Transcript Europe 2020 and the European Economic Governance

Silvia Borelli
University of Ferrara
» 3 priorities - The Europe 2020 strategy is about delivering growth that
is: smart, through more effective investments in education, research
and innovation; sustainable, thanks to a decisive move towards a lowcarbon economy; and inclusive, with a strong emphasis on job creation
and poverty reduction.
» 5 targets
1. Employment : 75% of the 20-64 year-olds to be employed
2. R&D : 3% of the EU's GDP to be invested in R&D
3. Climate change and energy sustainability : greenhouse gas emissions
20% (or even 30%, if the conditions are right) lower than 1990; 20% of
energy from renewables ; 20% increase in energy efficiency
4. Education : Reducing the rates of early school leaving below 10%; at
least 40% of 30-34–year-olds completing third level education
5. Fighting poverty and social exclusion : at least 20 million fewer people in
or at risk of poverty and social exclusion
» 7 Flagship Initiatives
Digital agenda for Europe
Innovation Union
Youth on the move aims … to facilitate the entry of young
people into the labour market
Resource efficient Europe
An industrial policy for the globalisation era
An agenda for new skills and jobs aims to modernise labour
markets and empower people by developing their skills and
improving flexibility and security in the working environment;
to help workers seek employment across the EU more easily
in order to better match labour supply and demand.
European platform against poverty aims to ensure social and
territorial cohesion by helping the poor and socially excluded
to get market and become active members of society.
Since Spring 2011, the European Semester has combined
within a single annual policy coordination cycle two distinct
governance and coordination mechanisms: the
macroeconomic surveillance process and the employment
and social policy coordination.
The two processes are grounded on very different
regulatory frameworks and are based on different methods
of coordination: the macroeconomic coordination
mechanism is largely grounded on hard treaty-based
regulations; while the employment policy coordination
mechanism is based on a soft coordination mechanism
(“Open Method of Coordination”).
» “Six-Pack"
Regulation (EU) No 1173/2011 of the European Parliament and of the Council of 16
November 2011 on the effective enforcement of budgetary surveillance in the euro
area
Regulation (EU) No 1174/2011 of the European Parliament and of the Council of 16
November 2011 on enforcement measures to correct excessive macroeconomic
imbalances in the euro area
Regulation (EU) No 1175/2011 of the European Parliament and of the Council of 16
November 2011 amending Council Regulation (EC) No 1466/97 on the strengthening
of the surveillance of budgetary positions and the surveillance and coordination of
economic policies
Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16
November 2011 on the prevention and correction of macroeconomic imbalances
Council Regulation (EU) No 1177/2011 of 8 November 2011 amending Regulation
(EC) No 1467/97 on speeding up and clarifying the implementation of the excessive
deficit procedure
Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary
frameworks of the Member States
Six Pack
Entered into force on 13 December 2011.
It applies to 28 MS with some specific rules for euro-zone
Member States.
It strengthens the Stability and Growth Pact (SGP),
reinforcing both the preventive and the corrective arm of
the Pact, i.e. the Excessive Deficit Procedure (EDP).
It introduces reverse qualified majority voting (RQMV) for
most sanctions (RQMV implies that a recommendation or a
proposal of the Commission is considered adopted in the
Council unless a qualified majority of Member States votes
against it).
Reg. 1174 and 1176 set up the Macroeconomic Imbalance
Procedure
http://ec.europa.eu/economy_finance/economic_governance
/macroeconomic_imbalance_procedure/index_en.htm
Macroeconomic Imbalance Procedure:
» aims to identify imbalances in Member States’
economies much earlier than before.
» monitors national economies in detail and alerts the
EU institutions to potential problems ahead.
» uses a scoreboard that tracks changes in 11 economic
indicators, such as labour costs.
» Each November, the Commission publishes the
results in the Alert Mechanism Report. The report
identifies Member States that require further analysis
(an in-depth review).
» If the Commission concludes that excessive
imbalances exist in a Member State (for example,
wage rises that are not in line with productivity
increases ), it may recommend to the Council that
the Member State draw up a corrective action plan.
This recommendation is adopted by the Council.
» The Commission and Council monitor the Member
State throughout the year to check whether the
policies in the corrective action plan are being
implemented.
» if the Commission repeatedly concludes that a euro
area Member State's corrective action plan is
unsatisfactory, it can propose that the Council levy a
fine of 0.1% of GDP a year.
» Penalties can also be levied if Member States fail to
take action based on the plan (starting with an
interest-bearing deposit of 0.1% of GDP, which can
be converted to a fine if there is repeated noncompliance).
» The sanctions are approved unless a qualified
majority of Member States overturn them.
» Treaty on Stability, Coordination and Governance
Entered into force on 1 January 2013.
Intergovernmental agreement (no involvement of European Parliament)
signed by 25 EU Member States (all but UK and Czech Republic).
TSCG is binding for all euro-zone Member States, while other contracting
parties will be bound once they adopt the euro or earlier if they wish.
It requires contracting parties to respect/ensure convergence towards the
country-specific medium-term objective (MTO), as defined in the SGP.
Budget rules shall be implemented in national law through provisions of
"binding force and permanent character, preferably constitutional“ (in
Italy: L. Cost. 1/2012). European Court of Justice may impose financial
sanction (0.1% of GDP – for Italy: 390 Million €) if a country does not
properly implement the new budget rules in national law.
The State shall balance revenue and expenditure in
its budget, taking account of the adverse and
favourable phases of the economic cycle.
No recourse shall be made to borrowing except for
the purpose of taking account of the effects of the
economic cycle or, subject to authorisation by the
two Houses approved by an absolute majority vote of
their Members, in exceptional circumstances.
» “Two-Pack"
Entered into force on 30 May 2013
Regulation on common provisions for monitoring and assessing
draft budgetary plans and ensuring the correction of excessive
deficit of the Member States in the euro area.
Regulation on the strengthening of economic and budgetary
surveillance of Member States experiencing or threatened with
serious difficulties with respect to their financial stability in the
euro area.
Applicable to euro-area Member States only.
Euro-area Member States shall submit their draft budgetary plan
for the following year to the Commission and the Eurogroup
before 15 October.
If the Commission assesses that the draft budgetary plan shows
serious non-compliance with the SGP, the Commission can require
a revised draft budgetary plan.
November
The Annual Growth Survey (AGS) sets out overall economic
priorities for the EU and provides Member States with policy
guidance for the following year. It starts the European Semester.
The Alert Mechanism Report (AMR) screens Member States for
economic imbalances. Based on a scoreboard of indicators, the
AMR identifies the Member States that require further analysis,
in the form of in-depth reviews, in order to detect potential
imbalances and ascertain their nature.
The Commission publishes its opinions on draft budget plans.
December
Euro area Member States adopt final annual budgets, taking into
account the Commission's advice and finance ministers' opinions.
February/March
The European Council adopts economic priorities for the EU, based
on the AGS.
The Commission publishes a Country Report for each Member
State analysing Member States' economic and social policies. It
includes in-depth reviews of Member States with potential
imbalances (those identified in the AMR). The in-depth review
confirms or refutes the existence of imbalances and whether they
are excessive or not. Member States are requested to take the
findings of the in-depth review into account in their reform plans
for the following year.
April
Member States submit their Stability/Convergence Programmes
and their National Reform Programmes.
May
The Commission proposes country-specific recommendations (CSRs), tailored
policy advice to Member States based on the priorities identified in the AGS
and information from the plans received in April. The CSRs (adopted on the
basis of Articles 121 and 148 TFEU) relate to four broad policy areas: public
finances; the financial sector; structural reforms; employment and social
policies.
June/July
The European Council endorses the CSRs, and EU ministers meeting in the
Council discuss them.
EU finance ministers (ECOFIN) ultimately adopt them in July.
October
Euro area Member States submit draft budget plans for the following year to
the Commission (by 15 October). If a plan is out of line with a Member State's
medium-term targets, the Commission can ask it to be redrafted.
» In 2016 AGS, 3 pillars have been established :
I - re-launching investment
II - pursuing structural reforms to modernise our economies
III - responsible fiscal policies.
The 2016 AGS is published alongside a set of documents:
Alert Mechanism Report
Draft Joint Employment Report
Recommendations for the euro area
Proposal for regulation on the Structural Reform Support Programme
In order to better understand employment and social trends, the
macroeconomic imbalances procedure scoreboard used in the Alert Mechanism
Report contains three new employment indicators: the activity rate, long-term
unemployment and youth unemployment. Moreover, the country reports
published in February refer to a variety of employment and social indicators.
A Social Impact Assessment (SIA) of the redistributive effects of the support
measures should be adopted for programme countries. The first (and only)
application of this tool was made in August 2015 for Greece and carried out by
DG EMPL.
» Communication: Towards a job-rich recovery
» Commission staff working document: Quality framework for traineeships (2012)
» Commission staff working document on exploiting the employment potential of
the personal and household services (2012)
» Commission staff working document: Reforming EURES to meet the goals of
Europe 2020 (2012)
» Commission staff working document: Implementing the Youth Opportunities
Initiative - First steps taken (2012)
» Commission staff working document on labour market trends and
challenges (2012)
» Commission staff working document: Open, dynamic and inclusive labour
markets (2012)
» Commission staff working document: Exploiting the employment potential of
ICTs (2012)
» Commission staff working document on an action plan for the EU healthcare
workforce (2012)
» Commission staff working document: Exploiting the employment potential of
green growth (2012)
» 3 main axes:
1. Supporting job creation: Focus more on demandside (Exploit job creation in 3 new sectors: green
economy, health & social services, ICT); Reduce tax
on labour (but also reduce employer social security
contributions); Tackle undeclared work; Modernise
wage-setting systems to align wages with
productivity developments.
2. Restoring dynamics of labour markets: Reform labour markets
by encouraging companies' internal flexibility, and reducing the
labour market segmentation between those in precarious
employment and those on more stable employment; Invest in
skills; Moving towards a European labour market.
3. Improving EU governance: Reinforcing coordination and
multilateral surveillance in employment policy by publishing a
benchmarking system with selected employment indicators
together with the draft Joint employment report and developing a
reform tracking device to keep track of progress
implementing national reform programmes; Effectively involving
the social partners in the European semester by setting up an EU
tripartite format for monitoring and exchanging views on wage
developments; strengthening the link between employment
policies and relevant financial instruments.
» Youth Employment Package includes:
A recommendation on introducing a Youth Guarantee in each
Member State to ensure that all young people up to age 25
receive a quality offer of a job, continued education, an
apprenticeship or a traineeship within four months of leaving
formal education or becoming unemployed – adopted by the
Employment and Social Policy Council (EPSCO) in February 2013.
Second-stage consultation of EU social partners on a quality
framework for traineeships.
The announcement of a European Alliance for Apprenticeships
and ways to reduce obstacles to mobility for young people.
A Youth Employment Initiative proposed by the 7-8 February 2013
European Council with a budget of €6 billion for the period 201420.
Communication from the Commission: Towards Social Investment for Growth and Cohesion –
including implementing the European Social Fund 2014-2020 (2013)
Commission Recommendation: Investing in Children – breaking the cycle of disadvantage (2013)
Staff working document: Evidence on Demographic and Social Trends – Social Policies' Contribution
to Inclusion, Employment and the Economy (Part 1) (2013)
Staff working document: Evidence on Demographic and Social Trends – Social Policies' Contribution
to Inclusion, Employment and the Economy (Part 2) (2013)
Staff working document: Follow-up on the implementation by the Member States of the 2008
European Commission recommendation on active inclusion of people excluded from the labour
market -– Towards a social investment approach (2013)
Staff working document: 3rd Biennial Report on Social Services of General Interest (2013)
Staff working document: Long-term care in ageing societies – Challenges and policy options (2013)
Staff working document: Confronting Homelessness in the European Union (2013)
Staff working document: Investing in Health (2013)
Staff working document: Social investment through the European Social Fund (2013)
» It focuses on:
Ensuring that social protection systems respond to
people's needs at critical moments throughout their lives.
Simplified and better targeted social policies, to provide
adequate and sustainable social protection systems.
Upgrading active inclusion strategies in the Member
States. Affordable quality childcare and education,
prevention of early school leaving, training and job-search
assistance, housing support and accessible health care are
all policy areas with a strong social investment dimension.