Tuesday, 5 April 2011

European Council: Economic policy reform priorities IV

We continue looking at the governance and practices of the most important official institution of the EU, the European Council, with regard to fiscal consolidation and structural reform.

Having studied the Annual Growth Survey (AGS) from the Commission in Part One, and EU 2020 macroeconomic and fiscal guidance offered by the Economic and Financial Affairs Council (Ecofin) in Part Two, we turned to the contributions by the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) in Part Three, which dealt with employment, poverty and social exclusion.

It was possible to arrive this far in deciphering which priorities for fiscal consolidation and structural reform the European Council broadly endorsed (”In line with”), because someone was graceful enough to insert footnote 1 to paragraph 2, clumsily acknowledging the submerged parts of the iceberg:

In line with the Council's conclusions of 15 February and 7 March 2011 and further to the Commission's Annual Growth Survey. See also the Presidency's synthesis report of 16 March 2011.


European Council 24/25 March 2011 Conclusions; Brussels, 25 March 2011 (EUCO 10/11; 34 pages)

Hungarian synthesis report

The European Council did not exactly adopt (”See also”) the synthesis report from the Hungarian presidency of the EU Council, but it is well worth a closer look. Here the Hungarian presidency made a helpful contribution, by offering an overview and by including contributions from other Council configurations besides Ecofin and EPSCO.

There is, however, some ambiguity regarding the right version of the synthesis report and the differences between the various versions. The European Council footnote refers to a document dated 16 March, but if we search more diligently we find both a first revision, dated 16 March, and a second revised version, dated 18 March 2011.

The most obvious difference is that the two later papers are six pages shorter, but no explicit explanation is given in the introductory paragraph on the cover page:

Implementation of the European Semester - Synthesis report; Brussels, 16 March 2011 (document 7745/11; 21 pages)

Implementation of the European Semester - Synthesis report; Brussels, 16 March 2011 (document 7745/1/11 REV 1; 15 pages)

Implementation of the European Semester - Synthesis report; Brussels, 18 March 2011 (document 7745/2/11 REV 2; 15 pages)

The shorter versions speak about an annexed Commission report about meetings with member states concerning their national reform programmes (NPR), but they fail to include the annex. The interesting Commission summary of discussions is found only in the original version.


As a rough indication of the contents of the synthesis report, I quote the introductory paragraph on the cover sheet (here from the original version, 7745/11):

Delegations will find attached the synthesis report prepared by the Presidency, summarising the discussions and the main political messages of the different Council formations in relation to the Annual Growth Survey, in the framework of the European Semester. The report together with the ECOFIN and EPSCO Council conclusions, will be submitted to the Spring European Council on 24/25 March 2011, which is expected to give guidance to the Member States for the finalisation of their Stability and Convergence Programmes and National Reform Programmes in April. This report is accompanied by a Commission report (see Annex) on the bilateral discussions with Member States carried out during February and March. The Hungarian Presidency’s aim is to close the first European Semester by the time of the European Council in June 2011.

The synthesis report is a clear exposition of the framework: the Integrated guidelines the EU and the member states are committed to, as well as the stages within the new planning cycle called the European Semester.

In addition to the Ecofin and EPSCO Council contributions (acknowledged by the European Council), the synthesis report summarised the contributions by the Competitiveness Council, the Education Council, the TTE Council (Energy) and the Environment Council, constantly reminding the readers of the commonly agreed Europe 2020 (EU2020) and other goals.

The report noted the difficulties in reaching the ambitious goals, mentioned the next steps and expected the spring European Council to give strategic guidance on policies. Each member state would take this guidance into account in its final Stability or Convergence Programme and National Reform Programme (NRP).

Although quite general in tone, the annexed Commission report highlighted questions of interest to the central administrations in the EU member states, including consistency between different processes and programmes, as well as to all ”stakeholders” (regions, local administrations, social partners) engaged in planning and implementing reform programmes.

Good work by the Hungarian presidency!

Submitted documents

Do we find the Hungarian synthesis report among the documents submitted to the European Council?

Nope. Only the annotated draft agenda and the provisional agenda are acknowledged, despite the multitude of submissions we have observed along our route.

Improving the European Council

Which priorities for fiscal consolidation and structural reform did the European Council endorse?

Without the fortunate use of a footnote, we would have been totally lost. We now know that the European Council is more or less in agreement with the conclusions of two Council meetings (”In line with”). It acknowledged the synthesis report from the Hungarian Council presidency as useful information, because it was worth mentioning.

Based on paragraph 2 and footnote 1 of the European Council conclusions, we have been able to unearth the relevant documents on our excavation tour extending to four blog posts.


What if the European Council became interested in good governance, better communication, openess and closeness to the citizen?

In my humble opinion, this would require a transparent chain of proposals and decisions.

Instead of continuing to hide non-public (Coreper, Van Rompuy) draft conclusions behind meaningless phrases, the General Affairs Council (GAC) could become an important coordinator and a promoter of improved public discussion ahead of European Council meetings, by tabling concrete proposals, based on Council conclusions.

To these, the European Council would reply seriously, at this stage without becoming a legislative body.

The GAC could also follow up the implementation of European Council decisions in an open manner, through public reports and transparent decisions.

Now the GAC potential is wasted by its self-effacing role, and the public is deprived of the opportunity for a better informed discussion about real issues, before and after European Council meetings.

Positive practices are possible: We saw that the EPSCO Council conclusions linked and gave references to documents in their final form, and they also acknowledged the authors. The Hungarian synthesis report is also worth notice. Kudos!


This still leaves us with a few problems relating to the current form of government through European Council conclusions.

Many documents of varying kinds are submitted to the European Council. It cannot pronounce on every paragraph or suggestion in the present format.

On the other hand, if the European Council wants to be known as a Delphic Oracle hovering above mere mortals, by replying to large and complex questions by a few paragraphs, the conclusions easily turn into meaningless commonplaces, serving few needs of guidance or enlightenment.


Having studied the submitted texts, how much wiser do we become, if we turn to what the economic spring summit of the European Council itself said about economic policy reform in its conclusions?

Ralf Grahn

P.S. On the bilingual (French and English) EU Weekly blog, the nuclear physicist and citizen blogger Greg Henning follows the euro currency and political events in France and the European Union. Recommended reading.