Ministers back closer EU ‘surveillance’ of national economies

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EU finance ministers on Tuesday supported greater EU involvement in monitoring national economic policies, agreeing that more "candid" policy recommendations could be made to member states on issues such as employment, education or the fight against poverty.

"Enhanced country surveillance will be fundamental to achieving the overriding goals of the Europe 2020 strategy" for growth and jobs, the ministers said in a statement after a meeting in Brussels on Tuesday (16 March).

"This would include both the issuing of more precise and candid policy recommendations to member states and a closer follow-up of recommendations than in the past," the ministers added in a reference to the defunct Lisbon Strategy for growth and jobs.

The European Commission unveiled its draft 'Europe 2020' strategy earlier this month, proposing a limited set of targets on education, R&D and poverty reduction and "policy warnings" for EU countries that fail to meet them (EurActiv 03/03/10).

The move followed a chorus of criticism that reforms agreed under the Lisbon Agenda - the Europe 2020 strategy's predecessor - were not properly implemented at national level, with EU leaders ignoring their European pledges as soon as they returned to their capitals.

The ministers particularly supported "the active involvement" of EU heads of state "both in discussing these issues on a regular basis and providing political guidance in individual policy areas and in assessing progress towards the Europe 2020 targets".

National leaders will meet later this month to discuss the strategy's overall approach, with country-specific programmes to be agreed at the June EU summit.

Germany wants to keep Stability and Growth Pact reporting separate

While supporting stronger coordination of national economic policies, finance ministers also called for better timing of EU monitoring processes "with a view of enhancing the overall consistency of policy advice to member states".

The reference to better timing came in response to German concerns about national reporting under the euro zone's Stability and Growth Pact, which limits public deficits to 3% of GDP.

In its draft Europe 2020 plan, the European Commission proposed that Europe 2020 and Stability and Growth Pact reporting "be done simultaneously" in order to "bring the means and the aims together" (EurActiv 03/03/10). But German Chancellor Angela Merkel expressed fears that closely linking the two would make fiscal surveillance "unnecessarily political" (EurActiv 03/03/10).

"The chancellor has said - and the German position still is - that we don't want any mix between the Stability and Growth Pact and the Europe 2020 strategy," said an EU diplomat, speaking to EurActiv on condition of anonymity.

"So we don't want to have all the targets in one basket. We don't want the criteria in the Stability and Growth Pact mixed with the criteria in the evaluation of Europe 2020, because they are not two sides of one medal but are complementary."

Evaluations of the strategy and the Stability and Growth Pact could be made at different times, for example, the diplomat said.

However, Germany is not opposed to more intensive surveillance of national reform programmes to be agreed under the new strategy. "The chancellor has said that she is absolutely in favour of stronger and better coordination when it comes to economic policies within Europe," the EU diplomat said.

"When it comes to the Europe 2020 targets, we have always said that we wanted targets that are achievable, which everybody can fulfil and not go back afterwards saying it was too difficult."

Positions: 

In March, the leaders of the three largest political groups in the European Parliament joined forces to call for stronger economic governance in the EU.  In a rare show of cross-party unity, MEPs issued a joint statement urging EU leaders to embrace the need for "incentives and sanctions" in implementing the new economic strategy, dubbed 'Europe 2020'.

Joseph Daul, leader of the European People's Party, Martin Schulz, leader of the Socialists and Democrats, and liberal leader Guy Verhofstadt want EU leaders to abandon the open method of coordination, which uses peer pressure to ensure governments hit their targets, "in favour of stronger instruments".

They say the European Commission should use "all the relevant legal bases in the new Treaty to improve economic coordination and oversee the implementation of national action plans," including the use of incentives and sanctions where appropriate (EurActiv 12/03/10).

Timeline: 
  • 25-26 March: EU summit to discuss the strategy's overall approach and the Commission's proposed headline objectives.
  • Mid-April: Commission totable proposals to reinforce economic policy coordination.
  • 17-18 June 2010: EU summit to adopt further details of the strategy, including country-specific targets.
  • Autumn 2010: Member states to submit stability and convergence programmes, as well as national reform programmes. 
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