European Council: Economic policy reform priorities III

Having looked at the Annual Growth Survey (AGS) from the Commission in Part One and EU 2020 macroeconomic and fiscal guidance offered by the Ecofin Council in Part Two, we turn to another submerged part of the iceberg, awkwardly acknowledged by the Europan Council, in footnote 1 to paragraph 2:

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.

Source:

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


EPSCO Council 7 March 2011

EPSO Council, I presume? (Cf Sir Henry Morton Stanley)

Only the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) seems to have convened on 7 March 2011.

Having identified the Council configuration, we head for its conclusions, by now available in 22 official EU languages; here English:

3073rd Council meeting Employment, Social Policy, Health and Consumer Affairs (Employment and Social Policy); Brussels, 7 March 2011 (Council document 7360/11)

See also Grahnlaw: EU Council (EPSCO): EU2020 and March European Council.

Although the EPSCO Council discussed European Council issues under several subheadings in the conclusions and in a number of separate documents, mentioned on the pages from 7 to 12, the first paragraph on page 7 gives us a rough indication of the meeting:

The Council held a policy debate on issues relevant to the annual growth survey (AGS) and to the European Semester, namely the joint employment report (JER) and guidelines for the employment policies of the member states, and on items linked to the Europe 2020 strategy, i.e. the "European platform against poverty and social exclusion" and the main messages of the report on the social dimension of the strategy. The results of this debate and the joint employment report are to be submitted to the European Council of 24/25 March as part of EPSCO's Council contribution.

Joint Employment Report

The Council adopted the Joint Employment Report (JER), required annually by the Treaty:

Joint Employment Report; Brussels, 8 March 2011 (as adopted by the Council (EPSCO) at its session on 7 March 2011) (Council document 7396/11; 26 pages)

See also Grahnlaw: EU Joint Employment Report (JER) heading for spring summit.


Employment policy guidance

Praiseworthy, as in the case of the JER, the link in the EPSCO general conclusions now leads to the final version of the document, as adopted by EPSCO on 7 March 2011:

The Joint Employment Report in the context of the Annual Growth Survey 2011: political guidance on employment policies - Council Conclusions; Brussels, 8 March 2011 (Council document 7397/11; 7 pages)

Worryingly, already the first evaluation of the Europe 2020 strategy indicated that the draft National Reform Programmes (NPR) collectively fell short of the EU2020 targets for a 75 per cent employment rate as well as for lifting 20 million people out of the risk of poverty and exclusion by 2020.


Employment guidelines

The employment guidelines for 2011, to be formally adopted soon after the European Council, will be substantially the same as in 2010. Actually they said in the 2010 guidelines that they wanted minimal changes until the end of 2014:

Proposal for a Council Decision on guidelines for the employment policies of the Member States - General approach; Brussels, 2 March 2011 (Council document 6192/2/11 REV 2)

Interinstitutional File: 2011/0007 (CNS)

See also Grahnlaw Suomi Finland: EU employment policy guidelines 2011: How annual can you get? (includes link to the existing guidelines, Council decision 2010/707/EU)


Platform against poverty and social exclusion


The EPSCO Council adopted conclusions on the European platform against poverty and social exclusion (7434/1/11), establishing its position on the key elements of the Commission flagship initiative. Again we find that the offered link leads to the final version of the document, as adopted by the EPSCO Council on 7 March 2011:

The European Platform against Poverty and Social Exclusion: a European framework for social and territorial cohesion - Council Conclusions; Brussels, 9 March 2011 (Council document 7434/1/11 REV 1; 8 pages)

In addition, the EPSCO Council endorsed the opinion of the Social Protection Committee (SPC):

Contribution to the European Council (24-25 March 2011): - The European Platform against Poverty and Social Exclusion Flagship Initiative of the Europe 2020 Strategy = Opinion of the Social Protection Committee; Brussels, 15 February 2011 (Council document 6491/11; 5 pages)


Social dimension of EU2020

The EPSCO Council also endorsed the main messages of the report about the social dimension of the Europe 2020 strategy, drafted by the SPC:

Contribution to the European Council (24-25 March 2011): - Assessment of the social dimension of the Europe 2020 Strategy: 2011 report of the Social Protection Committee = Main messages of the report; Brussels, 18 February 2011 (Council document 6624/11; 4 pages)

The full report from which these main messages are drawn is:

SPC Assessment of the social dimension of the Europe 2020 Strategy (2011) - Full report; Brussels, 18 February 2011 (Council document 6624/11 ADD 1; 50 pages)


Comments

The European Council fails to make clear choices based on public proposals, leaves submitted documents without acknowledgement, avoids linking to relevant conclusions and documents, and does not even identify the important documents clearly. Low points for user-friendliness, as well as communication skills and motivation to engage citizens.

Three blog posts down, but we do not know for sure what the official EU institution called the European Council endorses and – more importantly – where it omits its support.

Management by osmosis?



Ralf Grahn



P.S. Advance voting starts in two days and polling day is only two weeks away, but well governed, competitive and fairly social Finland looks different. Suddenly, one out of five Finns want to make a mental return trip to the 1950's by voting for the True Finns. Helsingin Sanomat International tries to explain.

European strategy for jobs and growth: Credible implementation? (European Council 17 June 2010)

In the previous blog post we saw the European Council 17 June 2010 confirm the five headline targets of the Europe 2020 strategy.

In addition, the European Council politically endorsed the integrated guidelines for economic and employment policies (Conclusions point 3, page 3):

The guidelines will continue to be the basis for any country-specific recommendations that the Council may address to Member States. These recommendations shall be fully in line with relevant Treaty provisions and EU rules and shall not alter Member States' competences, for example in areas such as education.

After the wasted Lisbon strategy decade, is this going to ensure real growth-enhancing reform in the member states, especially those with the worst track record and the greatest need?

How is it going to be different between now and 2020?



National Reform Programmes

According to the European Council, the National Reform Programmes (NRPs) are – as before – the main vehicle to turn words into action. Regular review was part and parcel of the Lisbon strategy, so are there indications of credible improvement?

The conclusions of the European Council state (point 4, page 3):

Member States must now act to implement these policy priorities at their level. They should, in close dialogue with the Commission, rapidly finalise their national targets, taking account of their relative starting positions and national circumstances, and according to their national decision-making procedures. They should also identify the main bottlenecks to growth and indicate, in their National Reform Programmes, how they intend to tackle them. Progress towards the headline targets will be regularly reviewed.

Ecofin overview




The preceding conclusions by the Economic and Financial Affairs Council (Ecofin) on 8 June 2010 on the European 2020 strategy go some way towards offering a picture of the whole and updating information on the state of play (document 10881/10).

Ecofin presented a summary of what the Europe 2020 strategy is about (point 2, page 2):

At the core of the new strategy is a framework for enhanced co-ordination of Member States' economic policies building on widened country surveillance which covers all relevant macroeconomic and structural policy areas in an integrated fashion. This strengthened framework should facilitate the immediate launch of exit strategies and address the urgent need for fiscal consolidation both in the short and over the medium term, through growth-friendly budgetary consolidation strategies focused on expenditure restraint, and be combined with the implementation of long-term policies to tackle bottlenecks to growth.

Ecofin mentions widened, enhanced, strengthened, reinforced and more integrated coordination of economic policies and the Europe 2020 strategy, but are we able to discern decisive new factors ensuring future success?



Seeing is believing

After the Lisbon strategy, the joint credibility account of the member states, the Council and the European Council is in overdraft.

The European Council’s conclusions on the new European strategy for jobs and growth, including the Europe 2020 strategy and the integrated guidelines for economic and employment policies, fall short of changing the perception.

I am ready to believe in improved surveillance, when I see concrete reforms put into practice.



In his invitation letter to the heads of state or government, president Herman Van Rompuy promised to outline to some ideas on what the forthcoming meetings of the European Council should achieve, in order to optimise their preparation.

Can we expect fresh “impetus”?




Ralf Grahn

EU: TFEU Policy coordination

The systematic approach towards competences of the European Union in the Treaty of Lisbon includes mandatory coordination of member states policies in two important areas, economic and employment policies, with an option to take coordinating initiatives in a third, social policies.

Drafting novelties for better presentation do not necessarily change the way the European Union works. A mechanical comparison between the Lisbon Treaty and the Constitution is therefore of limited value, unless we elucidate the substantial changes or lack of them, and consider what they mean in relation to the present treaties, the ones which actually are amended.

To contribute to the knowledge of all sides about the EU and its workings, regardless of the recipients’ (and the comparer’s) preconceived views, these comparisons have to be made as objectively as possible.

In addition, I allow myself both value judgments and banter, trying to make clear when I am writing in objective and when in subjective mode. (Today’s epistle is not especially representative of the latter, being almost wholly factual in tone.)

***

In the Treaty of Lisbon (ToL) the intergovernmental conference inserted a new Article 2d TFEU (OJ 17.12.2007 C 306/47):

Article 2d TFEU (ToL), to be renumbered 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.

***

Since many visitors seem to be interested in the similarities and differences between the Lisbon Treaty and the Constitution, we can track the history backwards until we reach the existing treaties, the ones actually being amended.

The Treaty establishing a Constitution for Europe contained the following Article I-15 The coordination of economic and employment policies (OJ 16.12.2004 C 310/17):

Article I-15
The coordination of economic and employment policies

1. The Member States shall coordinate their economic policies within the Union. To this end, the Council of Ministers 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.

***

We can conclude that the Lisbon Treaty has taken over this Article of the Constitutional Treaty unchanged.

The following stop is the European Convention and its draft Treaty establishing a Constitution for Europe, where the corresponding provision is Article I-14 (OJ 18.7.2003 C 169/11):

Article 14
The coordination of economic and employment policies

1. The Union shall adopt measures to ensure coordination of the economic policies of the Member States, in particular by adopting broad guidelines for these policies. The Member States shall coordinate their economic policies within the Union.

2. Specific provisions shall apply to those Member States which have adopted the euro.

3. The Union shall adopt measures to ensure coordination of the employment policies of the Member States, in particular by adopting guidelines for these policies.

4. The Union may adopt initiatives to ensure coordination of Member States' social policies.

***

Basically, the new Article was introduced by the Convention, although the IGC 2004 made some editorial changes. Paragraph 1 of each version seems to indicate some substantial shift, the Constitution being slightly more wishy-washy than its predecessor.

***

Coordination of member states’ economic policies, including the broad economic policy guidelines, is firmly based in the current TEC, where Articles 98 and 99 offers a range of activities (for the latest consolidated version of the TEU and TEC, go to OJ 29.12.2006 C 321 E/82-83):

CHAPTER 1 TEC
ECONOMIC POLICY

Article 98

Member States shall conduct their economic policies with a view to contributing to the achievement of the objectives of the Community, as defined in Article 2, and in the context of the broad guidelines referred to in Article 99(2). The Member States and the Community shall act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, and in compliance with the principles set out in Article 4.

Article 99

1. Member States shall regard their economic policies as a matter of common concern and shall coordinate them within the Council, in accordance with the provisions of Article 98.

2. The Council shall, acting by a qualified majority on a recommendation from the Commission, formulate a draft for the broad guidelines of the economic policies of the Member States and of the Community, and shall report its findings to the European Council.

The European Council shall, acting on the basis of the report from the Council, discuss a conclusion on the broad guidelines of the economic policies of the Member States and of the Community.

On the basis of this conclusion, the Council shall, acting by a qualified majority, adopt a recommendation setting out these broad guidelines. The Council shall inform the European Parliament of its recommendation.

3. In order to ensure closer coordination of economic policies and sustained convergence of the economic performances of the Member States, the Council shall, on the basis of reports submitted by the Commission, monitor economic developments in each of the Member States and in the Community as well as the consistency of economic policies with the broad guidelines referred to in paragraph 2, and regularly carry out an overall assessment.

For the purpose of this multilateral surveillance, Member States shall forward information to the Commission about important measures taken by them in the field of their economic policy and such other information as they deem necessary.

4. Where it is established, under the procedure referred to in paragraph 3, that the economic policies of a Member State are not consistent with the broad guidelines referred to in paragraph 2 or that they risk jeopardising the proper functioning of economic and monetary union, the Council may, acting by a qualified majority on a recommendation from the Commission, make the necessary recommendations to the Member State concerned. The Council may, acting by a qualified majority on a proposal from the Commission, decide to make its recommendations public.

The President of the Council and the Commission shall report to the European Parliament on the results of multilateral surveillance. The President of the Council may be invited to appear before the competent committee of the European Parliament if the Council has made its recommendations public.

5. The Council, acting in accordance with the procedure referred to in Article 252, may adopt detailed rules for the multilateral surveillance procedure referred to in paragraphs 3 and 4 of this Article.

***

The interested reader can find additional information in the following official documents:

Council Recommendation 2005/601/EC of 12 July 2005 on the broad economic policy guidelines of the Member States and the Community (2005 – 2008) (OJ 6.8.2005 L 205)

Council Recommendation 2007/209/EC of 27 March 2007 on the 2007 update of the broad guidelines for the economic policies of the Member States and the Community and on the implementation of Member States' employment policies (OJ 3.4.2007 L 92)

There is a convenient presentation of the Broad economic policy guidelines (2005 – 2008) available on the Commission’s Scadplus web pages:

http://europa.eu/scadplus/leg/en/lvb/l25078.htm

***
Specific provisions apply to those Member States whose currency is the euro. Monetary policy for the Eurozone is an exclusive EU competence according to the TFEU. How the members belonging to the Eurozone handle their economic policies has direct implications for the monetary policy.

We are going to encounter the detailed provisions later, but at this stage I will only draw your attention to the Protocol on the Euro Group annexed to the Lisbon Treaty, with informal meetings of the (Finance) Ministers and a President elected for two and a half years, an arrangement currently in use (OJ 17.12.2007 C 306/151):

PROTOCOL
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.

***

After living a life on their own, the employment policy guidelines have been integrated with the Broad Economic Policy Guidelines. For a introduction you could visit the Scadplus web pages of the Commission, Employment policy guidelines (2005 – 2008):

http://europa.eu/scadplus/leg/en/cha/c11323.htm

***

Whereas economic policy and employment policy coordination are mandatory, the coordination of member states’ social policies is an option.

For an overview of DG Employment, Social Affairs and Equal Opportunities, you could start from the DG’s homepage:

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

***

I hope that this presentation has supported, coordinated or supplemented your knowledge of EU competences. Anyway, these are the competences we are going to look at next time.


Ralf Grahn