Tuesday 30 September 2008

EU: Privileged access prohibited I

Price stability and budget restraint lie at the heart of economic and monetary union (EMU).

Article 102 of the Treaty establishing the European Community (TEC) prohibits privileged access to financial institutions by European Community institutions and member states’ public authorities.

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Article 102 (ex Article 104a) of the Treaty establishing the European Community (TEC) is found in the latest consolidated version of the current treaties, published in the Official Journal of the European Union (OJ) 29.12.2006 C 321 E/84:

Part Three – Community policies

Title VII – Economic and monetary policy

Chapter 1 – Economic policy

Article 102 TEC

1. Any measure, not based on prudential considerations, establishing privileged access by Community institutions or bodies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States to financial institutions, shall be prohibited.

2. The Council, acting in accordance with the procedure referred to in Article 252, shall, before 1 January 1994, specify definitions for the application of the prohibition referred to in paragraph 1.

***

While much of economic policy coordination can be described as “soft law”, Article 102 TEC (originally Article 104a) is one of the hard rules aiming at price stability by cutting off public entities’ possibilities to legislate or administer their access to credit on more advantageous terms than their economic situation allows for. Thus, the public sector (governments at all levels and public undertakings) is subject to market realities when financing budget deficits.

Article 102 TEC is in force and directly applicable from 1 January 1994, the date mentioned for the specifying definitions in paragraph 2. At the present time, economic and monetary union (EMU) is one of the rare areas where the cooperation procedure (Article 252 TEC) still finds application.

***

Detailed rules are contained in Council Regulation (EC) No 3604/93 of 13 December 1993 specifying definitions for the application of the prohibition of privileged access referred to in Article 104a of the Treaty (OJ 31.12.1993 L 332/4–6).

The recital states that Article 104a is “an essential element of the submission of the public sector in its financing operations to the discipline of the market mechanism and so makes a contribution to the strengthening of budgetary discipline; whereas, moreover, it places the Member States on an equal footing as regards public sector access to financial institutions”.

In Article 1, Regulation 3604/93 defines 'any measure establishing privileged access', which includes obligations of financial institutions to acquire or hold public sector debt or confers tax advantages on financial institutions holding such debt.

There are exceptions to the prohibition, notably concerning social housing and disaster relief (paragraph 2).

Prudential considerations are described in Article 2 as having to be “consistent with EC law and designed to promote the soundness of financial institutions so as to strengthen the stability of the financial system as a whole and the protection of the customers of those institutions”.

Public undertakings are defined in Article 3 and financial institutions in Article 4 of Regulation 3604/93.

***

Next, we look at the corresponding proposal of the European Convention.


Ralf Grahn

EU: Overdraft facilities prohibited VI

When the OECD countries seem to be gliding into recession or at least slower growth, strained public finances are going to take further hits. Desperate times will surely bring forth calls for desperate measures, such as monetary financing.

The previous posting showed the dearth of UK references to Article 123 of the Treaty on the Functioning of the European Union (TFEU), but are the legislative materials from Sweden and Finland more illuminating, when we deal with a provision essentially unchanged?

Perhaps legislative documents could be more generous in reminding their readers of the ‘acquis communautaire’ (community patrimony), in addition to highlighting the amendments at hand. All of a sudden the existing rules have to be remembered…

***


Sweden

The consultation paper ’Lissabonfördraget’ was the first official Swedish description of the Lisbon Treaty amendments, and it is available at:

http://www.regeringen.se/content/1/c6/09/49/81/107aa077.pdf

It was followed by the Swedish government’s draft ratification bill ‘Lagrådsremiss – Lissabonfördraget’, published 29 May 2008:

http://www.regeringen.se/sb/d/5676/a/106277

The draft bill was given a green light by the Council on Legislation (Lagrådet):

http://www.lagradet.se/yttranden/Lissabonfordraget.pdf

The latest official government view, and now my standard reference for Sweden, is the ratification bill (Regeringens proposition 2007/08:168 Lissabonfördraget; 3 July 2008):

http://www.regeringen.se/content/1/c6/10/84/02/8c96cf3e.pdf

The Swedish parliament (Riksdagen) is expected to decide on approval in late autumn, probably November.

Economic and monetary policy (23.2 Ekonomisk och monetär politik) is discussed on pages 180 to 185. The Swedish government explains the basic rules in Article 101 TFEU (ToL), on page 184:

”I artiklarna 101–103 i EG-fördraget finns bestämmelser om förbud för Europeiska centralbanken (ECB) och nationella centralbanker att ge de gemensamma institutionerna eller de nationella offentliga organen, inklusive statsägda företag, rätt att övertrassera sina konton eller ge dem andra former av krediter. ECB eller centralbankerna får inte heller direkt från dem förvärva skuldförbindelser. En positiv särbehandling av gemenskapsorgan eller nationella offentliga institutioner eller företag är likaså förbjuden. ”

***

Finland

The Finnish ratification bill, ‘Hallituksen esitys Eduskunnalle Euroopan unionista tehdyn sopimuksen ja Euroopan yhteisön perustamissopimuksen muuttamisesta tehdyn Lissabonin sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 23/2008 vp), discusses economic and monetary policy (Talous- ja rahapolitiikka) on pages 209 to 214.

The ratification bill briefly remarks on the unchanged nature of Article 101 TFEU (ToL), renumbered Article 123 TFEU (page 210):

”101 artiklaa (uusi 123 artikla), joka koskee Euroopan keskuspankin ja jäsenvaltioiden keskuspankkien tilinylitysoikeuksia ja muita luottojärjestelyjä, ei muuteta.”

The Finnish ratification bill is available at:

http://www.finlex.fi/fi/esitykset/he/2008/20080023.pdf


The Swedish language version of the ratification bill ‘Regeringens proposition till Riksdagen med förslag om godkännande av Lissabonfördraget om ändring av fördraget om Europeiska unionen och fördraget om upprättandet av Europeiska gemenskapen och till lag om sättande i kraft av de bestämmelser i fördraget som hör till området för lagstiftningen’ (RP 23/2008 rd), makes the same remarks under ’Ekonomisk och monetär politik’ about Article 100 TFEU (ToL), the future Article 122 TFEU, on page 213:

” Artikel 101 (blivande artikel 123), som gäller Europeiska centralbankens och medlemsstaternas centralbankers rätt att övertrassera sina konton och andra kreditarrangemang, ändras inte.”

The ratification bill in Swedish can be accessed at:

http://www.finlex.fi/sv/esitykset/he/2008/20080023.pdf

***

France

Étienne de Poncins offers a few general comments on EU economic governance and budget matters, ‘La gouvernance économique et les questions budgétaires’ in his ‘Le traité de Lisbonne en 27 clés’ (Éditions Lignes de Repères, 2008), page 245─251.

Austria

‚Der Vertrag von Lissabon‘, by Klemens H. Fischer (Nomos, Stämpfli & Verlag Österreich, 2008), traces the amendments Article by Article; here on page 264. The horizontal amendments are described as „mandatsbedingt redaktionell geändert“.




France

François-Xavier Priollaud and David Siritzky offer a short introductory explanation on economic and monetary policy (pages 246 and 247) and on economic policy coordination, including the treaty amendments (pages 248 to 250) in their book ‘Le traité de Lisbonne – Commentaire, article par article, des nouveaux traités européens (TUE et TFUE)’ (La Documentation française, Paris, 2008), but I found no comment on monetary financing.

***

Europa web site

The Europa web site offers links to various topics concerning EU ‘Economic and Monetary Affairs’:

http://europa.eu/pol/emu/index_en.htm

***

ECB

The prohibition on overdraft facilities is far from new, but there are still adjustments to make in some of the newer member states.

Here is an excerpt from the European Central Bank’s press release ‘Publication of the ECB Convergence Report 2008’ (7 May 2008):

“Legislation in Bulgaria, the Czech Republic, Latvia, Hungary, Poland, Romania and Sweden does not comply with all the requirements for central bank independence or legal integration into the Eurosystem. In addition, legislation in Bulgaria, the Czech Republic, Latvia, Hungary, Poland and Romania does not fully comply with the monetary financing prohibition.”

The ECB press release is available at:

http://www.ecb.int/press/pr/date/2008/html/pr080507.en.html
The European Central Bank’s ‘Convergence Report May 2008’ is available in 22 EU languages. The English version can be accessed at:

http://www.ecb.europa.eu/pub/pdf/conrep/cr200805en.pdf

Section 2.2.4 ‘Prohibition on monetary financing and privileged access’, from page 22, offers an illuminating view of Article 101 TEC (and Article 123 TFEU).


Ralf Grahn

EU: Overdraft facilities prohibited V

Member states’ monetary financing by overdraft facilities is prohibited by Article 123 of the Treaty on the Functioning of the European Union (TFEU).

Even if the Lisbon Treaty brings no substantial change, we check some materials with reference to the provision.

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United Kingdom

Professor Steve Peers covered the Treaty of Lisbon in a number of Statewatch Analyses. ‘EU Reform Treaty Analysis no. 3.4: Revised text of Part Three, Titles VII to XVII of the Treaty establishing the European Community (TEC): Other internal EC policies’ (Version 2, 24 October 2007) includes the current Title VII Economic and monetary policy.

Peers presented Article 101 TFEU (ToL), to be renumbered Article 123 TFEU in the consolidated version, and highlighted the other horizontal changes except ‘offices or agencies’, without comment (page 7).

The analysis 3.4 and other useful Statewatch analyses are available through:

http://www.statewatch.org/euconstitution.htm


***

The Foreign and Commonwealth Office (FCO) offers a convenient source of brief annotations on Lisbon Treaty amendments in ‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon’ (Command Paper 7311, published 21 January 2008). It offers the following comment on Article 123 TFEU, Article 101 TFEU (ToL) in the original Lisbon Treaty (page 12):

“In substance the same as Article 101 TEC, but now includes a reference to agencies” [as well as to offices].


The FCO comparative table is available at:

http://www.official-documents.gov.uk/document/cm73/7311/7311.asp

***

The UK House of Commons Library Research Paper 07/86 ‘The Treaty of Lisbon: amendments to the Treaty establishing the European Community’ (published 6 December 2007) discussed ‘H. Economic and Monetary Policy’ on pages 61 to 64, but I did not find any remark on Article 101 TFEU (ToL).


The Library Research Paper 07/86 is available at:

http://www.parliament.uk/commons/lib/research/rp2007/rp07-086.pdf

***

I found no references to overdraft or Article 123 in the House of Lords European Union Committee’s report ‘The Treaty of Lisbon: an impact assessment, Volume I: Report’ (HL Paper 62-I, published 13 March 2008).


The impact assessment report is accessible at:

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeucom/62/62.pdf


***

The following part is going to present additional legislative materials on Article 123 TFEU.


Ralf Grahn

Monday 29 September 2008

EU: Overdraft facilities prohibited IV

Article 101 of the Treaty establishing the European Community (TEC) underwent no substantial change during the European Convention and the IGC 2004.

The following intergovernmental conference (IGC 2007), leading to the EU Treaty of Lisbon, had nothing to add to the prohibition on monetary financing.

***

The present Treaty establishing the European Community (TEC) was to become the Treaty on the Functioning of the European Union (TFEU), and generally the innovations as agreed in the 2004 IGC were to be inserted into the Treaty by way of specific modifications ‘in the usual manner’ (points 17 and 18, pages 6 and 7).

But Article III-181 of the Constitutional Treaty contained no ‘innovations’. Check the mandate of the intergovernmental conference (IGC 2007 Mandate, Council document 11218/07, 26 June 2007).

***

In Article 2, point 87 of the original Treaty of Lisbon (ToL) the IGC 2007 amended Article 100 TEC, and in point 88 it dealt with Article 102, so there were no express amendments with regard to Article 101 TEC (OJ 17.12.2007 C 306/71).

***

The TFEU table of equivalences confirms that Article 101 TEC became Article 101 TFEU (ToL) in the original Treaty of Lisbon and it was later renumbered Article 123 TFEU in the consolidated version, under the title ‘Economic and monetary policy’ renumbered Title VIII (OJ 17.12.2007 C 306/211─212).

***

Article 123 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 115/99:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 1 Economic policy

Article 123 TFEU (Lisbon Treaty)
(ex Article 101 TEC)

1. Overdraft facilities or any other type of credit facility with the European Central Bank or with
the central banks of the Member States (hereinafter referred to as ‘national central banks’) in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments.

2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions.

***

‘European Central Bank’ instead of ‘ECB’, ‘Union’ replacing ‘Community’ and ‘institutions or bodies’ expanding into ‘institutions, bodies, offices or agencies’ are all so called horizontal amendments mentioned in Article 2 of the Treaty of Lisbon (OJ 17.12.2007 C 306/41─42). Otherwise Article 123 TFEU and Article 101 TEC are identical.

***

The following instalment is going to verify the essentially unchanged nature of Article 123 TFEU by taking a look at some materials.


Ralf Grahn

EU: Overdraft facilities prohibited III

Central banks have been pouring liquidity into the markets, but at least the public sector in the EU countries is barred from monetary financing.

In the Treaty establishing a Constitution for Europe, signed by all, but approved internally by 18 member states before ratification stalled, the provisions on economic policy were located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 1 ‘Economic policy’.

Article III-181 is found in OJ 16.12.2004 C 310/78:

Article III-181 Constitution

1. Overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as ‘national central banks’) in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments.

2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions.

***

We are able to see that Article III-181 of the Constitutional Treaty only added Union ‘offices’ to the first paragraph. Otherwise the provision was identical with Article III-73 of the draft Constitution and almost the same as the current Article 101 TEC.

***

Legislative materials tend to concentrate on the novelties, so the results of following random checks
are hardly surprising.

The Swedish government memorandum ‘Fördraget om upprättande av en konstitution för Europa’ (Utrikesdepartemetet, Departementsserien (Ds) 2004:52, december 2004) described the signed Constitutional Treaty, but I found no comment on Article III-181.

The same applies to the draft ratification bill in Sweden ‘Lagrådsremiss ─ Fördraget om upprättande av en konstitution för Europa’ (Ds 2004:52, 2 June 2005).

***

The government of Finland laid out the Constitutional Treaty in its ratification bill ‘Hallituksen esitys Eduskunnalle Euroopan perustuslaista tehdyn sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 67/2006 vp). On page 183 Article III-181 was stated to be substantially the same as Article 101 TEC:

”III-181 artikla, jossa kielletään niin sanottu keskuspankkirahoitus, vastaa asiasisällöltään SEY 101 artiklaa.”

***

The same remark can be found in Swedish, in ’Regeringens proposition till Riksdagen med förslag om godkännande av Fördraget om upprättande av en konstitution för Europa och till lag om sättande i kraft av de bestämmelser i fördraget som hör till området för lagstiftningen (RP 67/2006 rd), page 187:

”Innehållet i artikel III-181, som förbjuder s.k. centralbanksfinansiering, motsvarar i sak artikel 101 i EG-fördraget.”

***

Klemens H. Fischer in ‘Der Europäische Verfassungsvertrag‘ (Nomos, Stämpfli & Manz, 2005), page 310, makes the observations that „Artikel III-181 EUVV korrespondiert mit Artikel 101 EGV“ and „Artikel III-181 EUVV korrespondiert mit Artikel III-73 VVE“.

***

Both the texts of the Articles and the (lack of) comments have shown that there was no substantial change between the current TEC and the Constitutional Treaty.

The next instalment turns to the IGC 2007 and the Lisbon Treaty.



Ralf Grahn

EU: Overdraft facilities prohibited II

We turn to the European Convention, the closest thing to a constituent assembly EU citizens have had since the 1950s and 1980s. The proposed Article corresponding to Article 101 TEC is located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 1 ‘Economic policy’.

Article III-73 of the draft Treaty establishing a Constitution for Europe, OJ 18.7.2003 C 169/40:

Article III-73 Draft Constitution

1. Overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as ‘national central banks’) in favour of Union institutions, bodies or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments.

2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions.

***

The draft Constitution followed the current TEC text closely, with the customary terminological differences, such as the ‘European Central Bank’ replacing the ‘ECB’.

The government of Sweden presented its views on the draft Constitution in ‘Europeiska konventet om EU:s framtid’ (Utrikesdepartementet, Departementsserien (Ds) 2003:58, 2003), but I found no comment regarding the essentially unchanged Article III-73.

***

Ahead of the intergovernmental conference (IGC 2003─2004), the government of Sweden stated its positions on economic policy provisions, in ‘Europeiska konventet om EU:s framtid’ (Regeringens skrivelse 2003/04:13, den 2 oktober 2003), on pages 49─50, but there was no comment on Article III-73.

***

Likewise, ‘A Constitutional Treaty for the EU ─ The British Approach to the European Union Intergovernmental Conference 2003’ (FCO, Cm5934, September 2003) was silent on Article III-73 of the draft Constitution.

***

Étienne de Poncins presented the proposed text of Article III-73 of the draft Constitution in ‘Vers une Constitution européenne’ (Éditions 10/18, 2003), page 295, without comment.

***

In the following instalment we look at the prohibition against government borrowing from central banks ─ monetary financing ─ in the Constitutional Treaty.


Ralf Grahn

Sunday 28 September 2008

EU: Overdraft facilities prohibited I

In order to promote financial and budgetary discipline, the economic and monetary union (EMU) prohibits overdraft facilities by member states or their public entities from the European Central Bank (ECB) or the national central banks.

Article 101 of the Treaty establishing the European Community (TEC) is one of the provisions aiming at fiscal discipline through the independence of central banks.


***

Article 101 of the Treaty establishing the European Community (TEC) is found in the latest consolidated version of the current treaties, published in the Official Journal of the European Union 29.12.2006 C 321 E/83─84:

Part Three – Community policies

Title VII – Economic and monetary policy

Chapter 1 – Economic policy

Article 101 TEC

1. Overdraft facilities or any other type of credit facility with the ECB or with the central banks of the Member States (hereinafter referred to as ‘national central banks’) in favour of Community institutions or bodies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the ECB or national central banks of debt instruments.

2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the ECB as private credit institutions.

***

The current Article 101 TEC was introduced, as Article 104, by the Treaty on European Union, also known as the Treaty of Maastricht (OJ 29.7.1992 C 191).

The Europa web portal offers an overview of the ‘Treaty of Maastricht on European Union’:

http://europa.eu/scadplus/treaties/maastricht_en.htm

The text of the Maastricht Treaty is available at (although only the OJ text is legally binding):

http://eur-lex.europa.eu/en/treaties/dat/11992M/htm/11992M.html

***

Here are a few examples of materials on economic and monetary union (EMU), and the EU’s fiscal rules in general:

A general introduction to economic and monetary union (EMU), with further useful references, is found in Paul Craig & Gráinne de Búrca, ‘EU Law ─ Text, Cases, and Materials’ (Oxford University Press, 4th edition, 2008), pages 728─742.

Anthony Annett & Albert Jaeger: Europe’s Quest for Fiscal Discipline ─ Will the Stability and Growth Pact help Europe find the right balance between fiscal discipline and flexibility? (IMF, Finance & Development, June 2004):

http://imf.org/external/pubs/ft/fandd/2004/06/pdf/annett.pdf

Ludger Schuknecht: EU Fiscal Rules ─ Issues and Lessons from Political Economy (European Central Bank, Working Paper Series No 421, December 2004) looks at “soft law” convergence versus fiscal sovereignty:

http://www.ecb.int/pub/pdf/scpwps/ecbwp421.pdf

The current financial turmoil is reflected in the newspaper article by Matthew Saltmarsh ‘EU budget rules face test with downturn’ (International Herald Tribune, 9 September 2008):

http://www.iht.com/articles/2008/09/09/business/budget.php?page=2?pass=true

***

The prohibitions underpinning fiscal discipline are briefly depicted in the following books:

Kari Joutsamo, Pekka Aalto, Heidi Kaila & Antti Maunu in ‘Eurooppaoikeus’ (Kauppakaari, 2000) presents the background in Finnish in the chapter ‘Talous- ja rahaliitto EMU’ (pages 740─766), especially the section on economic policy ’15.4 Talouspolitiikka’(pages 755─760), with the provisions on budgetary discipline on page 758.

Bernhard Nagel: Wirtschaftsrecht der Europäischen Union (Nomos, 4. Auflage, 2003) explains Article 101 TEC in the following terms:

„Einer der Kernpunkte der Unabhängigkeit der EZB ist das Verbot der Kreditgewährung an die EG oder die EG-Mitgliedstaaten. Die Mitgliedstaaten können von der Europäischen Zentralbank keine Überziehungskredite erhalten. Damit ist den Mitgliedstaaten erstens der Einsatz der Notenpresse zur Finanzierung ihrer Defizite verwehrt (vgl. Art. 101 und Art. 116 Abs. 3 EG).“

***

The Europa web portal offers a presentation ‘Prohibition on the central banks granting credit facilities to public authorities and undertakings’:

http://eur-lex.europa.eu/en/treaties/dat/11992M/htm/11992M.html

The text of Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions referred to in Articles 104 and 104b (1) of the Treaty (OJ 31.12.1993 L 332) is available at:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31993R3603:EN:HTML

***

What constitutes a prohibited overdraft facility? The question is not purely theoretical, as shown by the fresh Opinion of the European Central Bank of 9 September 2008 at the request of the Austrian Federal Ministry of Finance on a draft Federal law providing for an Austrian contribution to the HIPC-Trust Fund for Liberia’s debt relief (CON/2008/41), available at:

http://www.ecb.int/ecb/legal/pdf/en_con_2008_41.pdf

***

Next, we look at the corresponding proposal of the European Convention.


Ralf Grahn

EU: Economic crisis management VI

Energy supply, severe economic difficulties and solidarity have the makings of an interesting testing ground for the European Union in the years ahead.

The previous posting mentioned some UK references to Article 122 of the Treaty on the Functioning of the European Union (TFEU). We now turn to legislative materials from Sweden and Finland as well as some commentaries in book form.

***


Sweden

The consultation paper ’Lissabonfördraget’ was the first official Swedish description of the Lisbon Treaty amendments, and it is available at:

http://www.regeringen.se/content/1/c6/09/49/81/107aa077.pdf

It was followed by the Swedish government’s draft ratification bill ‘Lagrådsremiss – Lissabonfördraget’, published 29 May 2008:

http://www.regeringen.se/sb/d/5676/a/106277

The draft bill was given a green light by the Council on Legislation (Lagrådet):

http://www.lagradet.se/yttranden/Lissabonfordraget.pdf

The latest official government view, and now my standard reference for Sweden, is the ratification bill, with the Swedish parliament (Riksdagen) expected to decide on approval in late autumn, probably November (Regeringens proposition 2007/08:168 Lissabonfördraget; 3 July 2008):

http://www.regeringen.se/content/1/c6/10/84/02/8c96cf3e.pdf

Economic and monetary policy (23.2 Ekonomisk och monetary politik) is discussed on pages 180 to 185. The Swedish government explains what Article 100 TFEU (ToL) changes, highlighting the spirit of solidarity and the area of energy supply (on page 182):

“I nu gällande EG-fördrag finns en bestämmelse om att rådet kan besluta om lämpliga åtgärder med hänsyn till det ekonomiska läget, särskilt om det uppstår allvarliga försörjningsproblem i fråga om vissa varor. Genom Lissabonfördraget införs bestämmelser om att åtgärderna ska beslutas i en anda av solidaritet mellan medlemsstaterna och när det gäller allvarliga försörjningsproblem i fråga om vissa varor framhålls särskilt energiområdet (artikel 100 i EUF-fördraget).”

***

By the way, EU citizens, including proponents of the philosophy of autarky, may note that the Swedish ratification bill mentions ‘energi’ (energy) 98 times (admittedly including all references to the European Atomic Energy Community) and ‘solidaritet’ (solidarity) 41 times.

***

Finland

The Finnish ratification bill, ‘Hallituksen esitys Eduskunnalle Euroopan unionista tehdyn sopimuksen ja Euroopan yhteisön perustamissopimuksen muuttamisesta tehdyn Lissabonin sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 23/2008 vp), discusses economic and monetary policy (Talous- ja rahapolitiikka) on pages 209 to 214.

The ratification bill briefly describes the changes to Article 100 TFEU (ToL), renumbered Article 122 TFEU, namely the spirit of solidarity and the energy area. Otherwise the Article is essentially the same as Article III-180 of the Constitutional Treaty and Article 100 TEC (page 210):

”100 artiklaan (uusi 122 artikla), joka antaa neuvostolle poikkeusvaltuudet taloudellisissa erityistilanteissa, on lisätty vuoden 2007 HVK:ssa päätöksenteon tapahtuvan ”yhteisvastuun”
hengessä ja silloin kun tavaroiden saatavuudessa ilmenee vaikeuksia ”ennen kaikkea energia-alalla”. Muilta osin määräys vastaa perustuslakisopimuksen III-180 artiklaa ja SEY 100 artiklaa.”

The Finnish ratification bill is available at:

http://www.finlex.fi/fi/esitykset/he/2008/20080023.pdf


The Swedish language version of the ratification bill ‘Regeringens proposition till Riksdagen med förslag om godkännande av Lissabonfördraget om ändring av fördraget om Europeiska unionen och fördraget om upprättandet av Europeiska gemenskapen och till lag om sättande i kraft av de bestämmelser i fördraget som hör till området för lagstiftningen’ (RP 23/2008 rd), makes the same remarks under ’Ekonomisk och monetär politik’ on Article 100 TFEU (ToL), the future Article 122 TFEU, on page 213.

The ratification bill in Swedish can be accessed at:

http://www.finlex.fi/sv/esitykset/he/2008/20080023.pdf

***

France

Étienne de Poncins offers a few general comments on EU economic governance and budget matters, ‘La gouvernance économique et les questions budgétaires’ in his ‘Le traité de Lisbonne en 27 clés’ (Éditions Lignes de Repères, 2008), pages 245─251.

Austria

‚Der Vertrag von Lissabon‘, by Klemens H. Fischer (Nomos, Stämpfli & Verlag Österreich, 2008), traces the amendments Article by Article; here on pages 263─264. His comment mentions „Energiebereich“ but he does not highlight the new reference to „im Geiste der Solidarität zwischen den Mitgliedstaaten“ in his comment, although it appears in the text of the provision.

France

François-Xavier Priollaud and David Siritzky offer a short introductory explanation on economic and monetary policy (pages 246 and 247) and on economic policy coordination, including the treaty amendments (pages 248 to 250) in their book ‘Le traité de Lisbonne – Commentaire, article par article, des nouveaux traités européens (TUE et TFUE)’ (La Documentation française, Paris, 2008).

***

Readers, who want to look at the larger picture of EU energy politics and policies at the treaty level, can turn their attention from Article 122 TFEU with its fallback provisions on economic crisis management to the Lisbon Treaty’s TFEU Part Three Title XXI Energy.

Sweden

Beyond the treaty level, in an even broader context, we point to the upcoming topical seminar ‘The Politicisation of Energy Security’, hosted by SIEPS, the Swedish Institute for European Policy Studies. In Stockholm 9 October 2008, “SIEPS will present the analysis EU Energy Policy in a Supply-constrained World written by Jacques de Jong and Coby van der Linde. The analysis covers the fundamental changes that are taking place in world energy markets and explores the consequences of tight markets and the return of government in energy matters and concludes with outlining the new challenges to EU energy policy-making.”

For additional information, go to:

http://www.sieps.se/sem/2008/sem_1009b/sem_1009b.en.html

The Netherlands

CIEP, the highly active Clingendael International Energy Programme, where the authors of the forthcoming report work, offers a host of energy related publications and activities:

http://www.clingendael.nl/ciep/

The Europa web site

The introductory web page on European Union activities concerning energy contains a number of links to the interested reader:

http://europa.eu/pol/ener/index_en.htm



Ralf Grahn

EU: Economic crisis management V

What has been said about the spirit of solidarity and distinct mention of energy in the context of severe difficulties in the supply of products in Article 122 of the Treaty on the Functioning of the European Union (TFEU)?

***

United Kingdom

Professor Steve Peers covered the Treaty of Lisbon in a number of Statewatch Analyses. ‘EU Reform Treaty Analysis no. 3.4: Revised text of Part Three, Titles VII to XVII of the Treaty establishing the European Community (TEC): Other internal EC policies’ (Version 2, 24 October 2007) includes the current Title VII Economic and monetary policy.

Peers presented Article 100 TFEU (ToL), to be renumbered Article 122 TFEU in the consolidated version, and highlighted the changes, with the following comment (page 7):

“The new wording in paragraph 1 has been inserted in accordance with the mandate for the Reform Treaty.”

The analysis 3.4 and other useful Statewatch analyses are available through:

http://www.statewatch.org/euconstitution.htm


***

The Foreign and Commonwealth Office (FCO) offers a convenient source of brief annotations on Lisbon Treaty amendments in ‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon’ (Command Paper 7311, published 21 January 2008). It offers the following comment on Article 122 TFEU, Article 100 TFEU (ToL) in the original Lisbon Treaty (page 12):

“Draws on Article 100 TEC. The references to solidarity and energy are new.”


The FCO comparative table is available at:

http://www.official-documents.gov.uk/document/cm73/7311/7311.asp

***

The UK House of Commons Library Research Paper 07/86 ‘The Treaty of Lisbon: amendments to the Treaty establishing the European Community’ (published 6 December 2007) discussed ‘H. Economic and Monetary Policy’ on pages 61 to 64.

Article 100 TFEU (ToL) was given the following explanation, on page 62:

“Lisbon Article 100 adds to both the present Article and Constitution Article III-180 an explicit emphasis on difficulties with energy supply in Council solidarity measures.”

The Library Research Paper 07/86 is available at:

http://www.parliament.uk/commons/lib/research/rp2007/rp07-086.pdf

***

The House of Lords European Union Committee report ‘The Treaty of Lisbon: an impact assessment, Volume I: Report’ (HL Paper 62-I, published 13 March 2008) dealt with energy on pages 220─221.

The report mentioned the new Title on energy and added the following remark (page 220):

“9.28. A further reference to energy is made in the amended Article 122 of the TFEU which allows the Council to enact measures in “a spirit of solidarity” if severe difficulties of supply arise, particularly within the energy sector.”

On the following page the report presented a few assessments by witnesses under the subheading Solidarity, although the Committee’s own conclusion on the energy provisions as a whole was cautious:

“9.33. The new provisions in the Lisbon Treaty may raise the profile of the issue of energy but they do not constitute a major innovation. However the extension of QMV may be seen as significant.”

The impact assessment report is accessible at:

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeucom/62/62.pdf


***

The following part is going to present additional legislative materials on Article 122 TFEU.


Ralf Grahn

Saturday 27 September 2008

Lisbon Treaty ratification: Four hurdles

Pjotr Maciej Kaczýnski, Sebastian Kurpas and Peadar ó Broin have analysed the state of play in four EU member states, where the ratification of the Treaty of Lisbon is on hold. ‘Ratification of the Lisbon Treaty ─ Ireland is not the only problem’ (EPIN Working Paper No. 18, published 24 September 2008; 16 pages) is available for downloading at:

http://shop.ceps.eu/BookDetail.php?item_id=1716

The issues and the coalitions for and against ratification in Ireland, Germany, the Czech Republic and Poland are treated in some detail, which makes the publication essential reading for everyone interested in the uncertain future of European integration.

Sweden is mentioned briefly, but the autonomous areas Gibraltar (United Kingdom) and the Åland Islands (Finland) remain outside the scope of the paper.


Ralf Grahn

EU: Economic crisis management IV

Article 100 of the Treaty establishing the European Community (TEC), as amended by the Treaty of Nice, underwent no substantial change during the European Convention and the IGC 2004.

The following intergovernmental conference (IGC 2007), leading to the EU Treaty of Lisbon, took a fresh look at the provision. Europe’s increasing dependence on oligopolistic oil and gas producers and the need to address energy security together led to two additions.

***

The present Treaty establishing the European Community (TEC) was to become the Treaty on the Functioning of the European Union (TFEU), and generally the innovations as agreed in the 2004 IGC were to be inserted into the Treaty by way of specific modifications ‘in the usual manner’ (points 17 and 18, pages 6 and 7). But Article III-180 of the Constitutional Treaty contained no ‘innovations’.

The mandate of the intergovernmental conference (IGC 2007 Mandate, Council document 11218/07, 26 June 2007) is one of the rare instances, where the IGC 2007 agreed to innovate on its own. The vulnerability of the European Union concerning oil and gas imports (as well as the problems of climate change) were taken up ahead of the formal conference.

The IGC 2007 Mandate mentioned Article 100 TEC in point ‘m’ on page 8:

“m) In Article 100 (measures in case of severe difficulties in the supply of certain products), a reference to the spirit of solidarity between Member States and to the particular case of energy as regards difficulties in the supply of certain product will be inserted (see point 3) of Annex 2).”

In Annex 2 (page 16) we find the following text:

3) In Article 100, replacement of paragraph 1 with the following:

"1. Without prejudice to any other procedures provided for in the Treaties, the Council, on a proposal from the Commission, may decide, in a spirit of solidarity between Member States, upon the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products, notably in the area of energy."

***

In Article 2, point 87 of the original Treaty of Lisbon (ToL) the IGC 2007 dutifully amended Article 100 TEC (OJ 17.12.2007 C 306/71):

DIFFICULTIES IN THE SUPPLY OF CERTAIN PRODUCTS (ENERGY)

87) In Article 100, paragraph 1 shall be replaced by the following:

‘1. Without prejudice to any other procedures provided for in the Treaties, the Council, on
a proposal from the Commission, may decide, in a spirit of solidarity between Member States,
upon the measures appropriate to the economic situation, in particular if severe difficulties
arise in the supply of certain products, notably in the area of energy.’.

***

We notice the two essential additions: solidarity and energy, more precisely ‘in a spirit of solidarity between Member States’ and ‘notably in the area of energy’.

***

The TFEU table of equivalences confirms that the new Article 100 TFEU (ToL) in the original Treaty of Lisbon was later renumbered Article 122 TFEU in the consolidated version, under the title ‘Economic and monetary policy’ renumbered Title VIII (OJ 17.12.2007 C 306/211─212).

***

Article 122 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 115/98:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 1 Economic policy

Article 122 TFEU (Lisbon Treaty)
(ex Article 100 TEC)

1. Without prejudice to any other procedures provided for in the Treaties, the Council, on a proposal from the Commission, may decide, in a spirit of solidarity between Member States, upon the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products, notably in the area of energy.

2. Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council, on a proposal from the Commission, may grant, under certain conditions, Union financial assistance to the Member State concerned. The President of the Council shall inform the European Parliament of the decision taken.

***

The following instalment is going to take a look at some comments concerning Article 122 TFEU.


Ralf Grahn

EU: Economic crisis management III

In the Treaty establishing a Constitution for Europe, signed by all, but approved internally by 18 member states before ratification stalled, the provisions on economic policy were located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 1 ‘Economic policy’.

Article III-180 is found in OJ 16.12.2004 C 310/77:

Article III-180 Constitution

1. Without prejudice to any other procedures provided for in the Constitution, the Council, on a proposal from the Commission, may adopt a European decision laying down measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products.

2. Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council, on a proposal from the Commission, may adopt a European decision granting, under certain conditions, Union financial assistance to the Member State concerned. The President of the Council shall inform the European Parliament of the decision adopted.

***

We have been able to see that Article III-180 of the Constitutional Treaty is practically the same as Article III-72 of the draft Constitution and the current Article 100 TEC.

***

The Swedish government memorandum ‘Fördraget om upprättande av en konstitution för Europa’ (Utrikesdepartemetet, Departementsserien (Ds) 2004:52, december 2004) described the signed Constitutional Treaty, but I found no comment on Article III-180.

***

The government of Finland laid out the Constitutional Treaty in its ratification bill ‘Hallituksen esitys Eduskunnalle Euroopan perustuslaista tehdyn sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 67/2006 vp). On page 183 Article III-180 was stated to be substantially the same as Article 100 TEC:

”III-180 artikla, joka antaa neuvostolle poikkeusvaltuudet taloudellisissa erityistilanteissa, vastaa asiasisällöltään SEY 100 artiklaa.”

***

The same remark can be found in Swedish, in ’Regeringens proposition till Riksdagen med förslag om godkännande av Fördraget om upprättande av en konstitution för Europa och till lag om sättande i kraft av de bestämmelser i fördraget som hör till området för lagstiftningen (RP 67/2006 rd), page 187:

”Innehållet i artikel III-180, som ger rådet undantagsbefogenheter i ekonomiska specialsituationer, motsvarar i sak artikel 100 i EG-fördraget.”

***

Klemens H. Fischer in ‘Der Europäische Verfassungsvertrag‘ (Nomos, Stämpfli & Manz, 2005), page 309, makes the observations that „Artikel III-180 EUVV korrespondiert mit Artikel 100 EGV“ and „Artikel III-180 EUVV korrespondiert mit Artikel III-72 VVE“.

***

Both the texts of the Articles and the (lack of) comments have shown that there was no substantial change between the current TEC and the Constitutional Treaty.

The next instalment turns to the IGC 2004 and the Lisbon Treaty.



Ralf Grahn

Friday 26 September 2008

EU: Economic crisis management II

We turn to the European Convention, the closest thing to a constituent assembly EU citizens have had since the 1950s and 1980s. The proposed Article corresponding to Article 100 TEC is located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 1 ‘Economic policy’.

Article III-72 of the draft Treaty establishing a Constitution for Europe, OJ 18.7.2003 C 169/40:

Article III-72 Draft Constitution

1. Without prejudice to any other procedures provided for by the Constitution, the Council of Ministers, on a proposal from the Commission, may adopt a European decision laying down the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products.

2. Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council of Ministers, on a proposal from the Commission, may adopt a European decision granting, under certain conditions, Union financial assistance to the Member State concerned. The President of the Council of Ministers shall inform the European Parliament of the decision adopted.

***

The draft Constitution followed the current TEC text closely, with the customary terminological differences and a few stylistic changes.

The government of Sweden ─ a country outside the Eurozone ─ presented its views on the draft Constitution in ‘Europeiska konventet om EU:s framtid’ (Utrikesdepartementet, Departementsserien (Ds) 2003:58, 2003), but I found no comment regarding the essentially unchanged Article III-72.


***

Ahead of the intergovernmental conference (IGC 2003─2004), the government of Sweden stated its positions on economic policy provisions, in ‘Europeiska konventet om EU:s framtid’ (Regeringens skrivelse 2003/04:13, den 2 oktober 2003), on pages 49─50, but there was no comment on Article III-72.

***

Étienne de Poncins presented the proposed text of Article III-72 of the draft Constitution in ‘Vers une Constitution européenne’ (Éditions 10/18, 2003), page 294─295, without comment.

***

In the following instalment we look at the corresponding text on severe economic difficulties in the Constitutional Treaty.


Ralf Grahn

EU: Economic crisis management I

Article 100 of the Treaty establishing the European Community (TEC) offers a fallback provision concerning economic crises. First, it allows measures not foreseen by other provisions, especially if severe difficulties arise in the supply of certain products. Second, financial assistance may be granted to a member state in economic difficulties caused by natural disasters or exceptional circumstances.

***

Article 100 of the Treaty establishing the European Community (TEC) is found in the latest consolidated version of the current treaties, published in the Official Journal of the European Union 29.12.2006 C 321 E/83:

Part Three – Community policies

Title VII – Economic and monetary policy

Chapter 1 – Economic policy

Article 100 TEC

1. Without prejudice to any other procedures provided for in this Treaty, the Council, acting by a qualified majority on a proposal from the Commission, may decide upon the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products.

2. Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council, acting by a qualified majority on a proposal from the Commission, may grant, under certain conditions, Community financial assistance to the Member State concerned. The President of the Council shall inform the European Parliament of the decision taken.

***

The current Article 100 TEC stands as amended by the Treaty of Nice (OJ 10.3.2001 C 80/1).

The Swedish government’s ratification bill ‘Nicefördraget’ (Regeringens proposition 2001/02:8, 13 september 2001) laid out the purpose and amendments in the following way (page 63):

”8.2.4 Ekonomisk politik (artikel 100)
I dag kan rådet med enhällighet besluta om att ge ekonomiskt bistånd till en medlemsstat om det uppstår allvarliga försörjningsproblem eller om en medlemsstat har eller hotas av svårigheter utanför dess kontroll. Om svårigheterna har orsakats av naturkatastrofer beslutar rådet i dag med kvalificerad majoritet.

Regeringskonferensen: Ordförandeskapet tog initiativ till en övergång till kvalificerad majoritet för hela artikeln med motiveringen att det skulle underlätta beslut om ekonomiskt bistånd. Regeringen ansåg att en övergång till kvalificerad majoritet var motiverad i de fall det rörde sig om allvarliga försörjningsproblem. Kvalificerade majoritetsbeslut vid allvarliga störningar vad gäller försörjning av vissa varor torde underlätta möjligheterna till stöd från EU i dessa lägen. Regeringen kunde också acceptera kvalificerad majoritet i de andra fallen eftersom den inte ansåg att det fanns någon större risk för att ett beslut skulle fattas utan att ett verkligt behov förelåg.

Förhandlingsresultatet: Resultatet av förhandlingarna (artikel 2.5 i Nicefördraget) blev att rådet kan besluta med kvalificerad majoritet vad gäller alla fall av ekonomiskt bistånd som omfattas av artikel 100.

En gemensam förklaring (6) om artikel 100 antogs av regeringskonferensen. Förklaringen innebär att beslut om ekonomiskt bistånd skall överensstämma med budgetplanen och med det interinstitutionella avtalet om budgetdisciplin.”

***

The Treaty of Nice extended quality majority voting (QMV) to the whole Article, which the government of Sweden found acceptable. The government referred to joint declaration 6.

***

The Finnish ratification bill ‘Hallituksen esitys Eduskunnalle Euroopan unionist tehdyn sopimuksen sekä Euroopan yhteisöjen perustamissopimusten ja niihin liittyvien tiettyjen asiakirjojen muuttamisesta tehdyn Nizzan sopimuksen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 93/2001 vp) gave the following explanation on page 41:

”100 artikla. Voimassa olevan sopimuksen artiklan 1 kohdan mukaan neuvosto voi päättää yksimielisesti taloudellisen tilanteen kannalta aiheellisista toimenpiteistä erityisesti, jos esiintyy suuria vaikeuksia tiettyjen tuotteiden saatavuudessa. Nizzan sopimuksella menettely neuvostossa muutetaan määräenemmistöpäätöksenteoksi.

Artiklan 2 kohdan mukaan neuvosto voi tietyin edellytyksin myöntää jäsenvaltiolle yhteisön taloudellista apua, mikäli kyseiselle jäsenvaltiolle on aiheutunut vaikeuksia luonnonkatastrofeista tai poikkeuksellisista tapahtumista, joihin se ei voi vaikuttaa, tai mikäli tällaisten vaikeuksien uhka on vakava. Voimassa olevan sopimuksen mukaan neuvosto tekee päätöksensä yksimielisesti lukuun ottamatta tapauksia, joissa suuret vaikeudet aiheutuvat luonnonmullistuksista. Tällöin neuvosto tekee ratkaisunsa määräenemmistöllä.”

***

The government of Finland explained that natural disaster relief was already covered by qualified majority voting, so the novelty was to extend QMVto severe difficulties arising from the economic situation, particularly the supply of certain products.

***

As always, government bills in Finland can be found in Swedish, too. In this case the Nice Treaty ratification bill is called ‘Regeringens proposition till Riksdagen om ikraft sättande av vissa bestämmelser som hör till området för lagstiftningen i Nicefördraget om ändring av fördraget om Europeiska unionen, fördragen om upprättandet av Europeiska gemenskaperna och vissa akter som hör samman med dem’ (RP 93/2001 rd).

***

The intergovernmental conference (IGC 2001) agreed on the following joint declaration (OJ 10.3.2001 C 80/78):

“6. Declaration on Article 100 of the Treaty establishing the European Community

The Conference recalls that decisions regarding financial assistance, such as are provided for in Article 100 and are compatible with the ‘no bail-out’ rule laid down in Article 103, must comply with the 2000-2006 financial perspective, and in particular paragraph 11 of the Interinstitutional Agreement of 6 May 1999 between the European Parliament, the Council and the Commission on budgetary discipline and improvement of the budgetary procedure, and with the corresponding provisions of future interinstitutional agreements and financial perspectives.”

***

Next, we look at the corresponding proposal of the European Convention.


Ralf Grahn

Thursday 25 September 2008

EU: Broad economic policy guidelines VI

Here are some additional materials and comments concerning Article 121 TFEU on coordination of economic policies of EU member states.

***

Sweden

The consultation paper ’Lissabonfördraget’ was the first official Swedish description of the Lisbon Treaty amendments, and it is available at:

http://www.regeringen.se/content/1/c6/09/49/81/107aa077.pdf

It was followed by the Swedish government’s draft ratification bill ‘Lagrådsremiss – Lissabonfördraget’, published 29 May 2008:

http://www.regeringen.se/sb/d/5676/a/106277

The draft bill was given a green light by the Council on Legislation (Lagrådet):

http://www.lagradet.se/yttranden/Lissabonfordraget.pdf

The latest official government view, and now my standard reference for Sweden, is the ratification bill, with the Swedish parliament (Riksdagen) expected to decide on approval in late autumn, probably November (Regeringens proposition 2007/08:168 Lissabonfördraget; 3 July 2008):

http://www.regeringen.se/content/1/c6/10/84/02/8c96cf3e.pdf

Economic and monetary policy (23.2 Ekonomisk och monetary politik) is discussed on pages 180 to 185. The Swedish government explains the procedures on page 182:

“Lissabonfördraget innebär inte, enligt regeringens mening, några genomgripande förändringar i regelverket eller i fördelningen av befogenheter på det ekonomisk-politiska området. Antagandet av de allmänna riktlinjerna ska fortfarande ske på samma sätt som tidigare, med den skillnaden att endast euroländerna får rösta om de rekommendationer som riktar sig till dessa länder (artikel 115a i EUF-fördraget).

En viss förskjutning görs dock i riktning mot mer inflytande för kommissionen. Bestämmelserna syftar till att säkerställa genomförandet av medlemsstaternas åtaganden. Kommissionen ska till exempel få möjlighet att självständigt utfärda en varning till en medlemsstat som inte bedöms efterleva de allmänna riktlinjerna för den ekonomiska politiken. Rådet kommer dock, på samma sätt som i dag, med kvalificerad majoritet och på rekommendation av kommissionen, kunna besluta om att lämna den berörda medlemsstaten de rekommendationer som behövs. Skillnaden gentemot nuvarande bestämmelser är att den berörda medlemsstaten inte får delta i detta beslut (artikel 99 i EUF-fördraget).

Om kommissionen anser att det föreligger eller kan uppstå ett alltför stort underskott i en medlemsstat, lämnar kommissionen idag ett yttrande till rådet. Enligt Lissabonfördraget kommer kommissionen i stället att lämna ett yttrande till den medlemsstaten och informera rådet om detta (artikel 104.5 i EUF-fördraget).

Om kommissionen bedömer att en medlemsstat har ett alltför stort underskott lämnar kommissionen idag en rekommendation till rådet att slå fast detta. Enligt Lissabonfördraget kommer kommissionen i stället att lämna ett förslag i denna fråga (artikel 104.6 i EUF-fördraget). Denna skillnad innebär att rådet, för att ändra innehållet i förslaget från kommissionen, måste uppnå enhällighet om ändringsförslaget. Vid en rekommendation från kommissionen, såsom fallet är i dag, har rådet möjlighet att ändra texten med kvalificerad majoritet.”

***

Finland

Among our standard sample of Lisbon Treaty commentaries, Finland is the first Eurozone country.

The Finnish ratification bill, ‘Hallituksen esitys Eduskunnalle Euroopan unionista tehdyn sopimuksen ja Euroopan yhteisön perustamissopimuksen muuttamisesta tehdyn Lissabonin sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 23/2008 vp), discusses economic and monetary policy (Talous- ja rahapolitiikka) on pages 209 to 214.

The ratification bill briefly describes Article 99 TFEU (ToL), renumbered Article 121 TFEU, as essentially unchanged although it mentions the new “preliminary warning” by the Commission and the exclusion of the member state concerned from voting as novelties (page 209):

”99 artikla (uusi 121 artikla), jossa määrätään unionin ja jäsenvaltioiden talouspolitiikan yleislinjojen laatimisesta sekä taloudellisen kehityksen valvomisesta, on samansisältöinen kuin perustuslakisopimuksen III-179 artikla ja se vastaa pääpiirteittäin SEY 99 artiklaa.

Artiklan 4 kohdan mukaan neuvosto voi antaa jäsenvaltiolle suosituksia, mikäli sen talouspolitiikka ei ole unionin asettamien suuntaviivojen mukaista. Uutta on se, että komissio on saanut yksin valtuudet antaa jäsenvaltiolle varoituksen. Myös määräykset neuvoston päätöksentekomenettelystä kyseisissä asioissa ovat uusia. Kun neuvosto päättää suosituksista, asiassa osallisena olevan jäsenvaltion edustaja saa osallistua keskusteluun, mutta hänellä ei ole äänioikeutta. Vaikka komissio saa mahdollisuuden antaa yksittäiselle jäsenvaltiolle ”ennakkovaroituksen”, ei muutos käytännössä ole kovin merkittävä, koska komission avoimen tiedotuskäytännön vuoksi suunnitelmat ennakkovaroituksen antamisesta ovat tulleet julkisuuteen viimeistään silloin, kun asia tulee kollegioon. Samasta syystä neuvoston mahdollisuudella julkistaa suosituksensa erillisellä päätöksellä ei ole juurikaan merkitystä.”


The Finnish ratification bill is available at:

http://www.finlex.fi/fi/esitykset/he/2008/20080023.pdf


The Swedish language version of the ratification bill ‘Regeringens proposition till Riksdagen med förslag om godkännande av Lissabonfördraget om ändring av fördraget om Europeiska unionen och fördraget om upprättandet av Europeiska gemenskapen och till lag om sättande i kraft av de bestämmelser i fördraget som hör till området för lagstiftningen’ (RP 23/2008 rd), makes the same remarks under ’Ekonomisk och monetär politik’ on Article 99 TFEU (ToL), the future Article 121 TFEU, on page 212─213:

The ratification bill in Swedish can be accessed at:

http://www.finlex.fi/sv/esitykset/he/2008/20080023.pdf

***

Books on the Lisbon Treaty

Étienne de Poncins offers a few general comments on EU economic governance and budget matters, ‘La gouvernance économique et les questions budgétaires’ in his ‘Le traité de Lisbonne en 27 clés’ (Éditions Lignes de Repères, 2008), page 245─251.

‚Der Vertrag von Lissabon‘, by Klemens H. Fischer (Nomos, Stämpfli & Verlag Österreich, 2008), traces the amendments Article by Article; here on page 263.

François-Xavier Priollaud and David Siritzky offer a short introductory explanation on economic and monetary policy (pages 246 and 247) and on economic policy coordination, including the treaty amendments (pages 248 to 250) in their book ‘Le traité de Lisbonne – Commentaire, article par article, des nouveaux traités européens (TUE et TFUE)’ (La Documentation française, Paris, 2008).



Ralf Grahn

EU: Broad economic policy guidelines V

What has been said about Article 121 TFEU? Here are some references for the eager reader.


United Kingdom

Professor Steve Peers covered the Treaty of Lisbon in a number of Statewatch Analyses. ‘EU Reform Treaty Analysis no. 3.4: Revised text of Part Three, Titles VII to XVII of the Treaty establishing the European Community (TEC): Other internal EC policies (Version 2, 24 October 2007) includes the current Title VII Economic and monetary policy.

Peers presented the numbering of Article 99 TFEU (ToL), to be renumbered Article 121 TFEU in the consolidated version, and highlighted the changes, with the following comment (page 6):

“The co-decision procedure is extended to this Article, in place of the ‘cooperation’ procedure (a halfway house between consultation and co-decision, which is to be abolished). The amendment to paragraph 4 gives the Commission a new power to address a warning to the Member State concerned, and the Member State which is the subject of a procedure may not vote.”


The analysis 3.4 and other useful Statewatch analyses are available through:

http://www.statewatch.org/euconstitution.htm


***

The Foreign and Commonwealth Office (FCO) offers a convenient source of brief annotations on Lisbon Treaty amendments in ‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon’ (Command Paper 7311, published 21 January 2008). It offers the following comment on Article 121 TFEU, Article 99 TFEU (ToL) in the original Lisbon Treaty (page 12):

“Draws on Article 99 TEC. New power for Commission to issue a warning to Member States, and the Member State concerned is excluded from voting. Paragraph 6 QMV already applies, decision-making moves to co-decision.”



The FCO comparative table is available at:

http://www.official-documents.gov.uk/document/cm73/7311/7311.asp

***

The UK House of Commons Library Research Paper 07/86 ‘The Treaty of Lisbon: amendments to the Treaty establishing the European Community’ (published 6 December 2007) discussed ‘H. Economic and Monetary Policy’ on pages 61 to 64.

Article 99 TFEU (ToL) was given the following explanation, on page 61:

“In amended Article 99 (Constitution Article III-179) the Commission may now “address a warning” to Member States if they are not following the broad economic guidelines. This is in addition to the Council being able to make recommendations to the Member State in question, a right which currently exists. The vote of the Member State being considered will not be counted in the Council and in the OLP to be used for mulitilateral surveillance rules a qualified majority will be defined under Article 205(3)(a) of the TFEU (at least 55% of the other voting Council members, representing Member States comprising at least 65% of the population of voting Council members).”


The Library Research Paper 07/86 is available at:

http://www.parliament.uk/commons/lib/research/rp2007/rp07-086.pdf

***

The House of Lords European Union Committee report ‘The Treaty of Lisbon: an impact assessment, Volume I: Report’ (HL Paper 62-I, published 13 March 2008) is a valuable resource on the Treaty of Lisbon, but it mentioned economic policies only in passing.

The report is accessible at:

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeucom/62/62.pdf


***

The next part will add some comments and materials.


Ralf Grahn

Wednesday 24 September 2008

EU: Broad economic policy guidelines IV

Would the EU Treaty of Lisbon do anything to attain the goals of the European Union, to achieve convergence and to enhance monitoring of the national economic policies?


***

I found no specific mention of the economic and monetary policy in the mandate of the intergovernmental conference (IGC 2007 Mandate, Council document 11218/07, 26 June 2007).

The present Treaty establishing the European Community (TEC) was to become the Treaty on the Functioning of the European Union (TFEU), and the innovations as agreed in the 2004 IGC were to be inserted into the Treaty by way of specific modifications in the usual manner (points 17 and 18, pages 6 and 7).

***

In Article 2, point 86 of the Treaty of Lisbon (ToL) the IGC 2007 amended Article 99 TEC (OJ 17.12.2007 C 306/70─71):

86) Article 99 shall be amended as follows:

(a) in paragraph 4, the first sentence of the first subparagraph shall be replaced by the following two sentences:

‘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 Commission may address a warning to the Member State concerned. The Council, on a recommendation from the Commission, may address the necessary recommendations to the Member State concerned.’;

(b) the second subparagraph of paragraph 4 shall become paragraph 5 and the current paragraph 5 shall be renumbered 6;

(c) the following two new subparagraphs shall be inserted in paragraph 4:

‘Within the scope of this paragraph, the Council shall act without taking into account the vote of the member of the Council representing the Member State concerned.

A qualified majority of the other members of the Council shall be defined in accordance with Article 205(3)(a).’;

(d) in paragraph 5, renumbered 6, the words ‘The Council, acting in accordance with the procedure referred to in Article 252, may adopt detailed rules’ shall be replaced by the following: ‘The European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, may adopt detailed rules’, the words ‘of this Article’ shall be deleted.

***

The TFEU table of equivalences confirms that the new Article 99 TFEU (ToL) in the original Treaty of Lisbon was later renumbered Article 121 TFEU in the consolidated version, under the title ‘Economic and monetary policy’ renumbered Title VIII (OJ 17.12.2007 C 306/211─212).

***

Article 121 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 115/97─98:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 1 Economic policy

Article 121 Lisbon Treaty
(ex Article 99 TEC)

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 120.

2. The Council shall, on a recommendation from the Commission, formulate a draft for the broad guidelines of the economic policies of the Member States and of the Union, 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 Union.

On the basis of this conclusion, the Council shall 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 Union 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 Commission may address a warning to the Member State concerned. The Council, on a recommendation from the Commission, may address the necessary recommendations to the Member State concerned. The Council may, on a proposal from the Commission, decide to make its recommendations public.

Within the scope of this paragraph, the Council shall act without taking into account the vote of the member of the Council representing the Member State concerned.

A qualified majority of the other members of the Council shall be defined in accordance with Article 238(3)(a).

5. 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.

6. The European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, may adopt detailed rules for the multilateral surveillance procedure referred to in paragraphs 3 and 4.

***

Those who have followed the path from Article 99 TEC, through the draft Constitution and the Constitution, until Article 121 of the consolidated Treaty of Lisbon, see that the bulk of the provision ─ indeed, of the different treaty versions ─ is almost identical.

The Lisbon Treaty introduces minor changes, in the footsteps of the European Convention: In paragraph 4, the Commission is allowed to issue a first warning to a member state at deviance. Technically, the rules on qualified majority voting have been solved by a referral to Article 238(3)(a) TFEU.

***

For the convenience of readers, Article 238(3)(a) TFEU is reproduced here (OJ 9.5.2008 C 115/154):

“3. As from 1 November 2014 and subject to the provisions laid down in the Protocol on
transitional provisions, in cases where, under the Treaties, not all the members of the Council
participate in voting, a qualified majority shall be defined as follows:

(a) A qualified majority shall be defined as at least 55 % of the members of the Council representing the participating Member States, comprising at least 65 % of the population of these States.

A blocking minority must include at least the minimum number of 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;”

***

The following instalment is going to take a look at some comments concerning Article 121 TFEU.


Ralf Grahn

EU: Broad economic policy guidelines III

The multilateral surveillance of member states’ economic policies underwent few changes in the Constitutional Treaty, when compared to the draft Constitution. The substantial changes concern qualified majority voting (paragraph 4).

In the Treaty establishing a Constitution for Europe, signed by all, but approved internally by 18 member states before it stalled, the introductory provisions on economic policy were located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 1 ‘Economic policy’.

Article III-179 is found in OJ 16.12.2004 C 310/76-77:

Article III-179 Constitution

1. Member States shall regard their economic policies as a matter of common concern and shall coordinate them within the Council, in accordance with Article III-178.

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

The European Council, on the basis of the report from the Council, shall discuss a conclusion on the broad guidelines of the economic policies of the Member States and of the Union. On the basis of this conclusion, the Council shall adopt a recommendation setting out these broad guidelines. It 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, on the basis of reports submitted by the Commission, shall monitor economic developments in each of the Member States and in the Union, as well as the consistency of economic policies with the broad guidelines referred to in paragraph 2, and shall regularly carry out an overall assessment.

For the purpose of this multilateral surveillance, Member States shall forward information to the Commission on 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 Commission may address a warning to the Member State concerned. The Council, on a recommendation from the Commission, may address the necessary recommendations to the Member State concerned. The Council, on a proposal from the Commission, may decide to make its recommendations public.

Within the scope of this paragraph, the Council shall act without taking into account the vote of the member of the Council representing the Member State concerned.

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.

5. 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.

6. European laws may lay down detailed rules for the multilateral surveillance procedure referred to in paragraphs 3 and 4.

***


The Swedish government memorandum ‘Fördraget om upprättande av en constitution för Europa’ (Utrikesdepartemetet, Departementsserien (Ds) 2004:52, december 2004), page 238, described the differences between current practice and the Constitutional Treaty in the following terms:

“Det konstitutionella fördraget innebär inte några genomgripande förändringar i regelverket eller i fördelningen av befogenheter på det ekonomisk-politiska området. Antagandet av de allmänna riktlinjerna skall fortfarande ske på samma sätt som tidigare, med den skillnaden att endast euroländerna får rösta om de rekommendationer som riktar sig till dessa länder (artikel III- 194).

En viss förskjutning görs dock i riktning mot mer inflytande för kommissionen. Bestämmelserna syftar till att säkerställa genomförandet av medlemsstaternas åtaganden. Kommissionen skall till exempel få möjlighet att utfärda den första varningen till en medlemsstat som inte bedöms efterleva de allmänna riktlinjerna för den ekonomiska politiken. Rådet kommer dock, på samma sätt som i dag, med kvalificerad majoritet och på rekommendation av kommissionen, kunna besluta om att lämna den berörda medlemsstaten de rekommendationer som behövs. Skillnaden gentemot nuvarande bestämmelser är att den berörda medlemsstaten inte får delta i detta beslut (artikel III-179).

Om kommissionen bedömer att en medlemsstat har ett alltför stort underskott lämnar kommissionen i dag en rekommendation till rådet att slå fast detta. Enligt det konstitutionella fördraget kommer kommissionen istället att lämna ett förslag i denna fråga. Denna skillnad innebär att rådet, för att ändra innehållet i förslaget från kommissionen, måste uppnå enhällighet om ändringsförslaget. Vid en rekommendation från kommissionen, såsom fallet är i dag, har rådet möjlighet att ändra texten med kvalificerad majoritet.”

The Swedish government remarked that the differences are not profound, but the Commission is given some additional means to ensure compliance. The Commission could issue a first warning to a member state. Instead of a recommendation, as currently, the Commission would make a proposal concerning oversized deficits, which would mean that the Council would have to be unanimous if it wanted to disregard the proposal.

***

The government of Finland was a bit more specific in its description of Article III-179 of the Constitutional Treaty. The Finnish ratification bill ‘Hallituksen esitys Eduskunnalle Euroopan perustuslaista tehdyn sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 67/2006 vp), page 182─183, mentioned the Commission’s power to warn and it explained the new voting rules:

”III-179 artikla, jossa määrätään unionin ja jäsenvaltioiden talouspolitiikan yleislinjojen laatimisesta sekä taloudellisen kehityksen valvomisesta, vastaa pääpiirteittäin SEY 99 artiklaa.

Artiklan 4 kohdan mukaan neuvosto voi antaa jäsenvaltiolle suosituksia, mikäli sen talouspolitiikka ei ole unionin asettamien yleislinjojen mukaista. Uutta on se, että komissio on saanut yksin valtuudet antaa jäsenvaltiolle varoituksen. Myös määräykset neuvoston päätöksentekomenettelystä kyseisissä asioissa ovat uusia. Kun neuvosto päättää suosituksista, asiassa osallisena olevan jäsenvaltion edustaja saa osallistua keskusteluun, mutta hänellä ei ole äänioikeutta.

Artiklassa on määritelty erikseen, miten määräenemmistö saavutetaan kyseisissä tapauksissa. Määräenemmistöön tarvitaan vähintään 55 prosenttia äänioikeutettujen neuvoston jäsenten äänistä. Artiklan mukaan näiden neuvoston jäsenten tulee myös edustaa vähintään 65 prosenttia äänestykseen osallistuvien jäsenvaltioiden väestöstä. Tämä 65 prosentin vaatimus ei ole kuitenkaan ehdoton, koska päätöksenteon estävään määrävähemmistöön tarvitaan äänioikeutettuja jäseniä, jotka edustavat yli 35 prosenttia jäsenvaltioiden yhteenlasketusta väestöstä lisättynä yhdellä jäsenellä. Jos tämä vaatimus ei toteudu, katsotaan määräenemmistö saavutetuksi edellyttäen että 55 prosenttia neuvoston äänioikeutetuista jäsenistä puoltaa esitystä.”

The same remarks can be found in Swedish, in ’Regeringens proposition till Riksdagen med förslag om godkännande av Fördraget om upprättande av en konstitution för Europa och till lag om sättande i kraft av de bestämmelser i fördraget som hör till området för lagstiftningen (RP 67/2006 rd), page 186─187:

“Artikel III-179, där det bestäms om utarbetandet av allmänna riktlinjer för unionens och medlemsstaternas ekonomiska politik samt om övervakningen av den ekonomiska utvecklingen, motsvarar i stora drag artikel 99 I EG-fördraget.

Enligt artikel III-179.4 får rådet lämna en medlemsstat rekommendationer, om dess ekonomiska politik inte är förenlig med unionens allmänna riktlinjer. Nytt är att kommissionen ensam har fått befogenheter att varna medlemsstaterna. Även bestämmelserna om rådets beslutsförfarande i dessa frågor är nya. När rådet beslutar om rekommendationer får en företrädare för den berörda medlemsstaten delta i diskussionen, men han har inte rösträtt.

I artikeln bestäms särskilt hur kvalificerad majoritet uppnås i dessa fall. För kvalificerad majoritet krävs minst 55 % av rösterna från de röstberättigade rådsmedlemmarna. Enligt artikeln skall dessa rådsmedlemmar också företräda minst 65 % av befolkningen i de medlemsstater som deltar i omröstningen. Detta krav på 65 % är ändå inte ovillkorligt, eftersom det för en blockerande minoritet krävs ett antal röstberättigade medlemmar som företräder mer än 35 % av befolkningen i de deltagande medlemsstaterna, plus en medlem. Om detta krav inte uppfylls, skall kvalificerad majoritet anses vara uppnådd förutsatt att 55 % av de röstberättigade rådsmedlemmarna förordar förslaget.”

***

For a short comment in German, see for instance Klemens H. Fischer in ‘Der Europäische Verfassungsvertrag‘ (Nomos, Stämpfli & Manz, 2005), page 309, where he mentions „zwei neue Unterabsätze, die QM und SQM betreffen“ as well as the following two new elements, „Recht der Vervarnung durch die Kommission“ and „Aussckluss des betroffenen Mitgliedstaates bei der Abstimmund im Rat“.



Ralf Grahn

Tuesday 23 September 2008

EU: Broad economic policy guidelines II

Has the treaty reform process tried to improve the provisions on economic policies as a matter of common concern, or more specifically the broad economic policy guidelines?

First, we turn to the European Convention, the closest thing to a constituent assembly EU citizens have had since the 1950s and 1980s. The corresponding Article is located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 1 ‘Economic policy’.

Article III-71 of the draft Treaty establishing a Constitution for Europe, OJ 18.7.2003 C 169/39-40:

Article III-71 Draft Constitution

1. Member States shall regard their economic policies as a matter of common concern and shall coordinate them within the Council of Ministers, in accordance with Article III-70.

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

The European Council, on the basis of the report from the Council of Ministers, shall discuss a conclusion on the broad guidelines of the economic policies of the Member States and of the Union. On the basis of this conclusion, the Council of Ministers shall adopt a recommendation setting out these broad guidelines. It 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 of Ministers, on the basis of reports submitted by the Commission, shall monitor economic developments in each of the Member States and in the Union, as well as the consistency of economic policies with the broad guidelines referred to in paragraph 2, and shall regularly carry out an overall assessment.

For the purpose of this multilateral surveillance, Member States shall forward information to the Commission on important steps 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 Commission may address a warning to the Member State concerned. The Council of Ministers, on a recommendation from the Commission, may address the necessary recommendations to the Member State concerned. The Council of Ministers, on a proposal from the Commission, may decide to make its recommendations public.

Within the scope of this paragraph, the Council of Ministers shall act without taking into account the vote of the representative of the Member State concerned, and a qualified majority shall be defined as the majority of the votes of the other Member States, representing at least three fifths of their population.

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

6. European laws may lay down detailed rules for the multilateral surveillance procedure referred to in paragraphs 3 and 4.

***

The draft Constitution followed the current TEC text closely, with the customary terminological differences and a few stylistic ones, but in paragraph 4 the Convention introduced two novelties: In the first subparagraph, the Commission, instead of the Council, was authorised to address a warning to a member state. The second subparagraph excluded the member state concerned, when voting on a recommendation or its publicity concerning the erring state.

The government of Sweden ─ a country outside the Eurozone ─ made the following remarks in ‘Europeiska konventet om EU:s framtid’ (Utrikesdepartementet, Departementsserien (Ds) 2003:58, 2003), page 55:

”Inom den ekonomiska politiken föreslås att kommissionen bl.a. skall få möjlighet att utfärda varningar till medlemsstater som inte bedöms följa de allmänna riktlinjer som rådet enats om rörande varje medlemsstats offentliga finanser. Konventet föreslår också att den berörda medlemsstatens röst inte skall räknas vid beslut om att utfärda en rekommendation när en medlemsstat inte efterlever de allmänna riktlinjerna eller vid beslut huruvida en medlemsstat har ett alltför stort underskott i de offentliga finanserna. [---]

The Swedish government noted both the possibility for the Commission to issue warnings and exclusion of the member state concerned from voting.

***

Ahead of the intergovernmental conference (IGC 2003─2004), the government of Sweden, in line with the European Convention, supported some strengthening of the instruments for multilateral surveillance of economic policies, although the government underlined the national character of economic policy; in ‘Europeiska konventet om EU:s framtid’ (Regeringens skrivelse 2003/04:13, den 2 oktober 2003), pages 49─50:

“En väl fungerande ekonomisk-politisk samordning är viktig för att unionen skall kunna hantera gränsöverskridande effekter av medlemsstaternas ekonomiska politik och för att valutaunionen skall fungera väl. Det nuvarande ramverket och kompetensfördelningen för den ekonomisk-politiska samordningen är i grunden bra. Instrumenten för genomförande och uppföljning kan dock behöva stärkas, bl.a. för att befästa medlemsstaternas åtaganden. Det är därför positivt att konventet lägger förslag som går i denna riktning. En viktig princip är att den ekonomiska politiken är nationell och faller inom medlemsstaternas befogenhet även om viss samordning är av gemensamt intresse.”

***

Étienne de Poncins highlighted the proposed shift to the ordinary legislative procedure (co-decision) in his commentary ‘Vers une Constitution européenne’ (Éditions 10/18, 2003), page 294 :

« Commentaire : le paragraphe 6 de cet article sur la surveillance multilatérale relève dans les traités actuels de la procédure de coopération entre le Parlement et le Conseil. Cette procédure disparaissant dans la Constitution, la procédure législative ordinaire sera d’application. Le Parlement gagne là des pouvoirs importants sur un thème sensible pour les gouvernements. »

***

In the following instalment we look at the corresponding economic policy coordination text of the Constitutional Treaty.


Ralf Grahn

EU: Broad economic policy guidelines I

EU economic policy coordination tries to bridge the gap between the single currency, the euro, and national economic policies.

The Treaty establishing the European Community (TEC) treats the economic policies of the member states as a common concern. The Council coordinates the economic policies by adopting broad economic policy guidelines (BEPG). The Commission reports on and the Council monitors the economic developments.

If the economic policies of an EU member state are inconsistent with the guidelines or risk the economic and monetary union (EMU), the Council can adopt recommendations, which may be made public.

***

Article 99 of the Treaty establishing the European Community (TEC) is found in the latest consolidated version of the current treaties, published in the Official Journal of the European Union 29.12.2006 C 321 E/82-83:

Part Three – Community policies

Title VII – Economic and monetary policy

Chapter 1 – Economic policy

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.

***

We notice that the Council acts on a recommendation by the Commission, when the economic policies of a member state are not consistent with the broad guidelines.

Next, we look at the corresponding proposal of the European Convention.


Ralf Grahn

Friday 12 September 2008

Lisbon Treaty: Finland ratifies and Åland hesitates

Formal ratification of the EU Lisbon Treaty takes one additional step today in Finland with the signature of President Tarja Halonen. The parliamentary ratification stage was concluded in June, with overwhelming support for the amending treaty.

The Treaty of Lisbon is still at the committee stage in the Åland Islands Parliament, which through the regional government has lobbied hard for increased, more or less parallel powers in Finnish EU affairs.

Here is the text of the Finnish government’s press release:


“Ministry for Foreign Affairs
11.9.2008 14.02
Finland ratifies the treaty of Lisbon
The Government of Finland decided to present on Thursday 11 September to the President of the Republic the ratification of the Treaty of Lisbon and the confirmation of the Act on the implementation of the Treaty. The President of the Republic is to decide on the matter on Friday 12 September.
The Parliament of Finland approved the Treaty of Lisbon for its part on 11 June.
Deliberations on the Treaty by the Parliaments of the Member States of the European Union have been completed in other Member States except for Sweden and the Czech Republic. In its referendum in June, Ireland voted against the Treaty. Seventeen Member States have deposited their instruments of ratification with the Government of Italy.
The Act on the implementation of the Treaty is under discussion also before the Åland Parliament ("Lagting") whose consent has been requested in order to bring the provisions of the Treaty into force in Åland. The consent of the Åland Parliament is not a prerequisite for the ratification of the Treaty by Finland.
The Government gave the following statement in connection with this matter: "In the context of the ratification of the Treaty of Lisbon discussions have been carried out with the representatives of Åland on the participation of Åland in the preparation of European Union affairs and Åland's possibilities to exert influence on them. On the basis of these discussions a decision in principle is being prepared for its adoption by the Government of Finland. In addition, a working group has been established to prepare an amendment to the Act on the Autonomy of Åland concerning the possibility of Åland to be heard before the European Court of Justice."
Further information: Director Päivi Kaukoranta, Ministry for Foreign Affairs, tel 160 55715.”

***

Source:

http://www.valtioneuvosto.fi/ajankohtaista/tiedotteet/tiedote/fi.jsp?oid=238119

The press release is available in Finnish and Swedish, too.


Ralf Grahn