EUU, Alm.del - 2011-12 - Bilag 264: Invitation til Interparlamentarisk møde om det europæiske semester

Europaudvalget 2011-12, Beskæftigelsesudvalget 2011-12, Socialudvalget 2011-12, Finansudvalget 2011-12
EUU Alm.del Bilag 264, BEU Alm.del Bilag 88, SOU Alm.del Bilag 178, FIU Alm.del Bilag 108
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EUROPEAN PARLIAMENT

COMMITTEE ON ECONOMIC AND MONETARY AFFAIRS

COMMITTE ON BUDGETS

COMMITTE ON EMPLOYMENT AND SOCIAL AFFAIRS

Interparliamentary Committee Meeting

on the European Semester for Economic Policy Coordination

Brussels

Meetings

- Monday, 27 February 2012 - 15:15 - 16:50 Hemicycle

- Monday, 27 February 2012 - 17:00 - 18:45 Committee rooms

- Tuesday, 28 February 2012 - 09:00 - 12:30 Hemicycle

AN ORIENTATION TO THE DEBATE

This meeting will be the second interparliamentary committee debate in the European

Parliament on the European Semester. It will focus on the economic priorities of the

European Semester for 2012 on the one hand, and on the role of the national Parliaments

(NPs) and the European Parliament (EP) in the Semester, on the other. This

interparliamentary meeting is organised just in advance of the spring European Council at a

time when reshaping economic governance within the European Union, in particular the Euro

area, is of major importance.

The interparliamentary committee debate will begin with an opening plenary session on 27

February, concentrating on the ways of

coordinating national policies within the European

Semester.

After this plenary session, two parallel sessions will follow and participants will be able to

choose in advance whether they would like to join the discussion on

"Fiscal discipline and

sustainability of public finances"

or the one entitled

"Beyond budgetary discipline: How

to achieve sustainable growth in adverse economic circumstances".

On 28 February, a plenary session will give the opportunity to the representatives of national

Parliaments to have a

debate with the European Parliament's representatives in the

negotiations on the international agreement on a reinforced union

and to wrap up the

conclusions of the debate.

The following background information and documentation is aimed as a guidance and

orientation to the debate. In all sessions high-level speakers will address the floor in the

beginning. Subsequently, the role of rapporteurs from the European or national Parliaments

in the sessions will be to briefly give their views (max. 5 min per intervention) on the subject

in order to stimulate a debate before the general discussion among all members in the room.

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EUU, Alm.del - 2011-12 - Bilag 264: Invitation til Interparlamentarisk møde om det europæiske semester

Brief presentation of the European Semester for Economic Policy Coordination

The European Semester, as a new governance structure, was first proposed by the European

Commission in its Communication of 12 May 2010 and was approved by the Council on 7

September 2010. It is a new institutional process of economic governance that has mainly

two objectives: first, to verify the application of budgetary discipline of Member States;

second, to regularly oversee the good delivery of the Europe 2020 programme by securing

the financial means necessary for its implementation.

The cycle of macroeconomic and structural coordination starts in January with the

presentation by the Commission of the Annual Growth Survey (AGS), which sets out a

number of priorities for the EU and identifies objectives for their fulfilment. The AGS is

then discussed in the Council and the EP. In turn, the Spring European Council endorses

the priorities for fiscal consolidation and structural reform along the lines of the AGS and

explicitly invites EU Member States to take account of these priorities in the drafting of

their budgetary and structural reform plans. The Commission must then set country-specific

recommendations on the basis of these documents and the Council must adopt them not

later than July.

In this new instrument for economic governance, both national Parliaments and the

European Parliament can play a significant role in their capacity of key actors in the

adoption and scrutiny of national budgets and the EU budget.

Throughout the cycle of the European Semester the European Parliament organises

hearings in the form of an economic dialogue involving the main stakeholders.

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II.

Outline of the sessions

1. Fiscal discipline and sustainability of public finances

In the current juncture, with the sovereign debt crisis taking a toll on economic recovery in

Europe, growth-friendly fiscal consolidation allowing public finances to be brought on a

sustainable path is a prerequisite for restoring confidence, particularly in Member States

under financial stress. Fiscal discipline is enshrined in the Stability and Growth Pact (SGP),

which is one of the pillars of the EMU. The SGP was strengthened in autumn last year with

the adoption of the package on economic governance. Within the European Semester, fiscal

coordination based on the rules provided by the SGP is sought.

Moreover, in the current context of economic and financial difficulty and scarcity of financial

resources, there is a strong need for both growth-friendly fiscal consolidation, which is a

prerequisite for restoring confidence in Member States under financial stress, but also

coordination between European and national policy objectives in many areas. Such

coordination can lead to greater synergy between European and national level spending,

while respecting and strengthening subsidiarity, additionality, European added value and

advantages of economies of scale. Even though the EU budget is co-decided by the European

Parliament and the Council according to the Treaties and national budgetary procedures are

governed by the constitutional system of each Member State, a stronger budgetary

coordination does not violate the subsidiarity principle and would contribute to a more

streamlined expenditure for the achievement of Europe 2020 goals. The framework of the

European Semester could provide a good opportunity to develop greater synergy between EU

and Member States budgets.

This session will give participants the opportunity to discuss fiscal coordination within the

framework of the European Semester together with the rules provided by the SGP. In

addition, the session will explore ways to improve budgetary synergy between national and

European levels with the aim of strengthening budgetary discipline and ensuring that the

targets of "Europe 2020" are met. Some possible questions for discussion could look at the

guidelines provided by the European Commission in terms of fiscal policy orientation and

their implementation at the national level. The session could also consider ways to improve

the connection of budgetary procedures in the Member States and those at EU level

(alignment of categories of expenditure, creation of an aggregate analysis of European public

finance). Finally it could discuss the possibility of including an overview of financial

commitments and the efforts to realise the EU objectives and strategies in national budgets

and achieve better budgetary coordination at national and European levels.

2 Beyond budgetary discipline: How to achieve sustainable growth, job creation

and social progress in adverse economic circumstances

The EU aims to raise the employment rate for men and women to 75 % and to reduce the

number of people at risk of poverty by 20 million by 2020. Yet, after a decade of economic

and employment growth, the crisis has moved Europe away from its path. Employment has

decreased, whilst unemployment has substantially increased, and is still rising. The number

of people at risk of poverty and social exclusion is also persistently growing. Those hit

mostly by unemployment and economic inactivity risk losing their skills, leaving the labour

market and facing poverty and social exclusion. Over the past three years, youth

unemployment has risen from 15% to 21%.

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These developments require a determined and coordinated action. The European Union has

to give a convincing response to the crisis since social cohesion and the European social

model are at stake. However, fiscal consolidation though necessary is not sufficient to deliver

growth, jobs and social progress. Coordinated efforts should go beyond fiscal discipline and

should include structural reforms in a balanced manner, taking due account of their social

impact. The EU needs to improve its growth potential and the overall efficiency of the

economy, both in the short- and longer-term perspectives. Job creation and restored

confidence are necessary for a strong and sustainable recovery, the sustainability of our social

models and the stability of public finances. The key challenge is therefore to make long-term

investment in sustainable growth, jobs and social progress and short-term fiscal consolidation

mutually supportive at both the EU level and in the Member States.

In order to tackle unemployment and the social consequences of the crisis, the European

Commission proposed in the Annual Growth Survey 2012 that Member States give priority

to mobilising labour for growth, to supporting employment especially for young people and

to protecting the vulnerable.

An exchange of views in this session would give participants the opportunity to discuss the

possibilities and ways for increasing investment in sustainable growth, job creation, social

inclusion and social progress in adverse economic circumstances. In this framework,

participants could address, among others, the difficult situation of young people who are

facing extraordinary proportions of unemployment, especially in some countries, the risk of

long-term unemployment which poses significant risks of both loosing the human capital and

social exclusion, and the negative impact of the crisis on vulnerable groups, for example

children and workers with low wages. Participants could also exchange views on the ways

national Parliaments and the European Parliament can contribute to reinforcing the efforts of

Member States with regard to the achievement of the agreed Europe 2020 targets in the

employment, poverty reduction and education areas, as well as to ensuring that commitments

made by Member States in their National Reform Programmes are implemented.

3. The international agreement on a reinforced economic Union

The main outcome of the European summit held on 8-9 December 2011 was an agreement on

stricter budgetary discipline. This has taken the form of a Treaty among the 17 Eurozone

countries, which is also open to others.

In conformity with the new "fiscal compact" which underpins the agreement, sanctions would

apply automatically to countries exceeding the 3% deficit ceiling unless blocked by a

qualified majority – or three-quarters of the Eurozone Member States. Moreover, according

to the agreement, the annual structural deficit should "not exceed 0.5% of nominal GDP".

Countries also committed to enshrine a "golden rule" to run budgets which are balanced or in

surplus into their national Constitutions. The new procedure will also oblige the Euro area

countries to submit their draft budgetary plans to the European Commission before they are

adopted by their national Parliaments, although the Commission will not have the power to

annul them.

The parties to the agreement also took a long-term commitment to work towards deeper fiscal

integration, with more detailed plans to be presented by the European Council President

Herman Van Rompuy during the March 2012 summit.

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EUU, Alm.del - 2011-12 - Bilag 264: Invitation til Interparlamentarisk møde om det europæiske semester

The 26 EU leaders also sought to launch a process of deepening economic integration among

the Eurozone countries. According to the summit statement, this new process "will rest on an

enhanced governance to foster fiscal discipline and deeper integration in the internal market

as well as stronger growth, enhanced competitiveness and social cohesion." So long as the

crisis continues, summits will be held every month to reduce disparities between the Member

States on issues such as pension reform, labour and taxation policy. In a letter sent to EU

leaders before the summit, France and Germany stated that policies under the Eurozone's

economic pillar would encompass proposals such as the coordination of labour market

policies as well as financial regulation. Heads of State who signed up to the new "fiscal

compact" acknowledged that a majority would be difficult to find on such topics and agreed

to "make more active use" of the enhanced cooperation mechanism, which allows smaller

groups of countries within the European Union to move ahead on areas of common interest.

This plenary meeting would give the participants the opportunity to exchange views with the

European Parliament's negotiating team regarding the new rules proposed under the

international agreement. This discussion takes place at a crucial moment, as the international

agreement is expected to be finalised for the March European Council.

III.

Relevant background documents

1. REPORT on the European Semester for Economic Policy Coordination

(2011/2071(INI))

2. WORKING DOCUMENT on financing the 2020 Agenda despite the budgetary crisis,

Alain Lamassoure 2010

3. Policy Department D Study "Creating greater synergies between the EU and national

budgets"

4. EU BUDGET AND NATIONAL BUDGETS, 1999-2009 (Statistics on growth)

5. Policy Department A Study "How effective and legitimate is the European

Semester?"

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