In the name of the markets : Is the revision of Europe's - PowerPoint PPT Presentation

In the name of the markets : Is the revision of Europe's « constitutional setting » a source of legitimacy ? Cécile Barbier Senior Researcher, Observatoire social européen (OSE) The impact of financial, Economic and Euro Crisis on the “Social Dimension” of the European Union, International workshop, European University Viadriana, Frankfurt Institute For Transformation Studies Berlin, 29 November – 1 st December 2012

Plan 1) The « social dimension » of the Lisbon Treaty 2) Europe 2020 3) Two new international tools 4) The increasing role of the European Central Bank

1)The "social" dimension of the Lisbon Treaty Reminder: in 2004, the support to the Constitutional Treaty by both the European Parliament and the social actors was a "yes but... ". 1 December 2009: implementation of the Lisbon Treaty. It contains some progress in the social field: Article 9 TFEU contains a horizontal social clause, Article 14 TFEU on services of general economic interest contains a new legal basis. After the rejection of the Constitutional Treaty, it added a protocol on services of general interest (SGI) at the request of the Netherlands. Maintaining the status legally binding Charter of fundamental rights even if the treaty is silent on the procedure for the revision (3 countries outside the scope of the Charter); Social Governance: inclusion of OMC procedures in 4 articles, but without naming them. As before, the employment guidelines must comply with the broad economic policy guidelines that can be "enhanced" between member states of the Euro area. Recognition of the role of social partners and the citizens' initiative.

Possible progress toward a more Social Europe on the basis of EU treaties ? Using the procedure of Article 153 TFEU (bridging clause, but question of political feasibility in a context dominated by the better regulation and social measures of austerity plans already imposed), enhanced cooperation in the field of taxation (corporate tax, green taxes ...), and social clause (a mention in the guidelines for employment in October 2010) but what impact in the face of strengthening the Stability and Growth Pact? With regards to SGI, the implementation of the treaty is highly speculative and/or risky. The question of general interest tasks assigned to social housing in the Netherlands is raised (action against the European Commission, Case T-202-10, introduced in April 2010).

2) Europe 2020 Strategy • European Commission (3 March 2010): Europe 2020 presented as « a vision of Europe’s social market economy ». of Europe's social market economy for the 21st century • Fiscal stabilisation requires "significant structural reforms, particularly in the areas of pensions, health care and welfare systems, and education. • After application of the Treaty of Lisbon, reforms continue to cover areas beyond the border of Community competences. • On how to do (governance), in "an effort to improve consistency", reports and assessments of Europe 2020 and the Pact of Stability and Growth Pact (SGP) will be conducted simultaneously (while remaining separate instruments) This will allow these two strategies to pursue similar goals of reform while retaining their own identity. "

Strengthening economic governance • Following implementation of the Treaty of Lisbon, two points stand out: Institutional inventiveness: Declaration of the Heads of States of member states in the Euro area (March 25, 2010) deciding on the establishment of a Task Force on Governance. The task force issued its report prior to the European Council of 28 and 29 October. • Institutional creativity: introduction of a « reverse majority » rule to impose sanctions for non-compliance with the rules of the revised Stability Pact. In fact, a « blocking qualified majority » should be held to interrupt the proceedings leading to sanctions, which amounts to give the mechanism a quasi-automatic nature. • Report of the Task Force: The importance of the logic of "ownership" by MS in the field of fiscal policies (national budgets must reflect the recommendations of the Commission or the Council during the "European Semester").

Governance of the euro area • Besides the « blocking qualified majority », the Commission proposals presented on September 29 focus on monitoring and sanctions. • According to the October 2011 European Council, the reform of European governance should be completed by June 2011. • Differentiation in the mechanism leading to the sanctions for the Member States of the Eurozone (and addition of a new procedure for macroeconomic imbalances leading to sanctions for eurozone MS) • Adoption of the « Six Pack » under the ordinary legislative procedure (former codecision) which involves the implication of the European Parliament but with no visibility. • Growing political role of the European Central Bank which is now an EU institution. • May 2010 : ECB President « From the monetary federation to the fiscal federation ». The « reverse majority rule » was strongly supported by the ECB. • The majority of the EP followed the request of the ECB president to extend the « reverse majority » rule as far as possible.

A limited revision of the Treaty on the Functioning of the Union • Following the European Council in October 2010, the European Council President was assigned to study how to modify the TFEU by incorporating « a permanent mechanism for crisis management to maintain financial stability in the euro area as a whole ». • Aim: To ensure sustainability of the instrument of financial support (European Financial Stability Facility (EFSF until 2013, established 7th June, 2010 following the Ecofin Council decision of 9 May). • In order to revise the treaty, the simplified revision procedure was used. It required a unanimous decision by the European Council and all national ratifications. This must be completed in 2013 to succeed the EFSF. What about the ownership of such a decision? Is this revision valid (Pringle Case, C 370/12) ?

Meanwhile, a profound questioning of the "European social model" is in fact a reality Market pressures: the introduction of reforms in several countries considered "courageous" by the European institutions (wage freeze or cuts in public service, flexible labor laws, lower pensions, abolition of jobs in public service, deferral of the retirement age ...). When several national components of the "European social model" are crumbling, or worse dismantling, the model itself is eroded and reduced. With the « new governance » there is no alternative (TINA) to austerity. It consists of an Economic model which translates the highly criticised « consensus of Washington ». New vision of the Washington/Frankfurt /Brussels Consensus since it is not possible to devaluate the national currency, « structural reforms » are the only way to produce an internal devaluation. The « master of the game » is the President. All of this to regain competitiveness, a consensus goal not being put into question since the Single European Act and the Maastricht Treaty (See White Paper of the European Commission on growth, competitiveness and employment of of 1993 and Krugman's criticism).

3)Two new intergovernmental tools 1) The treaty establishing the European Stability Mechanism (EMS): after the version signed by the Financial Ministers of the eurozone on 11 July 2011. The revised version was signed on 2 February by the Permanent Representatives of the eurozone. Institutionalisation of the method of the « memorandum of understanding » listing the strict conditionality to obtain the financial assistance. This is not a « solidarity » treaty as it is often wrongly quoted. 2) The treaty on stability, convergence and governance (TSCG) : the eurozone MS but signed by Heads of State and Governments of 25 MS (without UK and the Czech Republic). Aim: Introduction of a fiscal « Golden rule » (also initially in the « Two Pack », the second strengthening of the Stability Pact proposed in November 2011 by the EC). Legalisation of « reverse majority » rule ? Statement by the President Herman Van Rompuy at the signing ceremony, "its effects will be deep and long-lasting“.