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The study

Assessment of the first European Semester and its contribution to the achievement of the EU2020 Strategy Stakeholders & press presentation EP, Brussels 19 October 2011. The study. Carried out in summer 2011 Research team Olivier DERRUINE (staff Ph. LAMBERTS MEP) Anne TIEDEMANN

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The study

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  1. Assessment of the first European Semester and its contribution to the achievement of the EU2020 StrategyStakeholders & press presentationEP, Brussels19 October 2011

  2. The study • Carried out in summer 2011 • Research team • Olivier DERRUINE (staff Ph. LAMBERTS MEP) • Anne TIEDEMANN • Base material • Commission annual growth survey • Country recommendations as proposed by the Commission • Country recommendations as adopted by the Council • EU 2020 strategy

  3. AGS says : EU2020 targets will not be met • 75% employment rate : will be missed by 2.2–2.6% • 3% of GDP on R&D : will be missed by 0.2-0.3% • 20-20-20 targets • 20% improvement in energy efficiency will be missed • Education targets • 10% drop-out rate will be missed by 0.5% (but several MS have no plans) • 40% in tertiary education will be missed by 2.7% (best case) • Poverty reduction target : several MS have no plans

  4. EU 2020 performance chart

  5. Lesson 1 : a (too) intricate governance scheme • Too many benchmarks on different levels • Different instruments, different status • SGP criteria : binding, sanctionable, treaty-based • Broad economic policy guidelines, employment guidelines : binding, treaty based • AGS : non-binding, solo-play by the Commission • Euro+ pact : non-binding, solo-play by the Council • Overlap, lack of consistency in contents • see next table

  6. Lesson 2 : EU 2020 no longer in focus • « Consolidation » of public finances is top (and only serious) priority • Although AGS itself says in annex that “fiscal consolidation is an essential pre-requisite for growth, it is [however] not sufficient to drive growth.” • While EU 2020 should be overarching strategy, it hardly features in the AGS • Education, climate/energy targets only slightly referred to • R&D, poverty reduction targets absent altogether • 7 EU 2020 flagships are totally left out

  7. Lesson 3 : Lack of consistency • No direct link between country recommendations and performance gaps • Regarding the employment target, top performers (SE, NL and CY, except DK) and laggards or less ambitious countries (EE, IE, SL) are equally treated : they all receive a recommendation as if they all face the same challenge ! • Regarding CO2 emissions, one recommendation for BU but none for HU, the worst performer • Appropriate data not available in due time • Few country recommendations do take all three dimensions (smart, sustainable, inclusive) of EU 2020 • When they are all present, they differ widely in definition and scope • For instance, some recommendations (5 MS) address « growth-enhancing expenditure » but the scope differ (R&D&I for NL, care for DE, structural funds for IT) and the content is not always specified (BU, SK)…

  8. Lesson 4 : Council impact on recommendations • In general, Council tends to water down the tone of recommendations • In some cases, original recommendations are substantially modified • Example : strong recommendations to NL on addressing transport congestion issue – simply erased by the Council • One noteworthy amendment by the Council in the BU recommendation is to consult stakeholders on pension reforms (but why only in the BU case?)

  9. Lesson 5 : Approach to imbalances… unbalanced! • AGS states it will address both deficit and surplus countries, however no recommendations for the latter • Focus on wages in country-specific recommendations • Six-pack confirmed the balanced approach (surplus/deficit ; also COM declaration) and that wages will not be addressed. So what is next?

  10. Lesson 6 : No distinction between EMU/non-EMU MS’ • Despite Article 136 (« one of the major achievement of the IGC ») , the recommendations do not specifically take into account if Member States adhere to the EMU or not. • The new roadmap to Stability and Growth (October 12) announced two legislative pieces based on Art.136 to strengthen discipline in the MS. • It means a contrario that all the potential of the distinction EMU/non-EMU has not been tapped.

  11. Lesson 7 : An increasing democratic gap • AGS & Euro+ pact de facto supersede integrated policy guidelines • Some parliamentary consultation for the guidelines • NO parliamentary involvement at all for AGS & Euro+ pact • Involvement of national, regional parliaments in NRPs and SCPs at best superficial, at worst non-existent Involvement of social partners non-existent • By the way, the 1st EU Semester pre-empted some provisions of the 6-pack that was not even in force at the time (the Directive on requirement for budgetary frameworks (to monitor infra-national public finances) (AU, CY, DE, IT, SL...) or the new preventive arm of SGP (enforceable ceilings on expenditure » for IT...)

  12. Recommendations • Streamline the process • EU 2020 as the multi-annual policy framework (should embed any Euro+ type commitments); to be made (as) legally binding (as possible) • AGS (pls find new name) as the annual EU-wide policy guidelines (superseding BEPG & EG) • BOTH to be subject to co-decision in order to enable legitimacy • Increase consistency of EU semester with EU 2020 • Each concerned DG should be involved upfront • Should the drive remain with DG EcFin (hence strong bias towards basic budgetary discipline vs. More encompassing approach?)

  13. Recommendations (continued) • Increase consistency between recommendations and performance gaps • Policy-area approach vs. Country-based approach? • Increase the democratic legitimacy of the process • Co-decision on binding EU 2020 and AGS • Consultation of social partners for both • Based on six-pack, enforce effective involvement of MS parliaments in tabling of NRPs & SCPs

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