Herman Van Rompuy on task force meeting to improve EU economic governance

The European Union (eurozone) and the International Monetary Fund have pledged €110 billion to rescue Greece and up to €750 billion for other contingencies with regard to euro stabilisation. Markets have continued to tumble.

It would have been astonishing if the EU finance ministers had approached the meeting of the task force on improved economic governance without a sense of urgency.

Initiated by the European Council and chaired by its president Herman Van Rompuy, the task force on crisis resolution and better budget discipline held its exploratory first meeting in Brussels yesterday, 21 May 2010.

Given the urgency and gravity of the issues, we have reasons to read the statement of Van Rompuy carefully and in full:


Remarks by Herman Van Rompuy, President of the European Council, following the first meeting of the Task force on economic governance (21 May 2010)

Today we had the first meeting of the Task Force on economic governance. It was a very useful meeting. I could feel a sense of urgency and a spirit of cooperation around the table. Everyone shares the will to go forward together.

As you probably know, the Task Force consists of representatives of all 27 Member States – mostly Ministers of Finance -, plus Commissioner Rehn from the Commission, President Trichet from the European Central Bank, Prime-minister Juncker from the Eurogroup and myself as chairman. All key actors are around the table.

Today was the start of a process. We did more than just identify the issues on the table. We have already found agreement on the four main objectives and also on the direction in which we will move forward for each of them.

I consider this as an important step upon which we can build in the forthcoming meetings.

Now, which are the four main objectives on which everybody agreed?

First objective: We should achieve greater budgetary discipline. In other words, we need to strengthen the Stability and Growth Pact and make it more effective.

Second objective: We need to find means to reduce the divergences in competitiveness between the Member States, at least when these divergences are too big. This is necessary to reach a more even economic development within the European Union, and in particular, in the euro area.

Third objective: We need to have an effective crisis mechanism in order to be able to deal with problems such as those we see today in the Eurozone.

The fourth objective is linked to the third: We need to strengthen economic governance, in institutional terms, in order to be able to act quicker and in a more coordinated and more efficient manner.

These are the four central priorities on which we will move forward.

The Commission contributed with an important Communication which contained a number of proposals. I, personally, have put some thinking points on the table as too have some Member States. Undoubtedly other Member States will follow suit with their proposals before the end of May. I welcome this active participation in our collective work very much.

On the basis of all this we will work on a comprehensive agreement. The Task Force we will meet twice more before the summer. Preparatory work will be done by a group of 'Sherpa's'. We will present a "Progress Report" to the European Council of 17 June. What do we aim for?

Our agreement should result in a stronger economic cohesion within the Union. This is vital for 27 countries with a common internal market and for a zone of 16 countries sharing a single currency.

Moreover, such cohesion is required in order to act in an effective and credible manner. The approach should be seen in the context of our considerable efforts to strengthen the structural economic growth within the Union, such as we are doing with the EU 2020 strategy.

A final point: we all want to draw the lessons from this difficult period. In the past, corrective measures were taken too late; the available legal instruments were not used sufficiently. That's why we need to act in a number of ways:

• in prevention and in correction;

• in the fields of the budget and of competitiveness;

• in the eurozone and in the European Union as a whole.

All Member States and all EU institutions need to work together on this.

I am deeply convinced that we can surmount this crisis. The measures we have taken for Greece (on 2 May) and in a broader framework (on 7 and 9 May) have proven that the European Union is able to act. We must now continue this work so we can avoid a repetition of these problems in the future.

Therefore, as I said previously, I am very glad that all members of the Task Force share the will to bring this about.

We are still planning to have our work ready before the European Council of October, instead of December.

Not a bad start for the Van Rompuy task force, but the challenges are huge for our economic security and future prosperity.




Ralf Grahn

EU Law: Legal base Structural Funds and Cohesion Fund

Secondary legislation of the Structural Funds and the Cohesion Fund of the European Community (European Union) is based on two Articles of the Treaty establishing the European Community.

We look at the current Treaty establishing the European Community and the Lisbon Treaty (Treaty on the Functioning of the European Union) before presenting references to the legal acts, which govern the second largest tranche of EU spending (hopefully investment).

Both projects and administrators have a tough job to fulfil all the requirements of the detailed provisions.

As always, readers are invited to share their experiences in the comments section.


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Articles 161 and 162 TEC

The two Articles strive to accomplish a certain hierarchy of norms.

According to Article 161 TEC (ex Article 130d), the Council shall define the tasks, priority objectives and the organisation of the Structural Funds, which may involve grouping the Funds.

The Council, acting by the same procedure, shall also define the general rules applicable to them and the provisions necessary to ensure their effectiveness and the coordination of the Funds with one another and with the other existing Financial Instruments.

Article 161(2) TEC serves as the legal base for secondary legislation on the Cohesion Fund, aimed at the fields of environment and trans-European networks in the area of transport infrastructure (excluding energy and telecommunications networks).


The third paragraph of Article 161 TEC is now redundant.



Article 162 TEC (ex Article 130e) refers to implementing decisions relating to the European Regional Development Fund (ERDF), which indicates a difference between the general and coordinating norms issued pursuant to Article 161 TEC and these implementing decisions concerning the ERDF. It is less than clear where the more general norms end and where the more specific norms start.

Without distinguishing between more general and coordinating norms compared to implementing ‘decisions’, the second paragraph of Article 162 TEC states that there are separate legal bases for

· Article 37 TEC for the European Agricultural Guidance and Guarantee Fund, Guidance Section (now defunct or more precisely replaced and relocated)
· Article 148 TEC for the European Social Fund
.

Two things appear confusing for a reader. Article 159 TEC mentioned three Structural Funds, but they did not include the Cohesion Fund. Thus, the Cohesion Fund would seem to belong to the category ‘other financial existing instruments’, but the Cohesion Fund is actually treated as a structural fund.

On the other hand, the first of the three structural funds mentioned by Article 159 TEC was the European Agricultural Guidance and Guarantee Fund, Guidance Section (in addition to the European Social Fund and the European Regional Development Fund), but the European Agricultural Guidance and Guarantee Fund, Guidance Section has been replaced by the European Agricultural Fund for Rural Development (EAFRD) and fully integrated into the common agricultural policy (CAP).

Anyway, here are the current Articles 161 and 162 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/119–120:

(TITLE XVII
ECONOMIC AND SOCIAL COHESION)


Article 161 TEC

Without prejudice to Article 162, the Council, acting unanimously on a proposal from the Commission and after obtaining the assent of the European Parliament and consulting the Economic and Social Committee and the Committee of the Regions, shall define the tasks, priority objectives and the organisation of the Structural Funds, which may involve grouping the Funds. The Council, acting by the same procedure, shall also define the general rules applicable to them and the provisions necessary to ensure their effectiveness and the coordination of the Funds with one another and with the other existing Financial Instruments.

A Cohesion Fund set up by the Council in accordance with the same procedure shall provide a financial contribution to projects in the fields of environment and trans-European networks in the area of transport infrastructure.

From 1 January 2007, the Council shall act by a qualified majority on a proposal from the Commission after obtaining the assent of the European Parliament and after consulting the Economic and Social Committee and the Committee of the Regions if, by that date, the multiannual financial perspective applicable from 1 January 2007 and the Interinstitutional Agreement relating thereto have been adopted. If such is not the case, the procedure laid down by this paragraph shall apply from the date of their adoption.



Article 162 TEC

Implementing decisions relating to the European Regional Development Fund shall be taken by 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.

With regard to the European Agricultural Guidance and Guarantee Fund, Guidance Section, and the European Social Fund, Articles 37 and 148 respectively shall continue to apply.



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Original Lisbon Treaty (ToL)

Article 2, points 133 and 134 of the Lisbon Treaty amended Articles 161 and 162 TEC respectively 161 (OJEU 17.12.2007 C 306/85):

133) Article 161 shall be amended as follows:

(a) at the beginning of the first paragraph, first sentence, the words ‘Without prejudice to Article 162, the Council, acting unanimously on a proposal from the Commission and after obtaining the assent of the European Parliament’ shall be replaced by ‘Without prejudice to Article 162, the European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure’. In the second sentence the words ‘The Council, acting by the same procedure, shall also define’ shall be deleted at the beginning and the words ‘shall also be defined by the same procedure’ added at the end;

(b) in the second paragraph the words ‘by the Council’ shall be deleted;

(c) the third paragraph shall be deleted.

134) In Article 162, first paragraph, the words ‘implementing decisions’ shall be replaced by ‘implementing regulations’.



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Renumbering ToL

The Table of equivalences of the original Treaty of Lisbon tells us that Title XVII first became Title XVII with the addition of territorial in the TFEU (ToL), and renumbered Title XVIII Economic, social and territorial cohesion in the consolidated version.

Article 161 TEC initially became Article 161 TFEU (ToL) before the renumbering of the treaty made it into Article 177 TFEU in the consolidated version.

Article 162 TEC initially became Article 162 TFEU (ToL) before the renumbering of the treaty made it into Article 178 TFEU in the consolidated version (OJ 17.12.2007 C 306/217).


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Lisbon Treaty consolidated

Article 177 and 178 TFEU

After specific and horizontal amendments the Articles 177 and 178 TFEU appear like this in the consolidated version of the Treaty of Lisbon (OJ 9.5.2008 C 115/128):

(TITLE XVIII
ECONOMIC, SOCIAL AND TERRITORIAL COHESION)


Article 177 TFEU
(ex Article 161 TEC)

Without prejudice to Article 178, the European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure and consulting the Economic and Social Committee and the Committee of the Regions, shall define the tasks, priority objectives and the organisation of the Structural Funds, which may involve grouping the Funds. The general rules applicable to them and the provisions necessary to ensure their effectiveness and the coordination of the Funds with one another and with the other existing Financial Instruments shall also be defined by the same procedure.

A Cohesion Fund set up in accordance with the same procedure shall provide a financial contribution to projects in the fields of environment and trans-European networks in the area of transport infrastructure.


Article 178 TFEU
(ex Article 162 TEC)

Implementing regulations relating to the European Regional Development Fund shall be taken by 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.

With regard to the European Agricultural Guidance and Guarantee Fund, Guidance Section, and the
European Social Fund, Articles 43 and 164 respectively shall continue to apply.



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Secondary legislation 2007–2013

Horizontal Regulations

General Regulation 1083/2006

General rules concerning the structural funds are set out in Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 (OJEU 31.7.2006 L 210/25).

Article 161 TEC is cited as the principal legal base.

The 73 Recitals of Regulation 1083/2006 offer an overview of the aims of the structural funds from 2007 to 2013 and they highlight the changes compared to the previous programming period (2000–2006).

The General Regulation refers to the European Regional Development Fund (ERDF) and to the European Social Fund (ESF) and it integrates the Cohesion Fund ‘into the programming of structural assistance in the interest of greater coherence in the intervention of the various Funds’.

Rural development – through the European Agricultural Fund for Rural Development (EARDF) – and development of the fisheries sector – the European Fisheries Fund (EFF) – was integrated into the common agricultural policy and the common fisheries policy respectively.

In other words, there are differences between the classification (and naming) of the structural funds between the treaty level and the secondary (regulation) level, and this partial lack of similarity would persist under the Lisbon Treaty.


The detailed provisions of the General Regulation are essential for a deeper understanding of the main principles and how the structural funds work.

The Regulations together with a few corrigenda are available at:

http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/newregl0713_en.htm

A consolidated version (1 January 2007) of the General Regulation 1083/2006 is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2006R1083:20070101:EN:PDF


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Implementing Regulation 1828/2006

The Implementing Regulation is clearly at a lower hierarchical level than the General Regulation and it is based on it and the ERDF Regulation, but it is horizontal in character.

The Commission has issued and implementing Regulation 1828/2006 with detailed provisions relating to the General Regulation 1083/2006 and the ERDF Regulation 1080/2006.
Commission Regulation (EC) No 1828/2006 of 8 December 2006 setting out rules for the implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund (OJEU 27.12.2006 L 371/1) is available here:

http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/fsfc/ce_1828(2006)_en.pdf



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Cohesion policy guide

This could be called a horizontal aid, which includes sectoral Regulations.

For people working with the administration of structural funds or with projects co-financed by one of the funds, the Commission’s guide with commentaries and official texts is a very useful resource.

The 164 page publication Cohesion policy 2007–13 Commentaries and official texts is available here:

http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/publications/guide2007_en.pdf

(Two caveats, nearly two years after the start of the 2007 to 2013 programme period: Look above for the remark on corrigenda concerning Regulations and notice that the Cohesion policy guide does not contain the Commission’s Implementing Regulation.)

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Vertical Regulations

In addition to the reference to the Cohesion Guide, here are a few pointers to vertical or sector Regulations.


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ERDF Regulation 1080/2006

The ERDF Regulation, officially Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 (OJEU 31.7.2006 L 210/1), can be found here:

http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/feder/ce_1080(2006)_en.pdf


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European Social Fund (ESF)

The ESF Regulation 1081/2006 is primarily based on Article 148 TEC.
Regulation (EC) No 1081/2006 of the European Parliament and of the Council of 5 July 2006 on the European Social Fund and repealing Regulation (EC) No 1784/1999 (OJEU 31.7.2006 L 210/12) is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:210:0012:0018:EN:PDF


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Cohesion Fund

As we have seen, the Cohesion Fund is in practice treated as a structural fund. The Regulation is based on Article 161(2) TEC.

Council Regulation (EC) No 1084/2006 of 11 July 2006 establishing a Cohesion Fund and repealing Regulation (EC) No 1164/94 (OJEU 31.7.2006 L 210/79) is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:210:0079:0081:EN:PDF


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European grouping of territorial cooperation (EGTC)

Regulation (EC) No 1082/2006 of the European Parliament and of the Council of 5 July 2006 on a European grouping of territorial cooperation (EGTC) (OJEU 31.7.2006 L 210/19) is based on Article 159(3) TEC (referring to specific actions).

The EGTC is an entity for cross-border cooperation, and the EGTC Regulation can be called a legal instrument. It is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:210:0019:0024:EN:PDF


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Rural development and fisheries

EAFRD Rural development


Rural development and fisheries are fully incorporated into the common agricultural policy and the common fisheries policy. In my understanding they fall outside the scope of the structural funds, despite Article 159 TEC (and Article 175 TFEU) referring to the European Agricultural Guidance and Guarantee Fund, Guidance Section, as one of the structural funds.

But they are important in their own spheres, so here are references to the current Regulations.

Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (OJEU 21.2.2005 L 316/10) is available here:


http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:277:0001:0040:EN:PDF


EFF Fisheries


Council Regulation (EC) No 1198/2006 of 27 July 2006 on the European Fisheries Fund (OJEU 15.8.2006 L 223/1) is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:223:0001:0044:EN:PDF




Ralf Grahn

EU Law: Cohesion: Economic and social plus territorial

Economic and social cohesion represents the second largest object of EU expenditure (after the common agricultural policy). Still, it is harder to find a definition of cohesion than descriptions of its components and policy instruments.

The policies are heavily weighted to combat regional disparities, and the Treaty of Lisbon would make express mention of the territorial dimension of cohesion.

Here is a treaty level introduction to the world of economic, social and territorial cohesion.

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Article 158 TEC

Article 158 TEC (ex Article 130a) builds on the concept cohesion without defining it.

This takes the form of efforts to reduce the disparities between various regions. The backwardness of the least favoured regions or islands, including rural areas, is emphasised.

Here is the current Article 158 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/118:

TITLE XVII
ECONOMIC AND SOCIAL COHESION

Article 158 TEC

In order to promote its overall harmonious development, the Community shall develop and pursue its actions leading to the strengthening of its economic and social cohesion.

In particular, the Community shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions or islands, including rural areas.


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Original Lisbon Treaty (ToL)

Although the Treaty of Lisbon is unreadable on its own, it spells out how or if the current treaties are amended.

Sometimes there are no specific amendments, although most of the times one or more of the horizontal amendments apply.

Article 2, points 130 and 131 of the Lisbon Treaty amended the Title heading and Article 158 TEC (OJEU 17.12.2007 C 306/84–85):

ECONOMIC, SOCIAL AND TERRITORIAL COHESION

130) The heading of Title XVII shall be replaced by: ‘ECONOMIC, SOCIAL AND TERRITORIAL COHESION’.

131) Article 158 shall be amended as follows:

(a) in the first paragraph, the words ‘economic and social cohesion’ shall be replaced by ‘economic, social and territorial cohesion’;

(b) in the second paragraph, the words ‘or islands, including rural areas’ shall be deleted;

(c) the following new paragraph shall be added:

‘Among the regions concerned, particular attention shall be paid to rural areas, areas affected by industrial transition, and regions which suffer from severe and permanent natural or demographic handicaps such as the northernmost regions with very low population density and island, cross-border and mountain regions.’.


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Renumbering ToL

The Table of equivalences of the original Treaty of Lisbon tells us that Title XVII first became Title XVII with the addition of territorial in the TFEU (ToL), and renumbered Title XVIII Economic, social and territorial cohesion in the consolidated version.

Article 158 TEC initially became Article 158 TFEU (ToL) before the renumbering of the treaty made it into Article 174 TFEU in the consolidated version (OJ 17.12.2007 C 306/217).


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Lisbon Treaty consolidated

Article 174 TFEU

Territorial has been added to the Title, which has been renumbered. The Article has been renumbered. The Community has been replaced by the Union. The specific amendments have been inserted.

Article 174 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJ 9.5.2008 C 115/127):

TITLE XVIII
ECONOMIC, SOCIAL AND TERRITORIAL COHESION

Article 174 TFEU
(ex Article 158 TEC)

In order to promote its overall harmonious development, the Union shall develop and pursue its actions leading to the strengthening of its economic, social and territorial cohesion.

In particular, the Union shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions.

Among the regions concerned, particular attention shall be paid to rural areas, areas affected by industrial transition, and regions which suffer from severe and permanent natural or demographic handicaps such as the northernmost regions with very low population density and island, cross-border and mountain regions.



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Main changes

Cohesion will henceforth evoke the economic, social and territorial dimensions of a concept not immediately clear to non-French readers. (But the concrete manifestations are measurable in euros.)

The new paragraphs 2 and 3 add up to the corresponding paragraphs of Article III-220 of the Constitutional Treaty.

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EU aims

The third subparagraph of Article 3(3) of the amended Treaty on European Union (TEU) states that the EU shall promote economic, social and territorial cohesion, and solidarity among member states.

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EU powers in general

The powers of the European Union are attributed or conferred by the member states through the treaties (including their aims). The Treaty of Lisbon makes an effort to present the different categories of competence (as they are modestly called) in a systematic manner.

The taxonomy of EU competence is set out in Article 2 TFEU. The three main or general categories are exclusive competence in 2(1), shared competence in 2(2) as well as supporting, coordinating or supplementing competences in 2(5), although the exact scope and arrangements are laid out in the various treaty provisions as stated in 2(6):

Article 2 TFEU

1. When the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the implementation of Union acts.

2. When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Union and the Member States may legislate and adopt legally binding acts in that area. The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence.

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.

4. The Union shall have competence, in accordance with the provisions of the Treaty on European Union, to define and implement a common foreign and security policy, including the progressive framing of a common defence policy.

5. In certain areas and under the conditions laid down in the Treaties, the Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States, without thereby superseding their competence in these areas.

Legally binding acts of the Union adopted on the basis of the provisions of the Treaties relating to these areas shall not entail harmonisation of Member States' laws or regulations.

6. The scope of and arrangements for exercising the Union's competences shall be determined by the provisions of the Treaties relating to each area.



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Article 4 TFEU: Shared competence

Economic, social and territorial cohesion is mentioned among the competences listed as shared in Article 4 TFEU:

Article 4 TFEU

1. The Union shall share competence with the Member States where the Treaties confer on it a competence which does not relate to the areas referred to in Articles 3 and 6.

2. Shared competence between the Union and the Member States applies in the following principal areas:

(a) internal market;

(b) social policy, for the aspects defined in this Treaty;

(c) economic, social and territorial cohesion;

(d) agriculture and fisheries, excluding the conservation of marine biological resources;

(e) environment;

(f) consumer protection;

(g) transport;

(h) trans-European networks;

(i) energy;

(j) area of freedom, security and justice;

(k) common safety concerns in public health matters, for the aspects defined in this Treaty.

3. In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.

4. In the areas of development cooperation and humanitarian aid, the Union shall have competence to carry out activities and conduct a common policy; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.

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Declaration 33

The intergovernmental conference approved a Declaration (33) on island states:
33. Declaration on Article 174 of the Treaty on the Functioning of the European Union

The Conference considers that the reference in Article 174 to island regions can include island States in their entirety, subject to the necessary criteria being met.


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Cohesion

The concept cohesion seems to be rather elusive, but concrete policy instruments and budget lines are easier to come by. Here is the description offered by the Scadplus (Europa Glossary) web page Economic, social and territorial cohesion (no date given):

http://europa.eu/scadplus/glossary/economic_social_cohesion_en.htm




Ralf Grahn

EU Law: Trans-European Networks (TENs)

Since the Roman roads, the importance of good communications has been evident. Transport, energy and telecommunications infrastructure is crucial to the internal market and to cross-border contacts, fostering cohesion.

Although the aims of the European Union seem to be greater than the means, “carrot money” has achieved some progress in improving European networks.

We look at how trans-European networks (TENs) are treated at treaty level, before presenting gateways to further information.


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Article 154 TEC

Article 154 (ex Article 129b) on trans-European networks links them to the objectives referred to in Articles 14 and 158 TEC.

The objective of Article 14 TEC is the internal market, potentially an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured.

The objective of Article 158 TEC is the strengthening of economic and social cohesion, especially reducing the backwardness of the least favoured regions or islands, including rural areas.

Three crucial areas of infrastructure fall within the scope of TENs: transport, telecommunications and energy networks.

The aim is to achieve cross-border effects, by promoting the interconnection and interoperability of national networks. Access to such networks is also promoted.

In line with the territorial and social cohesion objectives, the need to link island, landlocked and peripheral regions with the central regions of the Community is stressed.




Here is the current Article 154 (ex Article 129b) of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/116:

TITLE XV
TRANS-EUROPEAN NETWORKS

Article 154 TEC

1. To help achieve the objectives referred to in Articles 14 and 158 and to enable citizens of the Union, economic operators and regional and local communities to derive full benefit from the setting-up of an area without internal frontiers, the Community shall contribute to the establishment and development of trans-European networks in the areas of transport, telecommunications and energy infrastructures.

2. Within the framework of a system of open and competitive markets, action by the Community shall aim at promoting the interconnection and interoperability of national networks as well as access to such networks. It shall take account in particular of the need to link island, landlocked and peripheral regions with the central regions of the Community.


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Original Lisbon Treaty (ToL)

Although the Treaty of Lisbon is unreadable on its own, it spells out how the current treaties are amended.

Sometimes there are no specific amendments, although most of the times one or more of the horizontal amendments apply.

Article 2, point 128 of the Lisbon Treaty dealt with consumer protection in Article 153 TEC and point 129 concerns industry, in Article 157 TEC (OJ 17.12.2007 C 306/84).

In other words, Articles 154 to 156 TEC (ex Articles 129b, 129c and 129d) with provisions on trans-European networks were not affected by specific amendments.


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Renumbering ToL

The Table of equivalences of the original Treaty of Lisbon tells us that Title XV first became Title XV in the TFEU (ToL), but renumbered Title XVI Trans-European networks in the consolidated version.

Article 154 TEC initially became Article 154 TFEU (ToL) before the renumbering of the treaty made it into Article 170 TFEU in the consolidated version (OJ 17.12.2007 C 306/217).


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Lisbon Treaty consolidated

Article 170 TFEU

After renumbering the Title and the Article as well as the referrals and the customary (horizontal) replacement of Community by Union, Article 170 TFEU shapes up like this in the consolidated version of the Treaty of Lisbon (OJ 9.5.2008 C 115/124–125):


TITLE XVI
TRANS-EUROPEAN NETWORKS

Article 170 TFEU
(ex Article 154 TEC)

1. To help achieve the objectives referred to in Articles 26 and 174 and to enable citizens of the Union, economic operators and regional and local communities to derive full benefit from the setting-up of an area without internal frontiers, the Union shall contribute to the establishment and development of trans-European networks in the areas of transport, telecommunications and energy infrastructures.

2. Within the framework of a system of open and competitive markets, action by the Union shall aim at promoting the interconnection and interoperability of national networks as well as access to such networks. It shall take account in particular of the need to link island, landlocked and peripheral regions with the central regions of the Union.


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Cohesion

Article 170 TFEU refers to Article 174 TFEU, which has undergone a change. The Lisbon Treaty has included territorial cohesion, so the aim is now to strengthen economic, social and territorial cohesion.

(Those interested in this change may wish to look at the activities of Michel Barnier, then Commission member responsible for Regional policy, during the European Convention. Currently Barnier is Minister for Agriculture in the French Government.)

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EU powers

The powers of the European Union are attributed or conferred by the member states through the treaties. The Treaty of Lisbon makes an effort to present the different categories of competence (as they are modestly called) in a systematic manner.

The categories of EU competence (taxonomy) are set out in Article 2 TFEU. The three main or general categories are exclusive competence in 2(1), shared competence in 2(2) as well as supporting, coordinating or supplementing competences in 2(5), although the exact scope and arrangements are laid out in the various treaty provisions as stated in 2(6):

Article 2 TFEU

1. When the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the implementation of Union acts.

2. When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Union and the Member States may legislate and adopt legally binding acts in that area. The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence.

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.

4. The Union shall have competence, in accordance with the provisions of the Treaty on European Union, to define and implement a common foreign and security policy, including the progressive framing of a common defence policy.

5. In certain areas and under the conditions laid down in the Treaties, the Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States, without thereby superseding their competence in these areas.

Legally binding acts of the Union adopted on the basis of the provisions of the Treaties relating to these areas shall not entail harmonisation of Member States' laws or regulations.

6. The scope of and arrangements for exercising the Union's competences shall be determined by the provisions of the Treaties relating to each area.



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Article 4 TFEU

As an area of shared competence between the EU and the member states, Article 4(2)(h) mentions trans-European networks.

Because the TENs can be seen as flanking measures to other aims and policies, we can mention the internal market, economic, social and territorial cohesion, transport and energy among the competences listed as shared in Article 4 TFEU:

Article 4 TFEU

1. The Union shall share competence with the Member States where the Treaties confer on it a competence which does not relate to the areas referred to in Articles 3 and 6.

2. Shared competence between the Union and the Member States applies in the following principal areas:

(a) internal market;

(b) social policy, for the aspects defined in this Treaty;

(c) economic, social and territorial cohesion;

(d) agriculture and fisheries, excluding the conservation of marine biological resources;

(e) environment;

(f) consumer protection;

(g) transport;

(h) trans-European networks;

(i) energy;

(j) area of freedom, security and justice;

(k) common safety concerns in public health matters, for the aspects defined in this Treaty.

3. In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.

4. In the areas of development cooperation and humanitarian aid, the Union shall have competence to carry out activities and conduct a common policy; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.

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Absentee: Telecommunications

The reader may have noticed that the areas of competence listed as exclusive, shared or supporting do not mention telecommunications specifically.

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Summary of legislation: Trans-European networks

On the Commission’s Scadplus web pages with summaries of legislation, the page Trans-European networks offers links to pages with guidelines concerning transport, energy and telecommunications networks, including Community funding:

http://europa.eu/scadplus/leg/en/s06019.htm



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Commission activities

Commission activities and news can be approached through the web page Trans-European Networks:

http://ec.europa.eu/ten/index_en.html

The TENs are split among the Directorate-General for Energy and Transport and the administratively somewhat more amorphous Information Society pages, so you might want to check them too.


Ralf Grahn

EU: The European Social Fund

Since the 1957 Treaty establishing the European Economic Community the European Social Fund (ESF) has endeavoured to make the jobless of today into the workers of tomorrow.


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Article 146 TEC

Article 146 TEC (ex Article 123) states the transformational aim of the European Social Fund. Located in Chapter 2 The European Social Fund, under the current Title XI Social policy, education, vocational training and youth, the main aim of the ESF is to improve employment opportunities for workers in the internal market and to contribute to raising the standard of living.

At a more concrete level, the aim of the ESF is to

– render the employment of workers easier
– increase their geographical mobility
– increase their occupational mobility
– facilitate their adaptation to industrial changes and changes in production systems.

The European Social Fund operates especially through vocational training and retraining.

These objectives bring to mind several related aims of the European Community, such as free movement of persons (in the internal market), social and territorial cohesion, employment, vocational training and since 2000 the Lisbon Strategy for Growth and Jobs.

The current Article 146 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/111:

Article 146 TEC

In order to improve employment opportunities for workers in the internal market and to contribute thereby to raising the standard of living, a European Social Fund is hereby established in accordance with the provisions set out below; it shall aim to render the employment of workers easier and to increase their geographical and occupational mobility within the Community, and to facilitate their adaptation to industrial changes and to changes in production systems, in particular through vocational training and retraining.



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Original Lisbon Treaty (ToL)

Article 2, point 121 of the original Treaty of Lisbon (ToL) makes Chapter 2 on the European Social Fund into a Title of its own (OJ 17.12.2007 C 306/82):

EUROPEAN SOCIAL FUND

121) Chapter 2 shall be renumbered TITLE X.


This means that Article 146 TEC undergoes no specific amendments. The ‘Community’ is replaced by the ‘Union’ according to the horizontal amendment mentioned in point 2(a) on page 42.

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Renumbering ToL

The Table of equivalences of the original Treaty of Lisbon tells us that the Chapter on the European Social Fund was to become Title XI. Article 146 TEC first became Article 146 TFEU (ToL), then to be renumbered Article 162 TFEU in the consolidated versions of the amending treaties (OJ 17.12.2007 C 306/216–217).


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Consolidated Lisbon Treaty

The renumbered Article with the horizontal amendment replacing ‘Community’ by ‘Union’, Article 162 of the Treaty on the Functioning of the European Union (TFEU), appears as follows in the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/119:


TITLE XI
THE EUROPEAN SOCIAL FUND

Article 162 TFEU
(ex Article 146 TEC)

In order to improve employment opportunities for workers in the internal market and to contribute thereby to raising the standard of living, a European Social Fund is hereby established in accordance with the provisions set out below; it shall aim to render the employment of workers easier and to increase their geographical and occupational mobility within the Union, and to facilitate their adaptation to industrial changes and to changes in production systems, in particular through vocational training and retraining.


***

Cohesion

The Lisbon Treaty places the European Social Fund within the context of strengthening economic, social and territorial cohesion within the European Union (Article 174 TFEU).

Article 175(1) TFEU includes the ESF among the instruments to support these aims:

Article 175 TFEU
(ex Article 159 TEC)

Member States shall conduct their economic policies and shall coordinate them in such a way as, in addition, to attain the objectives set out in Article 174. The formulation and implementation of the Union's policies and actions and the implementation of the internal market shall take into account the objectives set out in Article 174 and shall contribute to their achievement. The Union shall also support the achievement of these objectives by the action it takes through the Structural Funds (European Agricultural Guidance and Guarantee Fund, Guidance Section; European Social Fund; European Regional Development Fund), the European Investment Bank and the other existing Financial Instruments.

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ESF summary

Within the treaty framework, the European Social Fund has not only contributed to adaptation by workers, but adapted itself to evolving Community priorities. Ahead of the current programmes, from 2007, the Commission’s Scadplus web page offered the following summary of the ESF norms (latest update 2 January 2006):

http://europa.eu/scadplus/leg/en/lvb/g24232.htm

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Commission

The Commission’s Directorate-General Employment, Social Affairs and Equal Opportunities offers a portal to the European Social Fund:

http://ec.europa.eu/employment_social/esf/index_en.htm

The ESF’s role in promoting the Lisbon Strategy for Growth and Jobs is clearly emphasised.



Ralf Grahn

EU Treaty of Lisbon: European Council

If the European Union is a ship, the European Council represents the shipowners. The existing Treaty on European Union (TEU; latest consolidated version OJ 29.12.2006, C 321 E) Article 4 presents the tasks, the membership and the reporting of the European Council, without formally making it one of the EU institutions:

“Article 4

The European Council shall provide the Union with the necessary impetus for its development and shall define the general political guidelines thereof.

The European Council shall bring together the Heads of State or Government of the Member States and the President of the Commission. They shall be assisted by the Ministers for Foreign Affairs of the Member States and by a Member of the Commission. The European Council shall meet at least twice a year, under the chairmanship of the Head of State or Government of the Member State which holds the Presidency of the Council.

The European Council shall submit to the European Parliament a report after each of its meetings and a yearly written report on the progress achieved by the Union.”

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The Convention included the European Council among the institutions and proposed two Articles. The first one, I-20, reiterated the present tasks of the European Council, but clarified that it does not exercise legislative functions. The basic membership (Heads of State or Government) was the same, but the new chairman (President) was mentioned. The Ministers for Foreign Affairs would have lost their membership; their participation would have become optional. This was intended to bring back something of the informal beginnings as “fireside chats” which were becoming impossible with more than fifty participants in an enlarged Union.

The European Council would have met every three months. Extraordinary meetings would have been possible. Decisions would have been made by consensus, if the Constitution did not provide otherwise. The difference between “consensus” and “unanimity” was not elaborated.

The second provision proposed by the Convention, Article I-21, concerned the new semi-permanent President of the European Council, elected for two and a half years (renewable once) and replacing the chairmanship of the current six month Presidency of the Council. This was a victory for those who wanted the European Council to steer a clearer course and to safeguard continuity in action. One of the innovations in this direction was that the President could not hold a national office at the same time. (On the other hand, uniting the offices of President of the European Council and of the Commission remained a possibility.)

The Treaty establishing a Constitution for Europe (OJ 16.12.2004, C 310) took on board most of the proposals made by the Convention, in Artcles I-21 and I-22. The national Ministers for Foreign Affairs, whose participation was becoming optional, lost their monopoly to participate if ministers were needed. For instance, the ministers representing the member states in the evolving General Affairs Council, or the Ministers for Finance or the Economy could have participated depending on the theme of the meeting. (The spring European Council, with the economic reforms and the Lisbon strategy on the agenda could offer an example, as well as future meetings dedicated to the area of freedom, security and justice.)

The intergovernmental conference (IGC 2007) decided to merge two Articles into one, Article 9b. There are minor differences. In Article 9b(2) the “Union Minister for Foreign Affairs” has become the “High Representative of the Union for Foreign Affairs and Security Policy”. In Article 9b(3) the quarterly meetings have become somewhat more flexible: meetings twice every six months. Otherwise, the changes are minimal compared to the Constitutional Treaty.

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Like all institutions, the European Council is reminded of the “common good”: The Union shall have an institutional framework which shall aim to promote its values, advance its objectives, serve its interests, those of its citizens and those of the Member States, and ensure the consistency, effectiveness and continuity of its policies and actions. Article 9(1) TEU.

The wording follows the structure of the amended TEU and advances more or less in the same order from values to objectives and further to the interests of the citizens of the Union and of its Member States.

Consistency, effectiveness and continuity are mentioned as essential guidelines for decision making.

Is this shocking? Every successful organisation needs a modicum of team play. Even if the members of the European Council represent the particular interests of the Member States all of the time, these national leaders have to make the effort to find the common interests that bind them together, at least for about eight days yearly.

Without the strategic direction given by the European Council, the European Union would come to nought.

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The crucial reform of the Lisbon Treaty concerning the European Council, in addition to formal status as an institution, is the semi-permanent President.

He or she shall chair the meetings and drive forward the work of the European Council. The President ensures the preparation and continuity of its work and tries to facilitate cohesion and consensus. The President takes over the reporting to the European Parliament, as well. The President represents the Union “at his level and in that capacity” on issues concerning the foreign and security policy of the European Union.

Gone will be the days when an active President or Prime Minister of a Member State had to juggle his national obligations with the task to drive forward the European Council and to represent it both substantially and ceremonially.

***

The Treaty of Lisbon creates a demanding square between the new President of the European Council, the partly new “double-hatted” High Representative/Vice President of the Commission, the existing President of the European Commission and the somewhat devalued rotating Presidency of the Council, in charge of the General Affairs Council and the ‘ordinary’ Council formations (if separate persons head the European Council and the Commission).

On the whole, the Lisbon Treaty seems to strengthen the intergovernmental traits of the European Union. The President of the European Council is the potential new star, firmly embedded in an intergovernmental setting, and it looks more probable that the High Representative is going to extend the power of the Council into the Commission, than the other way around.

***

Much will depend on the choice of persons and their capacity to interact. Despite the bland wording of joint Declaration (number 6) on Article 9 B(5) and (6), Article 9 D (6) and (7) and Article 9 E of the Treaty on European Union, the jockeying for positions can be expected to be intense. The Protocol says:

“In choosing the persons called upon to hold the offices of President of the European Council, President of the Commission and High Representative of the Union for Foreign Affairs and Security Policy, due account is to be taken of the need to respect the geographical and demographic diversity of the Union and its Member States.”

Taken at face value, the “geographical and demographic diversity” of the EU and its Member States refer to the map and population size, but in reality the political aspects are preponderant. Should the persons to be chosen represent the values of the integrationist core or halfway houses outside the Eurozone, the Schengen area, the Charter of Fundamental Rights and readiness to promote a common defence based on dual EU and NATO membership?

***

The Treaty of Lisbon (OJ 17.12.2007, C 306) inserts an Article 9b.

Article 9b


1. The European Council shall provide the Union with the necessary impetus for its development and shall define the general political directions and priorities thereof. It shall not exercise legislative functions.

2. The European Council shall consist of the Heads of State or Government of the Member States, together with its President and the President of the Commission. The High Representative of the Union for Foreign Affairs and Security Policy shall take part in its work.

3. The European Council shall meet twice every six months, convened by its President. When the agenda so requires, the members of the European Council may decide each to be assisted by a minister and, in the case of the President of the Commission, by a member of the Commission. When the situation so requires, the President shall convene a special meeting of the European Council.

4. Except where the Treaties provide otherwise, decisions of the European Council shall be taken by consensus.

5. The European Council shall elect its President, by a qualified majority, for a term of two and a half years, renewable once. In the event of an impediment or serious misconduct, the European Council can end the President's term of office in accordance with the same procedure.

6. The President of the European Council:

(a) shall chair it and drive forward its work;

(b) shall ensure the preparation and continuity of the work of the European Council in cooperation with the President of the Commission, and on the basis of the work of the General Affairs Council;

(c) shall endeavour to facilitate cohesion and consensus within the European Council;

(d) shall present a report to the European Parliament after each of the meetings of the European Council.

The President of the European Council shall, at his level and in that capacity, ensure the external representation of the Union on issues concerning its common foreign and security policy, without prejudice to the powers of the High Representative of the Union for Foreign Affairs and Security Policy.

The President of the European Council shall not hold a national office.

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In my next instalment I turn to the Council.


Ralf Grahn