(13) In view of the rapid expansion of electronic purchasing systems, appropriate rules should now be introduced to enable contracting authorities to take full advantage of the possibilities afforded by these systems. Against this background, it is necessary to define a completely electronic dynamic purchasing system for commonly used purchases, and lay down specific rules for setting up and operating such a system in order to ensure the fair treatment of any economic operator who wishes to take part therein. Any economic operator which submits an indicative tender in accordance with the specification and meets the selection criteria should be allowed to join such a system. This purchasing technique allows the contracting authority, through the establishment of a list of tenderers already selected and the opportunity given to new tenderers to take part, to have a particularly broad range of tenders as a result of the electronic facilities available, and hence to ensure optimum use of public funds through broad competition.
***
Electronic auctions
When the object of a contract is quantifiable (figures or percentages), electronic auctions may be used, as indicated in the fourteenth recital of the Procurement Directive Preamble:
(14) Since use of the technique of electronic auctions is likely to increase, such auctions should be given a Community definition and governed by specific rules in order to ensure that they operate in full accordance with the principles of equal treatment, non-discrimination and transparency. To that end, provision should be made for such electronic auctions to deal only with contracts for works, supplies or services for which the specifications can be determined with precision. Such may in particular be the case for recurring supplies, works and service contracts. With the same objective, it must also to be possible to establish the respective ranking of the tenderers at any stage of the electronic auction. Recourse to electronic auctions enables contracting authorities to ask tenderers to submit new prices, revised downwards, and when the contract is awarded to the most economically advantageous tender, also to improve elements of the tenders other than prices. In order to guarantee compliance with the principle of transparency, only the elements suitable for automatic evaluation by electronic means, without any intervention and/or appreciation by the contracting authority, may be the object of electronic auctions, that is, only the elements which are quantifiable so that they can be expressed in figures or percentages. On the other hand, those aspects of the tenders which imply an appreciation of non-quantifiable elements should not be the object of electronic auctions. Consequently, certain works contracts and certain service contracts having as their subject-matter intellectual performances, such as the design of works, should not be the object of electronic auctions.
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
***
WTO Agreement on Government Procurement (GPA)
The Government Procurement Agreement (GPA) was been negotiated alongside the multilateral trade negotiations within the World Trade Organization (WTO), but it is not an agreement binding on all WTO members. It is a plurilateral agreement, in force between the European Community (27 member states), Hong Kong (China), Iceland, Israel, Japan, Korea, Liechtenstein, (the Netherlands with respect to) Aruba, Norway, Singapore, Switzerland and the United States of America.
For more information on the GPA you can go to the WTO web pages, starting with:
http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm
The seventh recital of the Procurement Directive Preamble refers to the WTO GPA, binding on i. a. all members of the European Economic Area (EEA):
(7) Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the Agreements reached in the Uruguay Round multilateral negotiations (1986 to 1994) (1), approved in particular the WTO Agreement on Government Procurement, hereinafter referred to as the ‘Agreement’, the aim of which is to establish a multilateral framework of balanced rights and obligations relating to public contracts with a view to achieving the liberalisation and expansion of world trade.
In view of the international rights and commitments devolving on the Community as a result of the acceptance of the Agreement, the arrangements to be applied to tenderers and products from signatory third countries are those defined by the Agreement. This Agreement does not have direct effect. The contracting authorities covered by the Agreement which comply with this Directive and which apply the latter to economic operators of third countries which are signatories to the Agreement should therefore be in conformity with the Agreement. It is also appropriate that those coordinating provisions should guarantee for Community economic operators conditions for participation in public procurement which are just as favourable as those reserved for economic operators of third countries which are signatories to the Agreement.
(1) The GPA was published in the Official Journal 23.12.1994 L 336/1.
***
Technical dialogue
The eight recital of the Procurement Directive Preamble refers to a technical dialogue preceding a procedure for the award of a contract:
(8) Before launching a procedure for the award of a contract, contracting authorities may, using a technical dialogue, seek or accept advice which may be used in the preparation of the specifications provided, however, that such advice does not have the effect of precluding competition.
***
Separate or joint contracts
Joint or separate contract awards are allowed on certain criteria, as mentioned in the ninth recital of the Procurement Directive Preamble. The possibility to award smaller lots and joint contracts was repeated in the June 2008 Communication, European Code of Best Practices Facilitating Access by SMEs to Public Procurement:
(9) In view of the diversity of public works contracts, contracting authorities should be able to make provision for contracts for the design and execution of work to be awarded either separately or jointly. It is not the intention of this Directive to prescribe either joint or separate contract awards. The decision to award contracts separately or jointly must be determined by qualitative and economic criteria, which may be defined by national law.
***
Public works contract
Public works contracts are defined and delimited in the tenth recital of the Procurement Directive Preamble:
(10) A contract shall be deemed to be a public works contract only if its subject matter specifically covers the execution of activities listed in Annex I, even if the contract covers the provision of other services necessary for the execution of such activities. Public service contracts, in particular in the sphere of property management services, may, in certain circumstances, include works. However, insofar as such works are incidental to the principal subject-matter of the contract, and are a possible consequence thereof or a complement thereto, the fact that such works are included in the contract does not justify the qualification of the contract as a public works contract.
***
Framework agreement
The eleventh recital refers to a Community definition of framework agreements. Generally, these framework agreements should not be concluded for more than four years:
(11) A Community definition of framework agreements, together with specific rules on framework agreements concluded for contracts falling within the scope of this Directive, should be provided. Under these rules, when a contracting authority enters into a framework agreement in accordance with the provisions of this Directive relating, in particular, to advertising, time limits and conditions for the submission of tenders, it may enter into contracts based on such a framework agreement during its term of validity either by applying the terms set forth in the framework agreement or, if all terms have not been fixed in advance in the framework agreement, by reopening competition between the parties to the framework agreement in relation to those terms. The reopening of competition should comply with certain rules the aim of which is to guarantee the required flexibility and to guarantee respect for the general principles, in particular the principle of equal treatment. For the same reasons, the term of the framework agreements should not exceed four years, except in cases duly justified by the contracting authorities.
***
E-procurement
The twelfth recital underlines the benefits of electronic procurement:
(12) Certain new electronic purchasing techniques are continually being developed. Such techniques help to increase competition and streamline public purchasing, particularly in terms of the savings in time and money which their use will allow. Contracting authorities may make use of electronic purchasing techniques, providing such use complies with the rules drawn up under this Directive and the principles of equal treatment, non-discrimination and transparency. To that extent, a tender submitted by a tenderer, in particular where competition has been reopened under a framework agreement or where a dynamic purchasing system is being used, may take the form of that tenderer's electronic catalogue if the latter uses the means of communication chosen by the contracting authority in accordance with Article 42.
***
Electronic purchasing system
The thirteenth recital of the Procurement Directive Preamble announces rules for an electronic dynamic purchasing system, open to all qualified tenderers:
(13) In view of the rapid expansion of electronic purchasing systems, appropriate rules should now be introduced to enable contracting authorities to take full advantage of the possibilities afforded by these systems. Against this background, it is necessary to define a completely electronic dynamic purchasing system for commonly used purchases, and lay down specific rules for setting up and operating such a system in order to ensure the fair treatment of any economic operator who wishes to take part therein. Any economic operator which submits an indicative tender in accordance with the specification and meets the selection criteria should be allowed to join such a system. This purchasing technique allows the contracting authority, through the establishment of a list of tenderers already selected and the opportunity given to new tenderers to take part, to have a particularly broad range of tenders as a result of the electronic facilities available, and hence to ensure optimum use of public funds through broad competition.
***
Electronic auctions
When the object of a contract is quantifiable (figures or percentages), electronic auctions may be used, as indicated in the fourteenth recital of the Procurement Directive Preamble:
(14) Since use of the technique of electronic auctions is likely to increase, such auctions should be given a Community definition and governed by specific rules in order to ensure that they operate in full accordance with the principles of equal treatment, non-discrimination and transparency. To that end, provision should be made for such electronic auctions to deal only with contracts for works, supplies or services for which the specifications can be determined with precision. Such may in particular be the case for recurring supplies, works and service contracts. With the same objective, it must also to be possible to establish the respective ranking of the tenderers at any stage of the electronic auction. Recourse to electronic auctions enables contracting authorities to ask tenderers to submit new prices, revised downwards, and when the contract is awarded to the most economically advantageous tender, also to improve elements of the tenders other than prices. In order to guarantee compliance with the principle of transparency, only the elements suitable for automatic evaluation by electronic means, without any intervention and/or appreciation by the contracting authority, may be the object of electronic auctions, that is, only the elements which are quantifiable so that they can be expressed in figures or percentages. On the other hand, those aspects of the tenders which imply an appreciation of non-quantifiable elements should not be the object of electronic auctions. Consequently, certain works contracts and certain service contracts having as their subject-matter intellectual performances, such as the design of works, should not be the object of electronic auctions.
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
Julien Frisch reads Helsingin Sanomat
Julien Frisch has written several blog posts about preparations ahead of the European elections due in June 2009:
http://julienfrisch.blogspot.com/
Perhaps Julien is not a regular reader of the biggest Finnish daily, Helsingin Sanomat, but after this post I guess that he is at least going to take a peek at its International edition.
Helsingin Sanomat, International edition: Parties seeking money and candidates for European election:
http://www.hs.fi/english/article/-/1135240828394
Ralf Grahn
http://julienfrisch.blogspot.com/
Perhaps Julien is not a regular reader of the biggest Finnish daily, Helsingin Sanomat, but after this post I guess that he is at least going to take a peek at its International edition.
Helsingin Sanomat, International edition: Parties seeking money and candidates for European election:
http://www.hs.fi/english/article/-/1135240828394
Ralf Grahn
European Central Bank: Regulatory powers
The European Central Bank needs legislative and decision-making powers in order to function as a central bank.
***
Current treaty
Article 110 (ex Article 108a) of the Treaty establishing the European Community (TEC) sets out the regulatory powers conferred upon the European Central Bank (ECB), i.e. to legislate and to decide in order to fulfil its tasks as the central bank, in principle for the European Union, but in practice for the Eurosystem (euro area).
Here is the text of Article 110 TEC, from the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/89:
Article 110 TEC
1. In order to carry out the tasks entrusted to the ESCB, the ECB shall, in accordance with the provisions of this Treaty and under the conditions laid down in the Statute of the ESCB:
— make regulations to the extent necessary to implement the tasks defined in Article 3.1, first indent, Articles 19.1, 22 and 25.2 of the Statute of the ESCB and in cases which shall be laid down in the acts of the Council referred to in Article 107(6),
— take decisions necessary for carrying out the tasks entrusted to the ESCB under this Treaty and the Statute of the ESCB,
— make recommendations and deliver opinions.
2. A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.
Recommendations and opinions shall have no binding force.
A decision shall be binding in its entirety upon those to whom it is addressed.
Articles 253, 254 and 256 shall apply to regulations and decisions adopted by the ECB.
The ECB may decide to publish its decisions, recommendations and opinions.
3. Within the limits and under the conditions adopted by the Council under the procedure laid down in Article 107(6), the ECB shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions.
***
Original Lisbon Treaty
In Article 2, point 95, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) amended Article 110 (OJ 17.12.2007 C 306/74):
95) In Article 110, the first four subparagraphs of paragraph 2 shall be deleted.
***
Renumbering
The TFEU table of equivalences confirms that Article 110 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 132 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 132 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 115/104:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 2 Monetary policy
Article 132 TFEU
(ex Article 110 TEC)
1. In order to carry out the tasks entrusted to the ESCB, the European Central Bank shall, in accordance with the provisions of the Treaties and under the conditions laid down in the Statute of the ESCB and of the ECB:
— make regulations to the extent necessary to implement the tasks defined in Article 3.1, first indent, Articles 19.1, 22 and 25.2 of the Statute of the ESCB and of the ECB in cases which shall be laid down in the acts of the Council referred to in Article 129(4),
— take decisions necessary for carrying out the tasks entrusted to the ESCB under the Treaties and the Statute of the ESCB and of the ECB,
— make recommendations and deliver opinions.
2. The European Central Bank may decide to publish its decisions, recommendations and opinions.
3. Within the limits and under the conditions adopted by the Council under the procedure laid down in Article 129(4), the European Central Bank shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions.
***
Regulatory powers
The powers of the European Central Bank are limited generally by the treaties and the ESCB Statute; Article 110(1) TEC.
The legislative powers, to make regulations, are further limited by the enumerated provisions of the ESCB Statute and the acts of the Council mentioned; Article 110(1) TEC first indent. The instruments are called ECB Regulations.
The power to take binding decisions (ECB Decisions) is accompanied by the competence to impose sanctions for failure to comply, in accordance with Article 110(3) TEC.
***
ESCB Statute
With minute differences, ESCB Statute Article 34 on legal acts reiterates the wording of Article 110 TEC. See Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (1992), OJ 29.12.2006 C 321 E/272-273:
CHAPTER VII
GENERAL PROVISIONS
Article 34 ESCB Statute
Legal acts
34.1. In accordance with Article 110 of this Treaty, the ECB shall:
— make regulations to the extent necessary to implement the tasks defined in Article 3.1, first indent, Articles 19.1, 22 or 25.2 and in cases which shall be laid down in the acts of the Council referred to in Article 42;
— take decisions necessary for carrying out the tasks entrusted to the ESCB under this Treaty and this Statute;
— make recommendations and deliver opinions.
34.2. A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.
Recommendations and opinions shall have no binding force.
A decision shall be binding in its entirety upon those to whom it is addressed.
Articles 253, 254 and 256 of this Treaty shall apply to regulations and decisions adopted by the ECB.
The ECB may decide to publish its decisions, recommendations and opinions.
34.3. Within the limits and under the conditions adopted by the Council under the procedure laid down in Article 42, the ECB shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions.
***
Summaries
How has the ECB used its regulatory powers?
The ECB booklet Legal framework of the Eurosystem and the European System of Central Banks – ECB legal acts and instruments (July 2008) presents summaries of the relevant ECB Regulations and ECB Decisions in the following areas:
– ECB institutional provisions;
– Monetary policy and operations;
– Payment and settlement systems (TARGET2);
– Banknotes and coins, means of payment and currency matters;
– Foreign reserves, foreign exchange and reserve management services;
– Statistics; and
– Fraud prevention, transparency and data protection.
Ralf Grahn
***
Current treaty
Article 110 (ex Article 108a) of the Treaty establishing the European Community (TEC) sets out the regulatory powers conferred upon the European Central Bank (ECB), i.e. to legislate and to decide in order to fulfil its tasks as the central bank, in principle for the European Union, but in practice for the Eurosystem (euro area).
Here is the text of Article 110 TEC, from the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/89:
Article 110 TEC
1. In order to carry out the tasks entrusted to the ESCB, the ECB shall, in accordance with the provisions of this Treaty and under the conditions laid down in the Statute of the ESCB:
— make regulations to the extent necessary to implement the tasks defined in Article 3.1, first indent, Articles 19.1, 22 and 25.2 of the Statute of the ESCB and in cases which shall be laid down in the acts of the Council referred to in Article 107(6),
— take decisions necessary for carrying out the tasks entrusted to the ESCB under this Treaty and the Statute of the ESCB,
— make recommendations and deliver opinions.
2. A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.
Recommendations and opinions shall have no binding force.
A decision shall be binding in its entirety upon those to whom it is addressed.
Articles 253, 254 and 256 shall apply to regulations and decisions adopted by the ECB.
The ECB may decide to publish its decisions, recommendations and opinions.
3. Within the limits and under the conditions adopted by the Council under the procedure laid down in Article 107(6), the ECB shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions.
***
Original Lisbon Treaty
In Article 2, point 95, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) amended Article 110 (OJ 17.12.2007 C 306/74):
95) In Article 110, the first four subparagraphs of paragraph 2 shall be deleted.
***
Renumbering
The TFEU table of equivalences confirms that Article 110 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 132 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 132 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 115/104:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 2 Monetary policy
Article 132 TFEU
(ex Article 110 TEC)
1. In order to carry out the tasks entrusted to the ESCB, the European Central Bank shall, in accordance with the provisions of the Treaties and under the conditions laid down in the Statute of the ESCB and of the ECB:
— make regulations to the extent necessary to implement the tasks defined in Article 3.1, first indent, Articles 19.1, 22 and 25.2 of the Statute of the ESCB and of the ECB in cases which shall be laid down in the acts of the Council referred to in Article 129(4),
— take decisions necessary for carrying out the tasks entrusted to the ESCB under the Treaties and the Statute of the ESCB and of the ECB,
— make recommendations and deliver opinions.
2. The European Central Bank may decide to publish its decisions, recommendations and opinions.
3. Within the limits and under the conditions adopted by the Council under the procedure laid down in Article 129(4), the European Central Bank shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions.
***
Regulatory powers
The powers of the European Central Bank are limited generally by the treaties and the ESCB Statute; Article 110(1) TEC.
The legislative powers, to make regulations, are further limited by the enumerated provisions of the ESCB Statute and the acts of the Council mentioned; Article 110(1) TEC first indent. The instruments are called ECB Regulations.
The power to take binding decisions (ECB Decisions) is accompanied by the competence to impose sanctions for failure to comply, in accordance with Article 110(3) TEC.
***
ESCB Statute
With minute differences, ESCB Statute Article 34 on legal acts reiterates the wording of Article 110 TEC. See Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (1992), OJ 29.12.2006 C 321 E/272-273:
CHAPTER VII
GENERAL PROVISIONS
Article 34 ESCB Statute
Legal acts
34.1. In accordance with Article 110 of this Treaty, the ECB shall:
— make regulations to the extent necessary to implement the tasks defined in Article 3.1, first indent, Articles 19.1, 22 or 25.2 and in cases which shall be laid down in the acts of the Council referred to in Article 42;
— take decisions necessary for carrying out the tasks entrusted to the ESCB under this Treaty and this Statute;
— make recommendations and deliver opinions.
34.2. A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.
Recommendations and opinions shall have no binding force.
A decision shall be binding in its entirety upon those to whom it is addressed.
Articles 253, 254 and 256 of this Treaty shall apply to regulations and decisions adopted by the ECB.
The ECB may decide to publish its decisions, recommendations and opinions.
34.3. Within the limits and under the conditions adopted by the Council under the procedure laid down in Article 42, the ECB shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions.
***
Summaries
How has the ECB used its regulatory powers?
The ECB booklet Legal framework of the Eurosystem and the European System of Central Banks – ECB legal acts and instruments (July 2008) presents summaries of the relevant ECB Regulations and ECB Decisions in the following areas:
– ECB institutional provisions;
– Monetary policy and operations;
– Payment and settlement systems (TARGET2);
– Banknotes and coins, means of payment and currency matters;
– Foreign reserves, foreign exchange and reserve management services;
– Statistics; and
– Fraud prevention, transparency and data protection.
Ralf Grahn
Wednesday, 5 November 2008
Congratulating the American people
Much has been said about the election of a new President of the United States of America. The people have spoken, and I congratulate them on their choice of executive.
As a citizen of the European Union, I would just like to add an observation and a question:
In my view, Europe should opt for a parliamentary system, with a Prime Minister at the helm.
How long will it take before we are allowed to elect our common executive?
Ralf Grahn
As a citizen of the European Union, I would just like to add an observation and a question:
In my view, Europe should opt for a parliamentary system, with a Prime Minister at the helm.
How long will it take before we are allowed to elect our common executive?
Ralf Grahn
State aid: Public service broadcasting
With practically every media company active on-line, the Communication from the Commission on the application of state aid rules to public service broadcasting (4 November 2008) is going to be read closely.
In addition, the European Commission wants to incorporate its own decisions and relevant European Court decisions into its coming guideline in order to add legal certainty to complex questions, and to give member states added guidance.
Member states have broad discretion to decide on the type of public broadcasting they want, if any, but the Commission monitors that state aid given to public broadcasters does not harm commercial competitors. The number of complaints from private operators has been rising.
The Communication is available at:
http://ec.europa.eu/comm/competition/consultations/broadcasting_communication_en.pdf
Stakeholders are invited to make their observations by 15 January 2009.
***
There are at least three interesting papers accompanying the Broadcasting Communication.
Press release
The press release presents a quick overview of the matter:
State aid: Commission consults on revised rules for state funding of public service broadcasting (4 November 2008)
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1626&format=HTML&aged=0&language=EN&guiLanguage=en
FACs
Frequently asked questions offer a bit more on interesting or controversial details.
State aid: Commission consults on revised rules for state funding of public service broadcasting - frequently asked questions (4 November 2008)
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/671&format=HTML&aged=0&language=EN&guiLanguage=en
Summary of broadcasting decisions
The Commission’s Competition Directorate-General has compiled a convenient list of broadcasting decisions: Commission decisions on State aid to public service broadcasting (1999-2008).
The list is available at:
http://ec.europa.eu/comm/competition/sectors/media/decisions_psb.pdf
Ralf Grahn
In addition, the European Commission wants to incorporate its own decisions and relevant European Court decisions into its coming guideline in order to add legal certainty to complex questions, and to give member states added guidance.
Member states have broad discretion to decide on the type of public broadcasting they want, if any, but the Commission monitors that state aid given to public broadcasters does not harm commercial competitors. The number of complaints from private operators has been rising.
The Communication is available at:
http://ec.europa.eu/comm/competition/consultations/broadcasting_communication_en.pdf
Stakeholders are invited to make their observations by 15 January 2009.
***
There are at least three interesting papers accompanying the Broadcasting Communication.
Press release
The press release presents a quick overview of the matter:
State aid: Commission consults on revised rules for state funding of public service broadcasting (4 November 2008)
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1626&format=HTML&aged=0&language=EN&guiLanguage=en
FACs
Frequently asked questions offer a bit more on interesting or controversial details.
State aid: Commission consults on revised rules for state funding of public service broadcasting - frequently asked questions (4 November 2008)
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/671&format=HTML&aged=0&language=EN&guiLanguage=en
Summary of broadcasting decisions
The Commission’s Competition Directorate-General has compiled a convenient list of broadcasting decisions: Commission decisions on State aid to public service broadcasting (1999-2008).
The list is available at:
http://ec.europa.eu/comm/competition/sectors/media/decisions_psb.pdf
Ralf Grahn
EU Public Procurement Directive Preamble
The 84 Articles and twelve Annexes of the Procurement Directive 2004/18/EC are preceded by a long Preamble laying out the legal history and reasons behind the new Directive. These Preambles are not always easy to read, but they contain a wealth of information, offering an overview of a new EC legislative act.
We present the Preamble of the EC Procurement Directive over a number of posts to facilitate reading:
“THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Article 47(2) and Article 55 and Article 95 thereof,
Having regard to the proposal from the Commission (1),
Having regard to the opinion of the Economic and Social Committee (2),
Having regard to the opinion of the Committee of the Regions (3),
Acting in accordance with the procedure laid down in Article 251 of the Treaty (4), in the light of the joint text approved by the Conciliation Committee on 9 December 2003,”
***
Drafting history
The footnotes refer to the various stages of the legislative process. This is how they appear at the bottom of the page of the Official Journal of the European Union, giving the detailed references to the Commission proposals, the opinions of the Economic and Social Committee (ESC) and the Committee of the Regions (CoR) as well as the European Parliament’s and the Council’s positions (incomplete):
(1) OJ C 29 E, 30.1.2001, p. 11 and OJ C 203 E, 27.8.2002, p. 210.
(2) OJ C 193, 10.7.2001, p. 7.
(3) OJ C 144, 16.5.2001, p. 23.
(4) Opinion of the European Parliament of 17 January 2002 (OJ C 271 E, 7.11.2002, p. 176), Council Common Position of 20 Mars 2003 (OJ C 147 E, 24.6.2003, p. 1) and Position of the European Parliament of 2 July 2003 (not yet published in the Official Journal). Legislative Resolution of the European Parliament of 29 January 2004 and Decision of the Council of 2 February 2004.
***
Legal base
Yesterday’s post briefly described the legal base of the Procurement Directive, i.e. the provisions regarding European Community competence to legislate.
***
Reasons
The first recital mentions simplification, modernisation and clarification among the reasons for recasting the Procurement Directives. In addition, ECJ case-law as well as environmental and social concerns are mentioned:
“Whereas:
(1) On the occasion of new amendments being made to Council Directives 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (5), 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts (6) and 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts (7), which are necessary to meet requests for simplification and modernisation made by contracting authorities and economic operators alike in their responses to the Green Paper adopted by the Commission on 27 November 1996, the Directives should, in the interests of clarity, be recast. This Directive is based on Court of Justice case-law, in particular case-law on award criteria, which clarifies the possibilities for the contracting authorities to meet the needs of the public concerned, including in the environmental and/or social area, provided that such criteria are linked to the subject-matter of the contract, do not confer an unrestricted freedom of choice on the contracting authority, are expressly mentioned and comply with the fundamental principles mentioned in recital 2.”
***
The footnotes give the exact references to the then existing Directives:
(5) OJ L 209, 24.7.1992, p. 1. Directive as last amended by Commission Directive 2001/78/EC (OJ L 285, 29.10.2001, p. 1).
(6) OJ L 199, 9.8.1993, p. 1. Directive as last amended by Commission Directive 2001/78/EC.
(7) OJ L 199, 9.8.1993, p. 54. Directive as last amended by Commission Directive 2001/78/EC.
***
Principles
The second recital draws attention to principles underlying the award of public contracts in the internal market, such as the free movement of goods, the freedom of establishment and the freedom to provide services. General principles mentioned are equal treatment, non-discrimination, mutual recognition, proportionality and transparency.
The award of public contracts above certain threshold values is made subject to coordinated procedures to ensure that the principles are applied and that public procurement is opened up to competition:
“(2) The award of contracts concluded in the Member States on behalf of the State, regional or local authorities and other bodies governed by public law entities, is subject to the respect of the principles of the Treaty and in particular to the principle of freedom of movement of goods, the principle of freedom of establishment and the principle of freedom to provide services and to the principles deriving therefrom, such as the principle of equal treatment, the principle of non-discrimination, the principle of mutual recognition, the principle of proportionality and the principle of transparency. However, for public contracts above a certain value, it is advisable to draw up provisions of Community coordination of national procedures for the award of such contracts which are based on these principles so as to ensure the effects of them and to guarantee the opening-up of public procurement to competition. These coordinating provisions should therefore be interpreted in accordance with both the aforementioned rules and principles and other rules of the Treaty.”
***
Current practices
The third recital strives to reassure the reader that the (central) coordinating provisions build on existing national procedures and practices:
“(3) Such coordinating provisions should comply as far as possible with current procedures and practices in each of the Member States.”
***
Equal treatment
One aspect of the principle of equal treatment is mentioned in the fourth recital, namely the non-distortive treatment of public and private bidders:
“(4) Member States should ensure that the participation of a body governed by public law as a tenderer in a procedure for the award of a public contract does not cause any distortion of competition in relation to private tenderers.”
***
Green public procurement
Environmental concerns and sustainable development are specifically mentioned in the fifth recital, subject to clarifying Directive rules:
“(5) Under Article 6 of the Treaty, environmental protection requirements are to be integrated into the definition and implementation of the Community policies and activities referred to in Article 3 of that Treaty, in particular with a view to promoting sustainable development. This Directive therefore clarifies how the contracting authorities may contribute to the protection of the environment and the promotion of sustainable development, whilst ensuring the possibility of obtaining the best value for money for their contracts.”
***
Public policy derogations
Exceptions from the Procurement Directive may be made on customary public policy grounds, as well as to protect health, human and animal life or the preservation of plant life, but as always derogations have to be interpreted narrowly:
“(6) Nothing in this Directive should prevent the imposition or enforcement of measures necessary to protect public policy, public morality, public security, health, human and animal life or the preservation of plant life, in particular with a view to sustainable development, provided that these measures are in conformity with the Treaty.”
***
Procurement Directive 2004/18/EC
A notice to those who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
We present the Preamble of the EC Procurement Directive over a number of posts to facilitate reading:
“THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Article 47(2) and Article 55 and Article 95 thereof,
Having regard to the proposal from the Commission (1),
Having regard to the opinion of the Economic and Social Committee (2),
Having regard to the opinion of the Committee of the Regions (3),
Acting in accordance with the procedure laid down in Article 251 of the Treaty (4), in the light of the joint text approved by the Conciliation Committee on 9 December 2003,”
***
Drafting history
The footnotes refer to the various stages of the legislative process. This is how they appear at the bottom of the page of the Official Journal of the European Union, giving the detailed references to the Commission proposals, the opinions of the Economic and Social Committee (ESC) and the Committee of the Regions (CoR) as well as the European Parliament’s and the Council’s positions (incomplete):
(1) OJ C 29 E, 30.1.2001, p. 11 and OJ C 203 E, 27.8.2002, p. 210.
(2) OJ C 193, 10.7.2001, p. 7.
(3) OJ C 144, 16.5.2001, p. 23.
(4) Opinion of the European Parliament of 17 January 2002 (OJ C 271 E, 7.11.2002, p. 176), Council Common Position of 20 Mars 2003 (OJ C 147 E, 24.6.2003, p. 1) and Position of the European Parliament of 2 July 2003 (not yet published in the Official Journal). Legislative Resolution of the European Parliament of 29 January 2004 and Decision of the Council of 2 February 2004.
***
Legal base
Yesterday’s post briefly described the legal base of the Procurement Directive, i.e. the provisions regarding European Community competence to legislate.
***
Reasons
The first recital mentions simplification, modernisation and clarification among the reasons for recasting the Procurement Directives. In addition, ECJ case-law as well as environmental and social concerns are mentioned:
“Whereas:
(1) On the occasion of new amendments being made to Council Directives 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (5), 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts (6) and 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts (7), which are necessary to meet requests for simplification and modernisation made by contracting authorities and economic operators alike in their responses to the Green Paper adopted by the Commission on 27 November 1996, the Directives should, in the interests of clarity, be recast. This Directive is based on Court of Justice case-law, in particular case-law on award criteria, which clarifies the possibilities for the contracting authorities to meet the needs of the public concerned, including in the environmental and/or social area, provided that such criteria are linked to the subject-matter of the contract, do not confer an unrestricted freedom of choice on the contracting authority, are expressly mentioned and comply with the fundamental principles mentioned in recital 2.”
***
The footnotes give the exact references to the then existing Directives:
(5) OJ L 209, 24.7.1992, p. 1. Directive as last amended by Commission Directive 2001/78/EC (OJ L 285, 29.10.2001, p. 1).
(6) OJ L 199, 9.8.1993, p. 1. Directive as last amended by Commission Directive 2001/78/EC.
(7) OJ L 199, 9.8.1993, p. 54. Directive as last amended by Commission Directive 2001/78/EC.
***
Principles
The second recital draws attention to principles underlying the award of public contracts in the internal market, such as the free movement of goods, the freedom of establishment and the freedom to provide services. General principles mentioned are equal treatment, non-discrimination, mutual recognition, proportionality and transparency.
The award of public contracts above certain threshold values is made subject to coordinated procedures to ensure that the principles are applied and that public procurement is opened up to competition:
“(2) The award of contracts concluded in the Member States on behalf of the State, regional or local authorities and other bodies governed by public law entities, is subject to the respect of the principles of the Treaty and in particular to the principle of freedom of movement of goods, the principle of freedom of establishment and the principle of freedom to provide services and to the principles deriving therefrom, such as the principle of equal treatment, the principle of non-discrimination, the principle of mutual recognition, the principle of proportionality and the principle of transparency. However, for public contracts above a certain value, it is advisable to draw up provisions of Community coordination of national procedures for the award of such contracts which are based on these principles so as to ensure the effects of them and to guarantee the opening-up of public procurement to competition. These coordinating provisions should therefore be interpreted in accordance with both the aforementioned rules and principles and other rules of the Treaty.”
***
Current practices
The third recital strives to reassure the reader that the (central) coordinating provisions build on existing national procedures and practices:
“(3) Such coordinating provisions should comply as far as possible with current procedures and practices in each of the Member States.”
***
Equal treatment
One aspect of the principle of equal treatment is mentioned in the fourth recital, namely the non-distortive treatment of public and private bidders:
“(4) Member States should ensure that the participation of a body governed by public law as a tenderer in a procedure for the award of a public contract does not cause any distortion of competition in relation to private tenderers.”
***
Green public procurement
Environmental concerns and sustainable development are specifically mentioned in the fifth recital, subject to clarifying Directive rules:
“(5) Under Article 6 of the Treaty, environmental protection requirements are to be integrated into the definition and implementation of the Community policies and activities referred to in Article 3 of that Treaty, in particular with a view to promoting sustainable development. This Directive therefore clarifies how the contracting authorities may contribute to the protection of the environment and the promotion of sustainable development, whilst ensuring the possibility of obtaining the best value for money for their contracts.”
***
Public policy derogations
Exceptions from the Procurement Directive may be made on customary public policy grounds, as well as to protect health, human and animal life or the preservation of plant life, but as always derogations have to be interpreted narrowly:
“(6) Nothing in this Directive should prevent the imposition or enforcement of measures necessary to protect public policy, public morality, public security, health, human and animal life or the preservation of plant life, in particular with a view to sustainable development, provided that these measures are in conformity with the Treaty.”
***
Procurement Directive 2004/18/EC
A notice to those who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
National central banks: EMU compatible legislation
The Treaty on European Union (Treaty of Maastricht) entered into force fifteen years ago, on 1 November 1993. Among the main novelties were the provisions on economic and monetary union (EMU).
Preparations for the third stage of EMU, including the European System of Central Banks (ESCB) and the European Central Bank (ECB) as well as the single currency, later given the name ‘euro’, required adaptation of national legislation in the member states.
The third stage of EMU began on 1 January 1999.
***
Current treaty
Article 109 (ex Article 108) of the Treaty establishing the European Community (TEC) sets out the obligation of the member states to adapt their legislation to the treaty provisions on economic and monetary union, including the ESCB Statute (as in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/89):
Article 109 TEC
Each Member State shall ensure, at the latest at the date of the establishment of the ESCB, that its national legislation including the statutes of its national central bank is compatible with this Treaty and the Statute of the ESCB.
***
Original Lisbon Treaty
In Article 2, point 94, of the original Treaty of Lisbon (ToL) the IGC 2007 amended Article 109 (OJ 17.12.2007 C 306/74):
94) In Article 109, the words ‘, at the latest at the date of the establishment of the ESCB,’ shall be deleted.
***
Renumbering
The TFEU table of equivalences confirms that Article 109 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 131 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 131 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 115/104:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 2 Monetary policy
Article 131 TFEU
(ex Article 109 TEC)
Each Member State shall ensure that its national legislation including the statutes of its national central bank is compatible with the Treaties and the Statute of the ESCB and of the ECB.
***
The European System of Central Banks (ESCB) is up and running. The words referring to its establishment have become redundant, but the obligation to ensure the compatibility of national legislation with the treaties (third stage of EMU) is ongoing, with the national central bank participating in the ESCB and independent from political interference.
Old or new EU member states are required to adapt their national legislation before being admitted to the Eurosystem. (See the latest Convergence Report of the ECB, May 2008, with regard to the non-euro area member states.)
Ralf Grahn
Preparations for the third stage of EMU, including the European System of Central Banks (ESCB) and the European Central Bank (ECB) as well as the single currency, later given the name ‘euro’, required adaptation of national legislation in the member states.
The third stage of EMU began on 1 January 1999.
***
Current treaty
Article 109 (ex Article 108) of the Treaty establishing the European Community (TEC) sets out the obligation of the member states to adapt their legislation to the treaty provisions on economic and monetary union, including the ESCB Statute (as in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/89):
Article 109 TEC
Each Member State shall ensure, at the latest at the date of the establishment of the ESCB, that its national legislation including the statutes of its national central bank is compatible with this Treaty and the Statute of the ESCB.
***
Original Lisbon Treaty
In Article 2, point 94, of the original Treaty of Lisbon (ToL) the IGC 2007 amended Article 109 (OJ 17.12.2007 C 306/74):
94) In Article 109, the words ‘, at the latest at the date of the establishment of the ESCB,’ shall be deleted.
***
Renumbering
The TFEU table of equivalences confirms that Article 109 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 131 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 131 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 115/104:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 2 Monetary policy
Article 131 TFEU
(ex Article 109 TEC)
Each Member State shall ensure that its national legislation including the statutes of its national central bank is compatible with the Treaties and the Statute of the ESCB and of the ECB.
***
The European System of Central Banks (ESCB) is up and running. The words referring to its establishment have become redundant, but the obligation to ensure the compatibility of national legislation with the treaties (third stage of EMU) is ongoing, with the national central bank participating in the ESCB and independent from political interference.
Old or new EU member states are required to adapt their national legislation before being admitted to the Eurosystem. (See the latest Convergence Report of the ECB, May 2008, with regard to the non-euro area member states.)
Ralf Grahn
Tuesday, 4 November 2008
Legal base: EU Public Procurement Directive
The Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114), has been amended several times, so this is a referral to the consolidated version 1 January 2008:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
***
Legal base
The Procurement Directive 2004/18/EC is based on the following provisions of the Treaty establishing the European Community (TEC):
Article 47(2) TEC on the right of establishment as self-employed persons,
Article 55 TEC relating to the freedom to provide services.
Article 95 TEC relating to measures for the approximation of laws for the establishment and functioning of the internal market.
The directive was issued according to the so called co-decision procedure (Article 251 TEC).
Ralf Grahn
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
***
Legal base
The Procurement Directive 2004/18/EC is based on the following provisions of the Treaty establishing the European Community (TEC):
Article 47(2) TEC on the right of establishment as self-employed persons,
Article 55 TEC relating to the freedom to provide services.
Article 95 TEC relating to measures for the approximation of laws for the establishment and functioning of the internal market.
The directive was issued according to the so called co-decision procedure (Article 251 TEC).
Ralf Grahn
Enterprise Europe Network
The Enterprise Europe Network (EEN) offers support and advice to businesses across Europe and its services are specifically designed for small and medium-sized enterprises (SMEs).
Launched in 2008, the EEN offers concrete and effective solutions to entrepreneurs and companies in more than 40 countries, including the 27 EU member states, three EU candidate countries (Croatia, the former Yugoslav Republic of Macedonia and Turkey), members of the European Economic Area (EEA) and other participating third countries. The network operates through 600 local partners, in other words, several contact points in each country.
The web address of the EEN is:
http://www.enterprise-europe-network.ec.europa.eu/index_en.htm
Ralf Grahn
Launched in 2008, the EEN offers concrete and effective solutions to entrepreneurs and companies in more than 40 countries, including the 27 EU member states, three EU candidate countries (Croatia, the former Yugoslav Republic of Macedonia and Turkey), members of the European Economic Area (EEA) and other participating third countries. The network operates through 600 local partners, in other words, several contact points in each country.
The web address of the EEN is:
http://www.enterprise-europe-network.ec.europa.eu/index_en.htm
Ralf Grahn
European Central Bank independence
This is one of the treaty provisions president Nicolas Sarkozy should read and remember, both as the acting president of the European Council and as the elected president of France.
We start to look at the European Union (European Community) treaty provisions in an expedited manner, presenting the current Article text, the Lisbon Treaty amendments and the consolidated text of the Treaty on the Functioning of the European Union (TFEU). Comments are kept to a minimum, unless discussion or other reasons precipitate us into a more lavish treatment.
***
Article 108 (ex Article 107) of the Treaty establishing the European Community (TEC) sets out the independence of the European Central Bank (ECB), the national central banks and the members of their decision-making bodies (as in the latest consolidated version of the treaties, OJ 29.12.2006 C 321/88):
Article 108 TEC
When exercising the powers and carrying out the tasks and duties conferred upon them by this Treaty and the Statute of the ESCB, neither the ECB, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Community institutions or bodies, from any government of a Member State or from any other body. The Community institutions and bodies and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the ECB or of the national central banks in the performance of their tasks.
***
Original Lisbon Treaty
In Article 2, point 93 of the original Treaty of Lisbon (ToL) the IGC 2007 amended Article 107 TEC and in point 94 it dealt with Article 109 TEC (OJ 17.12.2007 C 306/74):
In other words, there are no express amendments to Article 108 TEC.
***
Renumbering
The TFEU table of equivalences confirms that Article 108 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 130 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 130 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 115/104:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 2 Monetary policy
Article 130 TFEU
(ex Article 108 TEC)
When exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB and of the ECB, neither the European Central Bank, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Union institutions, bodies, offices or agencies, from any government of a Member State or from any other body. The Union institutions, bodies, offices or agencies and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the European Central Bank or of the national central banks in the performance of their tasks.
***
In the Treaty of Lisbon, the Statute of the European System of Central Banks and of the European Central Bank has become Protocol No 4 (OJ 9.5.2008 C 115/230), but the wording of Article 130 TFEU is faithfully reproduced.
Article 130 TFEU prohibits both taking and giving instructions.
Even after the mini-treaty, Article 131 TFEU requires the national legislation including the statutes of each national central bank to be compatible with the treaties and the ESCB Statute.
Independence of the national central bank is one of the admission criteria to the third stage of economic and monetary union (EMU), i.e. entering the Eurosystem. See Article 140(1) TFEU.
Ralf Grahn
We start to look at the European Union (European Community) treaty provisions in an expedited manner, presenting the current Article text, the Lisbon Treaty amendments and the consolidated text of the Treaty on the Functioning of the European Union (TFEU). Comments are kept to a minimum, unless discussion or other reasons precipitate us into a more lavish treatment.
***
Article 108 (ex Article 107) of the Treaty establishing the European Community (TEC) sets out the independence of the European Central Bank (ECB), the national central banks and the members of their decision-making bodies (as in the latest consolidated version of the treaties, OJ 29.12.2006 C 321/88):
Article 108 TEC
When exercising the powers and carrying out the tasks and duties conferred upon them by this Treaty and the Statute of the ESCB, neither the ECB, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Community institutions or bodies, from any government of a Member State or from any other body. The Community institutions and bodies and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the ECB or of the national central banks in the performance of their tasks.
***
Original Lisbon Treaty
In Article 2, point 93 of the original Treaty of Lisbon (ToL) the IGC 2007 amended Article 107 TEC and in point 94 it dealt with Article 109 TEC (OJ 17.12.2007 C 306/74):
In other words, there are no express amendments to Article 108 TEC.
***
Renumbering
The TFEU table of equivalences confirms that Article 108 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 130 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.)
***
Consolidated Lisbon Treaty: TFEU
Article 130 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 115/104:
Part Three Union policies and internal actions
Title VIII Economic and monetary policy
Chapter 2 Monetary policy
Article 130 TFEU
(ex Article 108 TEC)
When exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB and of the ECB, neither the European Central Bank, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Union institutions, bodies, offices or agencies, from any government of a Member State or from any other body. The Union institutions, bodies, offices or agencies and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the European Central Bank or of the national central banks in the performance of their tasks.
***
In the Treaty of Lisbon, the Statute of the European System of Central Banks and of the European Central Bank has become Protocol No 4 (OJ 9.5.2008 C 115/230), but the wording of Article 130 TFEU is faithfully reproduced.
Article 130 TFEU prohibits both taking and giving instructions.
Even after the mini-treaty, Article 131 TFEU requires the national legislation including the statutes of each national central bank to be compatible with the treaties and the ESCB Statute.
Independence of the national central bank is one of the admission criteria to the third stage of economic and monetary union (EMU), i.e. entering the Eurosystem. See Article 140(1) TFEU.
Ralf Grahn