European Semester 2017 start: Denmark

Last autumn the European Commission launched the European Semester 2017 by publishing the:

Annual Growth Survey 2017; Brussels, 16.11.2016 COM(2016) 725 final (16 pages)

The Annual Growth Survey (AGS) offered a summary of the Commission’s priorities at EU level and the need for action at the national level in order to promote investment, structural reforms and responsible public finances in 2017 and beyond. However, the AGS did not mention individual countries.

Against the broad AGS background, the Commission analysed individual member states in the:

Alert Mechanism Report 2017; Brussels, 16.11.2016 COM(2016) 728 final (47 pages)    

A summary of Denmark is presented on the pages 26-27 of the Alert Mechanism Report (AMR) 2017, with the macroeconomic imbalance procedure (MIP) at least postponed:   

Overall, the economic reading points to possible issues related to private debt and the housing sector, but risks still appear contained. Therefore, the Commission will at this stage not carry out further in-depth analysis in the context of the MIP.

The AGS was accompanied by the mandatory:

Draft Joint Employment Report; Brussels, 16.11.2016 COM(2016) 729 final (83 pages)

Flexicurity being almost a trademark of Denmark, Danish representatives probably saw it as indirect praise, when the draft Joint Employment Report (JER) underlined that reforms promoting resilient and inclusive labour markets must continue in the European Union countries, stimulating job creation and labour market participation while properly combining flexibility and adequate security (page 3).

But the youth unemployment rate and the rate of thosen not in employment, education or training (NEET rate) had risen in Denmark (p. 17). In the summary of the scoreboard of key employment and social indicators (p. 18) Denmark performed better than average regarding the unemployment rate, the at-risk-of-poverty rate, inequality (S80/S20 =  the ratio between the incomes of the 20% of the population with the highest incomes and the incomes of the 20% with lowest incomes) and was among the best performers with regard to gross disposable household income.

Ralf Grahn

Single Market integration 2013 report

In the communication Better governance for the Single Market; Brussels, 8.6.2012 COM(2012) 259 final; the European Commission promised (page 5) an Annual Report on Single Market integration as part of the Annual Growth Survey, to be discussed by the Council and the European Parliament and be endorsed by the Spring European Council. The Annual report would contribute to the definition of country-specific recommendations, which would be based on a more in-depth analysis of performance in each Member State, in the context of the European semester process.

The European Parliament responded by its resolution of 7 February 2013 with recommendations to the Commission on the governance of the Single Market P7_TA(2013)0054, based on the IMCO report prepared by Andreas Schwab.

Based on the Parliament’s indirect right to propose - Article 225 TFEU - it asked for more:

1. Requests the Commission to submit as soon as possible, whilst considering as the possible legal basis all relevant provisions of the TFEU relating to the internal market, including Article 26(3) TFEU, a proposal for an act aimed at strengthening the governance of the Single Market, following the detailed recommendations set out in the Annex hereto;

Indeed, the annex contains detailed recommendations as to the content of the proposal requested (pages 14-19).  

Single Market integration 2013

At the end of November 2012 the Commission produced its report as a contribution to the Annual Growth Survey (AGS) and the European Semester 2013 exercise:

State of the Single Market integration 2013 - Contribution to the Annual Growth Survey 2013; Brussels, 28.11.2012 COM(2012) 752 final (22 pages)  

The first AGS related Single Market integration report outlined the situation concerning goods, services, capital and labour, before moving on to explain where it thought the Single Market potential was the greatest (from page 7):

Based on a number of economic indicators, services, financial services, transport, digital market and energy have been identified as key areas for priority policy action and enhanced implementation of the Single Market.

The priority sectors were discussed in a more detailed manner, leading to policy priorities for each:

• Services markets (pages 9-13)
• Energy markets (pages 13-16)
• Transport markets (pages 16-18)
• Digital markets (pages 18-21)

Spring European Council 2013

In the Spring European Council conclusions 14/15 March 2013 EUCO 23/13, point  

9, the European Council promised to give specific emphasis to some issues. EUCO hoped the member states would act on the recommendations and it welcomed the Single Market integration report for future AGS exercises (9(b)):

(b) the Single Market continues to be a key driver for growth and jobs. In this context, the European Council invites the Member States to take full account of the recommendations in the Commission's report on the state of integration of the Single Market and welcomes the Commission's intention to integrate such reporting into future Annual Growth Surveys. ---

Ralf Grahn

European Council endorsed Annual Growth Survey 2012 priorities

The European Semester was kicked off by the Annual Growth Survey 2012 (AGS) Brussels, 23.11.2011 COM(2011) 815 final VOL. 1/5 (and the four annexes, Volumes 2-5).


EUCO conclusions

The conclusions of the spring European Council (EUCO) were brief and general in the fourth cornerstone paragraph:

4. For 2012, the European Council endorses the five priorities set out in the Commission's Annual Growth Survey for action taken at the EU and national level to:

– pursue differentiated, growth-friendly, fiscal consolidation,
– restore normal lending to the economy,
– promote growth and competitiveness,
– tackle unemployment and the social consequences of the crisis, and
– modernise public administration.

Synthesis report

When the European Council conclusions endorse the priorities proposed by the Commission, there is - if not a whole mountain - at least a molehill of views and conclusions behind each paragraph to inspire more detailed future policy work.

The Danish presidency prepared a shortcut: Implementation of the European Semester - Synthesis report (22 February 2012, Council document 6662/12).

However, the Synthesis report did not offer links to the various documents. Some readers may need to revisit the original and more detailed contributions submitted to the spring European Council, in order to find out what the five priorities set out in the Commission's Annual Growth Survey (AGS) and its annexes actually mean and require in the form of action.



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (recently ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (meaning European Law, in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?

The European Council 1-2 March 2012 trailer (= synthesis report)

The only document submitted to the European Council 1-2 March 2012, according to the relevant EUCO web page, is the annotated draft agenda (English version, dated 23 January 2012). The latest EUCO background note is for the meeting 30 January 2012.

For the public, the preparatory work by the General Affairs Council (GAC) remains hidden. Hidden or scattered is how the rest of the input from the Council configurations and others can be described as well, despite many resolutions and letters specifically addressed to EUCO.


EUCO synthesis

Few have either the time or the inclination to go out on a wild-goose chase on the broken paper trail. However, many would profit from some sort of pre-view beyond the recycled agenda items.

What should you choose, if you have time for one document only?

The following paper from the Danish presidency of the Council of the European Union fits the bill, because it brings together a number of inputs in summary fashion:

Implementation of the European Semester - Synthesis report; Brussels, 22 February 2012, Council document 6662/12 (21 pages)

In addition to the Annual Growth Survey (AGS) from the Commission, which kicked off the European Semester 2012, and the recent resolutions by the European Parliament, various Council configurations have made contributions: Economic and Financial Affairs (ECOFIN); Employment, social policy, health and consumer affairs (EPSCO); Competitiveness; Transport, Telecommunications and Energy (TTE); Environment; as well as Education, youth, culture and sport.

Even if links to the sources are not provided, the references are mostly specific enough to enable fairly easy search for those who want to dig deeper.



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. For better or for worse, between the global issues and the national level, the European Union institutions and the eurozone coteries shape our future. At the same time we see an emerging European online public sphere. Grahnlaw, Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Is your blog already listed among them? Are you following the debates which matter for your future?

What is the EU doing for growth and jobs?

The European Council has repeatedly endorsed and called for a Digital Single Market, as well as other growth reforms. This quote comes from the conclusions 9 December 2011 (EUCO 139/11; page 1, point 2):

Recalling the key priority areas for growth it identified in October 2011, in particular, the Single Market Act, the Digital Single Market and the reduction of overall regulatory burden for SMEs and microenterprises, the European Council stressed the need to swiftly adopt the measures with the most potential to boost growth and jobs. It therefore supports the principle of a fast-track programme and invites the Council and the European Parliament to give particular priority to the speedy examination of the proposals identified by the Commission, including in its Annual Growth Survey, as having substantial growth potential. It endorses the actions proposed by the Commission in its report on minimising regulatory burdens for SMEs.

In most EU member states the government coffers are empty and for some countries public borrowing (even refinancing) has become prohibitively expensive. Despite the glide into recession, there is scant hope for massive stimulus through state budgets.

Governments are mainly left with the opportunity to undertake qualitative growth reforms, in order to unleash the potential for a return to economic growth, prosperity and job creation. The sooner, the better, but becoming competitive often means breaking societal taboos in the very member states where the reforms have been lagging.

Without going into the substance, here is a compilation of the main EU level programmes to engender growth and new jobs.


Reforms for growth and jobs

Competitiveness is a key concept. For the convenience of readers, here are a few sources regarding proposals and developments to unleash growth potential in the European Union.


Single Market Act

The Single Market Act – twelve levers to boost growth and strengthen confidence – and the latest developments.


EU2020 and flagship initiatives

The Europe 2020 strategy for smart, sustainable and inclusive growth, with seven flagship initiatives:

Digital Agenda for Europe, including the fresh Annual Progress Report 2011 (22 December 2011), where developments regarding the Pillar 1 aim ”A vibrant digital single market” are recorded on pages 2-6.

Innovation Union, including the report State of the Innovation Union 2011; Brussels, 2.12.2011 COM(2011) 849 final

Youth on the Move

A Resource-efficient Europe

An Industrial Policy for the Globalisation Era, including the monitoring report Industrial Policy: Reinforcing competitiveness; Brussels, 14.10.2011 COM(2011) 642 final, or the fuller version including SEC(2011) 1187. Also the European Competetiveness Report 2011.

An Agenda for New Skills and Jobs. Also the report Employment and Social Developments in Europe (15 December 2011), downloadable here.

European platform against poverty and social exclusion. Also the report Employment and Social Developments in Europe (15 December 2011), downloadable here.


Annual Growth Survey 2012

Annual Growth Survey 2012 VOL. 1/5; Brussels, 23.11.2011 COM(2011) 815 final

The four AGS Annexes Progress Report on Europe 2020 (Volume 2), Macro-economic Report (Volume 3), Draft Joint Employment Report (Volume 4) and Growth-friendly tax policies in Member States and better tax coordination in the EU (Volume 5), are downloadable here.


Smart Regulation

The communication Smart Regulation in the European Union, Brussels, 8.10.2010 COM(2010) 543 final, is a part of the Better Regulation strategy. The recent report Minimizing regulatory burden for SMEs - Adapting EU regulation to the needs of micro-enterprises, Brussels, 23.11.2011 COM(2011) 803 final, was endorsed by the European Council, as we saw above.




Ralf Grahn

EU Ecofin set European Semester in motion

Ronny Patz has recently blogged about how EU institutions can helpfully interact with human beings, or continue to operate like a permanent diplomatic congress where solidarity between governments is paramount.

From a slightly different angle we can look at the quality of what the institutions communicate, with an Ecofin sample earlier and having a new stab at quality assessment below.


European Semester 2012

The EU Ecofin Council was going to do its part to set the European Semester in motion, by hearing the Commission present the Annual Growth Survey 2012 (AGS).

The EU institutions enlighten us through the Ecofin conclusions:

3129th Council meeting Economic and Financial Affairs; Brussels, 30 November 2011 (provisional version, 17683/11; 26 pages)

On pages 8-9 the Council brilliantly copy-pastes and paraphrases what it already said in the background note (quoted in my blog post).

After reiterating that in March, the European Council will assess implementation of country-specific recommendations made under the 2011 European Semester and will provide macroeconomic and fiscal guidance for 2012, comes the scoop for the patient reader:

To this end, the Council asked the Economic Policy Committee and the Economic and Financial Committee to prepare conclusions for the Council's meeting on 21 February, to be submitted to the European Council.

I believe that the Committees would have acted without public prodding, but after Ecofin's intervention I am sure that the next round of fiscal consolidation and growth reforms in the EU member states is going to turn out a resounding success.



Ralf Grahn

Olli Rehn on Annual Growth Survey, stability culture and eurobonds

In January 2011 the European Commission started the more integrated economic planning round known as the European Semester (Ecofin conclusions), by publishing the first Annual Growth Survey (AGS), the cornerstone document for better economic policy and governance in the European Union.

The Commission was able to start the second European Semester much earlier. The next AGS has now been published, although the Commission's Green Paper on eurobonds and other economic governance proposals stole the limelight.

Olli Rehn, who is now presented as vice-president of the European Commission and member of the Commission responsible for economic and monetary affairs and the euro, sketched the background in Berlin, Tuesday (SPEECH/11/782, English only):

Fiscal consolidation is a necessary but not sufficient condition to bring Europe back on track. Tomorrow, the Commission will present its view which reforms should be taken as a matter of urgency in our Annual Growth Survey, which kicks off the second annual cycle of economic policy coordination in the Union. First, of course, we address fiscal consolidation and the financial sector. We also outline which structural reforms are most necessary to jobs and growth, in particular as regards human capital, and how to make public administration more effective.

After discussing stability culture as the core principle of economic governance, in both monetary and fiscal policy, Rehn announced two proposals for the following day, aiming at further stability to fiscal policy of the euro area:

The first proposal underpins national stability culture by requiring numerical fiscal rules on the budget balance, in line with medium-term budgetary objectives of the Stability and Growth Pact. Such rules shall cover the whole government and be of binding, preferably constitutional, nature. You are right if this reminds you of the Schuldenbremse.

Moreover, we propose independent fiscal councils at national level to underpin robust budgetary planning. We also aim to complete the coordination of national budgetary cycles at the European level. In the so-called European Semester in the first half of each year, we evaluate the multi-annual budgetary plans at EU level. But for euro area countries, we need to make sure that the national budgets are in line with the obligations of the SGP before they are enacted. Thus the Commission should take a look at draft budgets by 15 October at the latest, and if needed issue its opinion.

Our second proposal is reserved for such euro-area countries that receive financial assistance. For them, the enhanced surveillance and the monitoring of programme conditionality will be required through law.

These proposals can be implemented within the current EU Treaties. But strengthening the Economic and Monetary Union further would require changes to the Treaty. The President of the European Council, together with the Presidents of the Commission and the Eurogroup, are now identifying what kind of changes the deepening of political and economic integration within the euro area may require in the longer term.

Rehn turned to the hotly debated eurobonds, in a manner tuned in to his German audience:

Tomorrow, the Commission will present a Green Paper on the rationale, preconditions and possible options of financing public debt through eurobonds – better called stability bonds. While the prospect of introducing stability bonds could help alleviate the sovereign debt crisis, I am also aware of the sometimes strong opposition against them.

For me, it is clear that any type of Eurobonds would have to go in parallel, hand in hand, by a substantially reinforced fiscal surveillance and policy coordination, as an essential counterpart. Stability Bonds would require that any step in the further sharing of risk would have to be balanced by provisions that ensure sustainable public finances and avoid free-riding on the consolidation efforts of others. This would have implications for fiscal sovereignty, which calls for a substantive debate in member states.

In other words, a profound reform of economic governance towards deeper policy integration is a necessary precondition for any serious move towards introducing stability bonds. Thus, the Commission's proposals tomorrow really constitute an interlinked package, which builds on the recent reform of economic governance and stability mechanisms, and at the same time outlines a roadmap towards the next stage of an ever closer and sturdier economic union, in both dimensions.

This comments offer a background to the publications the following day, and for future blog posts.



Ralf Grahn

EU2020: Denmark aims for high employment

In the blog post Denmark: Competitiveness challenges we found slow productivity growth as well as high and rising wage costs among the major hurdles for the future of the Danish economy.

What does the National Reform Programme (NRP) tell us about growth-enhancing structural reforms in Denmark?

The Danish Government's NRP in English:

Denmark's National Reform Programme (May 2011; 67 pages)


Employment rate

The more people work, the more they pay taxes and social contributions. This is good for the budget balance, especially when the demand for social benefits decreases when people move into employment. The ”work first” principle of the Swedish government guides decisions not only on taxes and benefits, but practically every aspect of government policy.

The more successful societies seem able to mobilise more talent than the governments in the less competitive countries. Participation by women and real retirement ages are obvious factors, as are youth, people with an immigration background, the unemployed and various marginal groups.

Denmark is well known for its flexicurity model, but the government of the day promised further reforms in order to reach an employment rate of 80 per cent among 20-64 year olds by 2020 (page 14).

Denmark, like some of the other highly competitive EU member states, targets a clearly higher employment rate than the EU2020 headline target of 75 per cent.

According to Eurostat, the Danish employment rate 76.1 per cent already surpassed the EU end goal in 2010.

The European Union as a whole (EU-27), with an employment rate of 68.6 per cent, has a steep climb ahead of it to reach even the 75 per cent target by 2020.

The Danish NPR offers inspiration based on a constant stream of Initiatives to promote labour supply and employment (Box 2.1, pages 15-16).

The NPR of Denmark (page 17) found that the national efforts were in line with the Annual Growth Survey COM(2011) 11 from the European Commission, where the recommendations to mobilise the labour markets and to create job opportunities are found on the pages 5-7.

However, the AGS found that the European Union as a whole was going to miss the much lower headline goal of 75 per cent on existing trends, so there is a great need for effective labour market reforms in the EU member states.



Ralf Grahn

Olli Rehn asserts budget consolidation and structural reform

The EU commissioner for economic and monetary affairs, Olli Rehn, Friday tried using reason with regard to the eurozone bond market turmoil:

Ongoing developments in the eurozone; 5 August 2011 SPEECH/11/540

According to Rehn, the latest market run on members of the euro area is not reasonable:

The spread of bond-market tensions across the euro area is, however, not justified by economic and budgetary fundamentals. Economic recovery is proceeding in most parts of the euro area, while important steps in budgetary consolidation and structural reform are underway across Europe and in particular in those Member States most exposed to market tensions.

My blog entry Rehn asserts eurozone recovery concluded that the commissioner had documented his case regarding growth, in the European Union as a whole and Cyprus, Italy and Spain specifically. (Naturally, if the markets turn ugly enough, anything can happen.)

I noticed that fellow blogger Protesilaos Stavrou fired a new broadside at the EU leadership - including José Manuel Barroso, Herman Van Rompuy and Olli Rehn – for ”challenging reason and real world facts”.

Should we look a bit more specifically at Rehn's assertion about budgetary consolidation and structural reform?


European Semester

The European Commission started the first beefed-up and streamlined planning cycle called the European Semester by a 12 January 2011 communication from Rehn's DG Ecfin. The AGS is available in 22 official EU languages; here the English version:

Annual Growth Survey: advancing the EU's comprehensive response to the crisis; Brussels, 12.1.2010 COM(2011) 11 final (10 pages)

DG Ecfin offers all interested readers an informative web page Stability and Convergence Programmes (or updates) and National Reform Programmes 2011, where you can find links to the national programmes for sustainable public finances (Stability and Growth Pact SGP) and for growth-enhancing reforms in line with the Europe 2020 strategy.

Although you have to look separately for intermediary stages, such as European Council conclusions and contributions by various Council configurations, there are links to the Commission staff working papers and proposed recommendations for the euro area and for each member state (including Cyprus, Italy and Greece).

The Ecofin Council concluded the first European Semester by issuing recommendations regarding both budget consolidation and structural reforms, exactly six months after the publication of the AGS.

Having been published in the Official Journal of the European Union, these recommendations and opinions are available in the EU language of your choice:

COUNCIL RECOMMENDATION of 12 July 2011 on the implementation of the broad guidelines for the economic policies of the Member States whose currency is the euro; OJEU 23.7.2011 C 217/15

COUNCIL RECOMMENDATION of 12 July 2011 on the national reform programme 2011 for Cyprus and delivering a Council opinion on the updated stability programme of Cyprus, 2011-2014; OJEU 16.7.2011 C 210/12

COUNCIL RECOMMENDATION of 12 July 2011 on the National Reform Programme 2011 of Italy and delivering a Council opinion on the updated Stability Programme of Italy, 2011-2014; OJEU 21.7.2011 C 215/4

COUNCIL RECOMMENDATION of 12 July 2011 on the National Reform Programme 2011 of Spain and delivering a Council opinion on the updated Stability Programme of Spain, 2011-2014; OJEU 19.7.2011 C 212/1

***

Having read the AGS and the recommendations and opinions, I invite readers to demonstrate where Rehn went over board in his assertion about budgetary consolidation and structural reform. (Again, a stampede can obliterate the worthiest intentions.)



Ralf Grahn

European Council: Economic policy reform priorities II

The European Council referred ”further” to the Annual Growth Survey (AGS) from the Commission – in a footnote – when it endorsed ”the” (which?) priorities for fiscal consolidation and structural reform, as we saw in Part One.

If, for the European Council, the work of the Commission was the base of the iceberg somewhere deep down, the submerged Council configurations in the same footnote were placed only marginally higher, in footnote 1 to paragraph 2:

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

Source:

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


Ecofin 15 February 2011

Naturally, the European Council did not link to the relevant Council conclusions or documents, neither did it identify the documents in an exact manner.

However, if we search among Council meetings, only the Economic and Financial Affairs Council (Ecofin) seems to have convened on 15 February 2011.

Having identified the Council configuration, we need to retrieve the Ecofin conclusions in order to find out what the European Council aligned itself with (at least broadly):

3067th Council meeting Economic and Financial Affairs; Brussels, 15 February 2011 (Council document 6514/11)

On page 12, Ecofin dealt with preparation of the March European Council. Under the sub-heading 'EU 2020 strategy: Macroeconomic and fiscal guidance to the member states' we are able to read that the Council adopted conclusions to be found in a further document, 5991/11 [link in original, but did not work in my browser], and that Ecofin agreed to submit them to the European Council with a view to its meeting on 24 and 25 March.

Having verified Ecofin adoption, we can get acquainted with the substance in:

EU 2020: Macroeconomic and fiscal guidance – Draft Council Conclusions; Brussels, 7 February 2011 (Council document 5991/11; 7 pages)

Ecofin welcomes the Annual Growth Survey, treats the issues in the context of the European semester, and it refers to the Integrated Guidelines. The Council calls for ambitious country-specific recommendations from the Commission and ambitious measures by the EU member states.

Both the Commission's AGS and Ecofin's conclusions are written in a businesslike enough manner to be almost apolitical, but they are separate documents, difficult to compare, since no paper trail is created, no explicit choices made.

Likewise upwards in the hierarchy, the European Council creates its own ”masterpiece”, only vaguely acknowledging some sources of inspiration.

The discontinuity between the Council and the European Council, again, leaves readers wondering what the EU actually is committed to.

Is this good governance, openness, closeness to the citizen?



Ralf Grahn



P.S. Presseurop contributes to a European online public space, by offering a daily selection of quality press articles in ten languages to interested readers. Add to your reader, sign up to Presseurop's daily newletter or bookmark your language version.

European Council: Economic policy reform priorities I

What impetus, political directions and priorities did the spring European Council provide the EU and the member states with regard to economic policy?

The European Council speaks through its conclusions:

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


Procedure

The European Council adheres to the improved policy planning cycle put into practice since the beginning of 2011 and known as the European semester. Each EU member state is going to present the final version of two programmes (by the end of April):

a) each euro area member a Stability Programme, and for a state which still has not adopted the euro currency a Convergence Programme, in accordance with the Stability and Growth Pact (SGP);

b) a National Reform Programme (NPR) as a means towards the Europe 2020 strategy aims of smart, sustainable and inclusive growth.

The European Commission will then have a further chance to issue opinions and recommendations aimed at individual member states (end of May or beginning of June).

Different Council configurations can be expected to contribute with their grain of wisdom, before the June 2011 European Council concludes the first integrated planning cycle, laying the foundation for the ultimate success or failure of the policies for sustainable public finances and the EU2020 decade of growth reforms in the European Union.

The next steps are schematically outlined in paragraph 2 of the European Council conclusions:

2. Within the new framework of the European semester, the European Council endorsed the priorities for fiscal consolidation and structural reform (1). It underscored the need to give priority to restoring sound budgets and fiscal sustainability, reducing unemployment through labour market reforms and making new efforts to enhance growth. All Member States will translate these priorities into concrete measures to be included in their Stability or Convergence Programmes and National Reform Programmes. On this basis, the Commission will present its proposals for country-specific opinions and recommendations in good time for their adoption before the June European Council.

European semester

The clearest exposition of the European semester is probably the Commission memo (with links to relevant proposals):

European semester: a new architecture for the new EU Economic governance – Q&A; Brussels, 12 January 2011 (MEMO/11/14)

See also Grahnlaw Suomi Finland: EU EPSCO Council: Recalling the European semester.

In Finnish, for instance 'EU:n talouspolitiikan eurooppalainen ohjausjakso (European Semester)' or in Swedish 'Katekes och mässbok för EU-toppmötet'.


”The priorities”

Even if later paragraphs add some text, without the footnote (1) in paragraph 2 of the European Council conclusions we would have been even more ignorant with regard to what ”the priorities” for fiscal consolidation and structural reform are:

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

Without this footnote, readers would have been totally lost. However, the European Council seems to care little about offering readers convenient guidance through links to relevant documents or even exact references. ”In line with” is sibylline enough, but we are invited to embark on a search for four different documents.

Adding to opacity and poor governance, the European Council generally does not acknowledge even the documents specifically submitted to it by different Council configurations.


Annual Growth Survey (AGS)

Even if the European Council refers to the first Annual Growth Survey (AGS) in an off-hand manner, this is the logical place to start. This communication from the Commission is the synthesis or catechism of needed macro-economic and growth-enhancing reforms:

Annual Growth Survey: advancing the EU's comprehensive response to the crisis; Brussels, 12.1.2010 COM(2011) 11 final (10 pages, plus three annexed reports)

Back in January, the reports annexed to the Annual Growth Survey were:

Annex 1: Progress report on Europe 2020 (16 pages)

Annex 2: Macro-economic report (23 pages)

Annex 3: Draft Joint Employment Report (13 pages)

The draft JER has since then become the Joint Employment Report, as adopted by the Council EPSCO) 7 March 2011.

See also Grahnlaw: EU EPSCO and Competitiveness Council: Annual Growth Survey is cornerstone.


The foundation

As we have seen, the off-hand remark by the European Council regarding the Annual Growth Survey from the Commission actually leads us to four documents (62 pages in all), instead of one.

Thanks to the proactive stance of the Commission, in the AGS we have a foundation on which later Council and European Council conclusions are built.

Part II is going to look at the Council documents the European Council referred to.



Ralf Grahn



P.S. What happens in Europe? With updates from media on European affairs and from 28 countries – more than 1000 newspapers - you can find out directly in a few instances through EUfeeds. Bookmark this great service from the European Journalism Centre.

The real Europe 2020 summit?

In a few days, the political leaders of the EU member states meet to assess progress towards the strategic economic goals of the European Union and to inspire improved performance on the reform trail.

This is the first spring European Council during the European Semester and the Europe 2020 strategy. The new policy cycle was kicked off by the Annual Growth Survey (AGS), which summarises ten priority actions discussed in more detail in various reports and Council conclusions.

In addition to improving macro-economic coordination, an important part of the European Council 24 to 25 March 2011 challenge relates to the Europe 2020 Strategy (EU2020), the EU's growth strategy for this decade.

Not only should there be economic growth, but the European Union should enjoy the rewards of smart, sustainable and inclusive growth.


Lisbon Council

Ahead of the real summit for growth and jobs, the think tank The Lisbon Council arranged a timely high level seminar called The Europe 2020 Summit.


José Manuel Barroso

Yesterday I discussed the keynote address by José Manuel Barroso, the president of the European Commission, in a post on Grahnlaw Suomi Finland: Europe 2020: Pipe dream or saviour of the decade?


An Action Plan for Europe 2020

The conference saw the publication of an interesting Lisbon Council policy brief 'An Action Plan for Europe 2020: Strategic Advice for the Post-Crisis World' (32 pages), with contributions by twelve authors.

By offering one short(ened) quote per contributor, I hope to whet your appetite for the whole of the publication.

Ann Mettler: At some point, Europe has to do what it purportedly set out to do.

Wim Kok: We have always known that implementation was Europe's weak spot, so the question of enforcement is key.

Andreas Schleicher: Countries need to improve their skill base throughout the population and capitalise on the full potential of all individuals.

Enrico Giovanni: For an ambitious, all-encompassing strategy like Europe 2020, indicators must be as close to people as possible, as widely disseminated as possible, as shared by stakeholders as possible, and as well and regularly used by media as possible to make them central in the public discourse.

Martin Schuurmans: Entrepreneurship (combined with higher education) and better understanding of customers, markets and sales channels are the key drivers of innovation.

Alessandro Leipold: This broad strategy has been narrowed down in the Commission's Annual Growth Survey into 10 priority actions, endorsed by the Economic and Financial Affairs Council a month ago. The primary concern now must be to give these actions teeth and see to their full implementation.

Harry Verhaar: Today, as we tackle the triple challenge of dwindling global resources (energy, raw materials, water and food), sustainability and climate change, the direction we need to go is crystal clear, but the momentum is just too weak. We are simply not getting to the solutions quickly enough.

Geoff Mulgan: As the Innovation Union strategy recognised, for Europe to thrive, innovation has to be cultivated in every field.

Žiga Turk: Today, Europe does not have a single company among the top 20 in BusinessWeek's Tech 100 list. Europe's failure to be competitive in the ICT sector is just a symptom. The causes are deeper.

Mark Spelman: Ageing, resource constraint and new technologies are three examples of underexploited potential growth sectors.

Sören Stamer: Europe tends to optimise existing structures, while Silicon Valley has a greater appetite for radical change.

Parag Khanna: European leaders cannot let internal economic obstacles overcome the imperative of building a long-term basis for growth and inlfuence on the world stage.


Real summit?

Practically every contributor offers policy recommendations worth consideration and more: implementation.

If the European Council is not up to that, perhaps the Lisbon Council conference was the real EU2020 summit after all.



Ralf Grahn



P.S. Today's Grahnlaw recommendation is one of my favourite French blogs on legal and political issues: Diner's room, by Jules.

EU2020 strategy: European Parliament feels abandoned

On 17 February 2011 the European Parliament adopted a resolution 'Europe 2020' (P7_TA(2011)0068), which had been tabled by the EPP, S&D, ALDE, Greens/ALE and ECR groups.

In the larger context of the the Commission communication 'Europe 2020' and the European Council conclusions adopting the Europe 2020 strategy for smart, sustainable and inclusive growth, the resolution homed in on the first 'Annual Growth Survey' from the European Commission.

Why?


Weak governance

After the lost decade of the Lisbon strategy it is hardly surprising that trust in intergovernmental policy coordination (and the heads of state or government) is low.

Discussions in the Council, the eurozone and the European Council to strengthen fiscal responsibility and to promote economic reform have tended to bring forward pacts and solutions even more intergovernmental in nature and origin.

Given the objective background and its own interests as a corporation, the European Parliament pointed towards the clay feet of the EU2020 strategy and called for strengthening of the foundations:

Governance of the Europe 2020 Strategy should be strengthened

1.  Underlines that the Europe 2020 actions are of crucial importance to the future prospects of all European citizens, delivering sustainable jobs, long-term economic growth, and social progress; fears that the Europe 2020 strategy will not be able to deliver on its promises due to its weak governance structure, and strongly urges the Council, therefore, to strengthen the Community method; reiterates the importance of integrating the EU 2020 goals into the economic governance framework and calls for the European Semester to be part of the legislative governance package, while including national parliaments and social partners at an early stage in order to foster democratic accountability, ownership and legitimacy; stresses that the achievement of Europe 2020 is essential and not optional;

2.  Considers the Annual Growth Survey and the framework of the European Semester as crucial tools for an enhanced coordination of economic policies; stresses, however, that they should not replace nor diminish the importance of the existing tools provided by the Treaty, in particular the broad economic policy guidelines and employment guidelines of Member States, in which Parliament is strongly involved and consulted; underlines the need for consistency with the achievement of the five headline targets for the Europe 2020 strategy agreed by the European Council and Commission with a view to ensuring its success;

Annual Growth Survey (AGS)

From the beginning of 2011, Europe 2020 policy co-ordination takes place in the framework of the European Semester. The first manifestation of the new planning tool was the Annual Growth Survey (AGS), which presents the economic policy challenges in a nutshell:

Annual Growth Survey: advancing the EU's comprehensive response to the crisis; Brussels, 12.1.2010 COM(2011) 11 final (10 pages)

On substance, the call from the Commission is clear (page 3):

To avoid stagnation, unsustainable debt trends, accumulated imbalances and ensure its competitiveness, Europe needs to accelerate the consolidation of its public finances, the reform of its financial sector and to frontload structural reforms now.

The communication from the Commission sets out ten priority actions. The AGS is the ”catechism” of the economic policy and reform discussion in the European Union right now.

However, it seems to speak exclusively at or with the heads of state or government (European Council), even if the Annual Growth Survey ”is also transmitted to the European Parliament and to the other Institutions and national parliaments”.

Is this a winning formula for the EU2020 strategy where the Lisbon strategy failed?



Ralf Grahn



P.S. Global in scope, Conflict of Laws .net is a news and discussion portal to those interested in the conflict of laws (aka private international law).

EU EPSCO and Competitiveness Council: Annual Growth Survey is cornerstone

You can discuss with @ronpatz on Twitter under #Eupilot and follow him blogging live from the EU Competitiveness Council on the Bloggingportal.eu blog.

In order to structure our thinking I have posted two entries today on the Europe 2020 (#EU2020) themes being prepared for the economic and social summit, the European Council 24 to 25 March 2011.

The first post was about the central theme of the EPSCO Council on employment and social affairs, in: EU Council (EPSCO): EU2020 and March European Council. The second one offered a reminder about the new economic governance tool: EU EPSCO Council: Recalling the European semester.

If you look at the Background note on Competitiveness Council 9 to 10 March 2011, prepared by the Council secretariat, you will notice how crucial the first concrete manifestation of the European semester is, during both days: the Annual Growth Survey (AGS).

Thus, an introduction to help you put these things into perspective.


Annual Growth Survey (AGS)

Describing the new economic governance, the European Commission said that January 2011 launched the first European Semester of ex-ante policy co-ordination starting with this Annual Growth Survey which is anchored in the Europe 2020 strategy.

The Commission communication on the first Annual Growth Survey (AGS) was presented 12 January 2011, and it is available in 22 official EU languages. Here is a link to the English language version:

Annual Growth Survey: advancing the EU's comprehensive response to the crisis; Brussels, 12.1.2010 COM(2011) 11 final (10 pages)


Ten proposed actions

A more detailed analysis underpinning the Commission's assessment was set out in three reports that accompanied the Communication and included an assessment of the initial setting up of the Europe 2020 (EU2020) strategy at member state level.

In the first Annual Growth Survey the Commission set out ten actions for the EU in 2011/2012, anchored in the EU2020 strategy. Since the communication is clear and fairly brief exposition of EU reform plans for the economy and employment, it is worth reading.

Key challenges

To refresh your memory, here are the main headlines and the ten proposed actions, based on the Commission's evaluation of the economic challenges the EU should address and with its main recommendations to the member states:

I. MACRO-ECONOMIC PRE-REQUISITES FOR GROWTH
1. Implementing a rigorous fiscal consolidation
2. Correcting macro economic imbalances
3. Ensuring stability of the financial sector

II. MOBILISING LABOUR MARKETS, CREATING JOB OPPORTUNITIES
4. Making work more attractive
5. Reforming pensions systems
6. Getting the unemployed back to work
7. Balancing security and flexibility

III. FRONTLOADING GROWTH –ENHANCING MEASURES
8. Tapping the potential of the Single Market
9. Attracting private capital to finance growth
10. Creating cost-effective access to energy


For an overview you can access the web page of DG Economic and Financial Affairs (ECFIN) titled 'Commission publishes Annual Growth Survey', with links to the communication mentioned above, as well as press releases and speeches, not to forget the annexed reports I missed at an earlier stage when I searched the Council website:

AGS Annex 1: Progress report on Europe 2020 (16 pages)

AGS Annex 2: Macroeconomic report (23 pages)

AGS Annex 3: Draft Joint Employment Report (13 pages)



Ralf Grahn



P.S. Did you know that the posts of 774 Euroblogs are already aggregated by multilingual Bloggingportal.eu?