Thursday 1 July 2010

EU Commission proposes stronger economic governance

The discussion about economic governance in the European Union and the eurozone has been enriched by new proposals.

On 12 May 2010 the European Commission published a communication Reinforcing economic policy coordination; COM(2010) 250 final (12 pages).

A short while ago, the European Central Bank published its proposals on reinforcing economic governance in the Euro Area (14 pages), addressed to the task force chaired by Herman Van Rompuy.

Commission proposal main points

Yesterday, 30 June 2010, Olli Rehn, the commissioner for economic and monetary policy, explained the European Commission’s new proposals on tools for enhanced EU economic governance (SPEECH/10/350).

The key tool to improved surveillance is the European Semester: prior coordination of economic policies. Rehn hopes that the Ecofin Council on 13 July 2010 endorses the launch of the European Semester from 2011 and a revision of the Code of Conduct for the Stability and Growth Pact (SGP).

In a press release, the Commission presented the key proposals for reinforced macro-economic, budgetary and structural surveillance (IP/10/859).

In a clear manner, an explanatory memorandum offered further detail about the proposed toolbox for stronger economic governance in Europe (MEMO/10/288).

Commission communication

During the course of writing this blog post, the Commission’s Directorate-General for Economic and Financial Affairs managed to replace its machine translated web page on enhancing economic policy coordination for growth and jobs with a page in real English.

The same thing happened with the Commission communication. The unreadable machine translation was replaced by a document revised by human beings, even if the text may still be somewhat provisional:

Enhancing economic policy coordination for stability, growth and jobs – Tools for stronger EU economic governance; Brussels, [??] COM(2010) 367/2 (15 pages)

The communication COM(2010) 367 has not yet been posted on the legal portal Eur-Lex, under preparatory documents.

Ralf Grahn


  1. If the EU Finance Ministers approve the enhancements of the Stability And Growth Pact it would further confirm the loss of national sovereignty that came in early May 2010, when the EU Finance Ministers waived national sovereignty and announced what they called a bilateral loan agreement providing monetary aid to Greece, but which was in reality a seigniorage monetary grant.

    The vetting of budgets each July, imposition of farm aid cuts and imposition of fees to go on deposit to an interest bearing account, would establish a federalized european economic government where countries would no longer be sovereign nations, but rather states existing in a region of global governance, specifically one of ten called for by the Club of Rome in 1974.

  2. theyenguy,

    When setting up the European Financial Stability Facility, each government of an euro area country formally acted as a freely cooperating, sovereign nation state.

    Why not rejoice, if for you sovereignty comes before all other considerations?

    Maybe the latest G20 meeting gives you some comfort with regard to the lack of effectiveness of international action and the remaining distance to global government.

    How do you explain your ideal of sovereignty to the people who happen to be born in, say, North Korea or Iran?

    All the EU member states have joined as a result of democratic decisions, which now include a common currency for 16 of them, with nine committed to euro adoption.

    I would find it negligent, if our governments failed to strengthen economic governance in the eurozone, at least, given the crucial role of the common currency for our prosperity.

    By the way, there is a small but significant difference between surveillance of budgets and budget plans.


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