Transcript Europe 2020 and the European Economic Governance: What

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.
23 Member States, including six outside the euroarea (Bulgaria, Denmark, Latvia, Lithuania, Poland
and Romania), signed the Euro Plus Pact in March
2011. The Pact commits signatories to stronger
economic coordination for competitiveness and
convergence, also in areas of national competence,
with concrete goals agreed on and reviewed on a
yearly basis by Heads of State or Government.
» “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), but does not draw any
conclusions.
» 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.
» The Monti Clause
Art. 1 § 3 Reg. 1176/2011 - The application of this
Regulation shall fully observe Article 152 TFEU, and the
recommendations issued under this Regulation shall
respect national practices and institutions for wage
formation. This Regulation takes into account Article
28 of the Charter of Fundamental Rights of the
European Union, and accordingly does not affect the
right to negotiate, conclude or enforce collective
agreements or to take collective action in accordance
with national law and practices.
» 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.
Correction mechanisms should ensure automatic action to be undertaken
in case of deviation from the MTO or the adjustment path towards it, with
escape clauses for exceptional circumstances.
These 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 noncompliance with the SGP, the Commission can require a revised draft budgetary
plan (in 2013, 5 MS has been recalled: Spain, Italy, Luxembourg, Malta,
Finland).
[According to the analysis based on the Commission Autumn 2013 Forecast,
there is a risk that the Italian Draft Budgetary Plan will not allow reducing the
debt-to-GDP ratio in line with the debt reduction benchmark in 2014.]
» Member States in the Excessive Deficit Procedure must
submit regular progress reports on how they are
correcting their deficits.
» The Commission can request more information or
recommend further action from those at risk of missing
their deficit deadlines.
» Euro area Member States with excessive deficits must
also submit Economic Partnership Programmes, which
contain plans for detailed fiscal-structural reforms (for
example, on pension systems or public healthcare) that
will correct their deficits in a lasting way.
The 2012 Fiscal Sustainability Report analyses the sustainability
of public finances in the Member States, against the background
of the impact of the financial, economic and fiscal crisis and the
demographic ageing projected in the 2012 Ageing Report.
For further information:
http://ec.europa.eu/economy_finance/economic_governance/i
ndex_en.htm
TOWARDS A GENUINE ECONOMIC AND MONETARY UNION Van Rompuy (President of the European Council) in close
collaboration with: Barroso (President of the European
Commission); Juncker (President of the Eurogroup); Draghi
(President of the European Central Bank):
http://www.consilium.europa.eu/uedocs/cms_data/docs/press
data/en/ec/134069.pdf
November
The Annual Growth Survey (AGS) sets out overall economic
priorities for the EU for the following year.
The Alert Mechanism Report (AMR) screens Member States for
economic imbalances.
The Commission publishes its opinions on draft budget plans and
Economic Partnership Programmes (for euro area countries with
excessive budget deficits). The budget plans are also discussed by
euro area finance ministers.
December
Euro area Member States adopt final annual budgets, taking into
account the Commission's advice and finance ministers' opinions.
February/March
The European Parliament and relevant EU ministers (for employment,
economics and finance, and competitiveness) meeting in the Council discuss the
AGS.
The Commission publishes its winter economic forecast.
The European Council adopts economic priorities for the EU, based on the AGS.
The Commission publishes in-depth reviews of Member States with potential
imbalances (those identified in the AMR).
April
Member States submit their Stability/Convergence Programmes and their
National Reform Programmes , which should be in line with all previous EU
recommendations.
Eurostat publishes verified debt and deficit data from the previous year, which is
important to check if Member States are meeting their fiscal targets.
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.
In May, the Commission also publishes its spring economic forecast.
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.
» It starts the European Semester
» The Annual Growth Survey (AGS), together with the
Joint Employment Report and the Integrated
Guidelines, provides the basis for guidance by the
European Council to Member States on the
comprehensive strategies to be set out in National
Reform Programmes (NRPs) and Stability and
Convergence Programmes (SCPs).
» In 2014, 5 priorities has been established :
I - Pursuing differentiated, growth-friendly fiscal consolidation
II - Restoring bank lending to the economy
85% of German SMEs that applied for credit in the second half of 2012 received
the full amount but the average for southern European countries was just over
40% and only 25% for Greece.
Close monitoring of private debt levels and associated financial risks, such as
real estate bubbles, and the impact of corporate and personal insolvency
regimes, where necessary. This also includes schemes creating a tax bias
towards debt financing.
III - Promoting growth and competitiveness for today and tomorrow
IV - Tackling unemployment and the social consequences of the crisis
Further reform efforts to ensure that wage developments should be in line
with productivity and thus support both competitiveness and aggregate
demand, to remedy labour market segmentation, notably by modernising
employment protection legislation.
V - Modernising public administration
In 2013, for the first time, the JER includes a scoreboard of key
employment and social indicators (see also Commission's
Communication on strengthening the social dimension of the Economic
and Monetary Union, COM(2013)690).
The results of the scoreboard will be further analysed by the
Commission in the preparation of Country-Specific Recommendations.
The scoreboard contains five headline indicators:
• unemployment
• youth unemployment and the rate of those not in education,
employment or training (NEET rate)
• household disposable income
• the at-risk-of-poverty rate
• income inequalities
North and core of EA: AT, BE, DE, FI, FR, LU, NL; South and periphery
of EA: EE, EL, ES, IE, IT, CY, MT, PT, SI, SK; Non EA – North: CZ, DK, PL,
SE, UK; Non EA - South and periphery: BG, HR, LV, LT, HU, RO.
» «Many indicators are already utilised in the
employment and social fields, but are
powerless against the priority given to
economic issues within the governance
framework. What is needed is for these social
indicators to be placed on an equal footing with
the economic ones, in order to have a real
impact on economic policies.”
The EP deplores the fact that Parliament has been
completely marginalised and regrets the fact that the
economic adjustment programme measures in Greece
(May 2010 and March 2012), Ireland (December 2010),
Portugal (May 2011) and Cyprus (June 2013) were designed
without any assessment of the consequences by means of
impact studies or coordination with the Employment
Committee, the Social Protection Committee, the
Employment, Social Policy, Health and Consumer Affairs
Council (EPSCO) or the Commissioner for Employment and
Social Affairs; the consultative bodies established by Treaty,
in particular the European Economic and Social Committee
(EESC) and the Committee of the Regions (CoR), were not
consulted.
» Les indicateurs servent « à concevoir et définir
les orientations de toute politique publique »
» « légitimité par les résultats »: « Si les
résultats, quantifiés, font apparaître que les
objectifs sont atteints, l’action démontre son
efficacité ».
» Ce gouvernement par le nombre opère « une
redistribution des savoirs et des pouvoirs »
» 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.
The Macroeconomic Institute of the Hans Boeckler
Foundation (IMK) has recently held a conference
during which EU Commissioner for Employment,
Social Affairs and Inclusion, Laszlo Andor, delivered a
keynote speech on how to address social imbalances
in Europe and by doing so restarting the process of
convergence.
http://www.social-europe.eu/2014/02/addresssocial-imbalances-europe/
http://ec.europa.eu/social/main.jsp?langId=en&catId
=89&newsId=2023&furtherNews=yes
Further information:
http://ec.europa.eu/social/main.jsp?catId=1044&langId=en&moreDo
cuments=yes
European Economic and Social Committee, Step up for a Stronger
Europe. 30 Proposals for stepping-up Europe 2020:
http://www.eesc.europa.eu/resources/docs/step-up-for-astrongereurope---30-conclusions---eesc.pdf
Caritas Europa Report, The Impact of European Crisis:
http://www.caritas-europa.org/code/EN/inte.asp?Page=1505
EuroMemoGroup, L’Europa alternativa:
http://www.sbilanciamoci.org/2013/03/euromemorandum-ci-salveraleuropa/