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?

EU2020 from failure to action

The heads of state or government reminded themselves of the comprehensive Europe 2020 growth strategy. In the European Council 1-2 March 2012 conclusions (EUCO 4/12, available in 23 languages) they assessed their own work to date:

3. However, efforts undertaken to date remain insufficient to meet most of these targets. It is therefore urgent to concentrate on the implementation of reforms, with a particular attention to measures which have a short-term effect on jobs and growth.

Insufficient reforms

The EU member states are lagging. Brownie points for honesty, although nothing more than the European Commission said in its second Annual Growth Survey 2012 (AGS), which kicked off the European Semester:

Annual Growth Survey 2012 VOL. 1/5; Brussels, 23.11.2011 COM(2011) 815 final (18 pages) 

Progress report on the Europe 2020 strategy VOL. 2/5 - ANNEX I; Brussels, 23.11.2011 COM(2011) 815 final (27 pages) 

Macro-economic report VOL. 3/5 - ANNEX II; Brussels, 23.11.2011 COM(2011) 815 final (21 pages) 

Draft joint employment report VOL. 4/5 - ANNEX III; Brussels, 23.11.2011 COM(2011) 815 final (16 pages) 

Growth-friendly tax policies in member states and better tax coordination in the EU VOL. 5/5 - ANNEX IV; Brussels, 23.11.2011 COM(2011) 815 final (13 pages) 

For those who think that the Commission is evil and biased, even the more recent (22 February 2012) synthesis report on the implementation of the European Semester (Council document 6662/12), prepared by the Danish Council presidency, is relatively open about less than brilliant progress (page 3):

The Annual Growth Survey shows that progress has been made in a number of areas, but much remains to be done.

In particular, measures announced or adopted during 2011 must now be implemented rigorously in all Member States. The economic climate makes this difficult, but should be seen as an incentive to further focus efforts, both at the national and the European level.

Returning to growth

Both the Annual Growth Survey 2012 and the Council synthesis report contained advice on further action. Let us here quote key points the Danish report made (pages 3-4):

Commitments regarding the objectives on poverty, education, innovation and green growth, in particular, should not be set aside while not endangering rigorous fiscal consolidation.

- Fiscal consolidation efforts have been undertaken by almost all Member States but further efforts appear necessary and, in several countries, medium-term budgetary frameworks remain to be strengthened. Ad hoc measures regarding VAT systems taken by some Member States have yet to produce results. There has only been limited progress across Europe as regards the shift of taxation away from labour. The coherence of the measures taken and their impact on growth and fiscal consolidation also remain to be analysed.

- Efforts to increase competitiveness are still needed, in particular, to increase competition in the retail, service and infrastructures sector. While the transposition of the Services Directive in Member States is progressing, more support needs to give to enhancing crossborder labour mobility including by revision of the EU rules on mutual recognition of professional qualifications.

- Improving the environment in which businesses, including SMEs, operate is important, in particular the reduction of unjustified administrative and regulatory burdens.

- Promoting employment is a key policy objective in all Member States. Nevertheless, in many countries, more could be done in terms of active labour market policies and to combat labour market segmentation and excessively rigid employment protection legislation, reform unemployment benefit systems to make work pay and enhance employability of vulnerable groups. Youth unemployment remains of critical concern. Progress on the inclusion of young people in the labour market is still insufficient in several countries.

- Dual training and other reforms are under way in education systems, but investment in education and training is affected by fiscal constraints in a number of Member States. Ensuring quality of public spending in these areas is a particular priority.

- Pension system reforms have been undertaken in some Member States and are under way in a number of others, but their impact is often hampered by early retirement opportunities and special schemes that are still in place.

- The number of people at risk of poverty is on the rise, and has not been effectively addressed. More focus on increasing labour market participation of vulnerable groups could help address this concern. Some countries still have to take action to address the interrelated issues of household indebtedness and housing markets.

Naturally, the countries with the greatest problems are the ones to need the fastest and most dramatic reform, although their past record is the least promising. However, given the sorry state of the economy in almost all of the EU member states, the need for structural reform in the European Union as a whole is profound.

The national leaders have spoken wisely. Now they must act.



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?

European Council: Economic policy reform priorities IV

We continue looking at the governance and practices of the most important official institution of the EU, the European Council, with regard to fiscal consolidation and structural reform.

Having studied the Annual Growth Survey (AGS) from the Commission in Part One, and EU 2020 macroeconomic and fiscal guidance offered by the Economic and Financial Affairs Council (Ecofin) in Part Two, we turned to the contributions by the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) in Part Three, which dealt with employment, poverty and social exclusion.

It was possible to arrive this far in deciphering which priorities for fiscal consolidation and structural reform the European Council broadly endorsed (”In line with”), because someone was graceful enough to insert footnote 1 to paragraph 2, clumsily acknowledging the submerged parts of the iceberg:

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)


Hungarian synthesis report

The European Council did not exactly adopt (”See also”) the synthesis report from the Hungarian presidency of the EU Council, but it is well worth a closer look. Here the Hungarian presidency made a helpful contribution, by offering an overview and by including contributions from other Council configurations besides Ecofin and EPSCO.

There is, however, some ambiguity regarding the right version of the synthesis report and the differences between the various versions. The European Council footnote refers to a document dated 16 March, but if we search more diligently we find both a first revision, dated 16 March, and a second revised version, dated 18 March 2011.

The most obvious difference is that the two later papers are six pages shorter, but no explicit explanation is given in the introductory paragraph on the cover page:

Implementation of the European Semester - Synthesis report; Brussels, 16 March 2011 (document 7745/11; 21 pages)

Implementation of the European Semester - Synthesis report; Brussels, 16 March 2011 (document 7745/1/11 REV 1; 15 pages)

Implementation of the European Semester - Synthesis report; Brussels, 18 March 2011 (document 7745/2/11 REV 2; 15 pages)

The shorter versions speak about an annexed Commission report about meetings with member states concerning their national reform programmes (NPR), but they fail to include the annex. The interesting Commission summary of discussions is found only in the original version.


Contents

As a rough indication of the contents of the synthesis report, I quote the introductory paragraph on the cover sheet (here from the original version, 7745/11):

Delegations will find attached the synthesis report prepared by the Presidency, summarising the discussions and the main political messages of the different Council formations in relation to the Annual Growth Survey, in the framework of the European Semester. The report together with the ECOFIN and EPSCO Council conclusions, will be submitted to the Spring European Council on 24/25 March 2011, which is expected to give guidance to the Member States for the finalisation of their Stability and Convergence Programmes and National Reform Programmes in April. This report is accompanied by a Commission report (see Annex) on the bilateral discussions with Member States carried out during February and March. The Hungarian Presidency’s aim is to close the first European Semester by the time of the European Council in June 2011.

The synthesis report is a clear exposition of the framework: the Integrated guidelines the EU and the member states are committed to, as well as the stages within the new planning cycle called the European Semester.

In addition to the Ecofin and EPSCO Council contributions (acknowledged by the European Council), the synthesis report summarised the contributions by the Competitiveness Council, the Education Council, the TTE Council (Energy) and the Environment Council, constantly reminding the readers of the commonly agreed Europe 2020 (EU2020) and other goals.

The report noted the difficulties in reaching the ambitious goals, mentioned the next steps and expected the spring European Council to give strategic guidance on policies. Each member state would take this guidance into account in its final Stability or Convergence Programme and National Reform Programme (NRP).

Although quite general in tone, the annexed Commission report highlighted questions of interest to the central administrations in the EU member states, including consistency between different processes and programmes, as well as to all ”stakeholders” (regions, local administrations, social partners) engaged in planning and implementing reform programmes.

Good work by the Hungarian presidency!


Submitted documents

Do we find the Hungarian synthesis report among the documents submitted to the European Council?

Nope. Only the annotated draft agenda and the provisional agenda are acknowledged, despite the multitude of submissions we have observed along our route.


Improving the European Council

Which priorities for fiscal consolidation and structural reform did the European Council endorse?

Without the fortunate use of a footnote, we would have been totally lost. We now know that the European Council is more or less in agreement with the conclusions of two Council meetings (”In line with”). It acknowledged the synthesis report from the Hungarian Council presidency as useful information, because it was worth mentioning.

Based on paragraph 2 and footnote 1 of the European Council conclusions, we have been able to unearth the relevant documents on our excavation tour extending to four blog posts.

***

What if the European Council became interested in good governance, better communication, openess and closeness to the citizen?

In my humble opinion, this would require a transparent chain of proposals and decisions.

Instead of continuing to hide non-public (Coreper, Van Rompuy) draft conclusions behind meaningless phrases, the General Affairs Council (GAC) could become an important coordinator and a promoter of improved public discussion ahead of European Council meetings, by tabling concrete proposals, based on Council conclusions.

To these, the European Council would reply seriously, at this stage without becoming a legislative body.

The GAC could also follow up the implementation of European Council decisions in an open manner, through public reports and transparent decisions.

Now the GAC potential is wasted by its self-effacing role, and the public is deprived of the opportunity for a better informed discussion about real issues, before and after European Council meetings.

Positive practices are possible: We saw that the EPSCO Council conclusions linked and gave references to documents in their final form, and they also acknowledged the authors. The Hungarian synthesis report is also worth notice. Kudos!

***

This still leaves us with a few problems relating to the current form of government through European Council conclusions.

Many documents of varying kinds are submitted to the European Council. It cannot pronounce on every paragraph or suggestion in the present format.

On the other hand, if the European Council wants to be known as a Delphic Oracle hovering above mere mortals, by replying to large and complex questions by a few paragraphs, the conclusions easily turn into meaningless commonplaces, serving few needs of guidance or enlightenment.

***

Having studied the submitted texts, how much wiser do we become, if we turn to what the economic spring summit of the European Council itself said about economic policy reform in its conclusions?



Ralf Grahn



P.S. On the bilingual (French and English) EU Weekly blog, the nuclear physicist and citizen blogger Greg Henning follows the euro currency and political events in France and the European Union. Recommended reading.