EN Official Journal of the European Union C 113/1

Resolution of the Committee of the Regions, to the Spring European Council 2012, on ‘the Draft Treaty on stability, coordination and governance in the economic and monetary union’ (1)

2012/C 113/01

Submitted by the EPP, PES, ALDE and EA political groups

Following the European Council conclusions of 30 January 2012, the Committee of the Regions is conscious of the direct implications for regional and local authorities in the European Union of the prospective Treaty on stability, coordination and governance in the economic and monetary union (hereafter "the new treaty").

THE COMMITTEE OF THE REGIONS

I. On the Treaty on stability, coordination and governance in the economic and monetary union

1. is fully committed to playing its part in addressing the challenges of the ongoing crisis and supports the efforts to develop better coordination and governance of economic and monetary union to tackle the recession and the sovereign debt crisis, by guaranteeing sound and sustainable public finances;

2. stresses that stricter budget discipline and a clear reduction of debt levels must be complemented by rapid measures for growth and territorial cohesion, stimulating job creation and sustainable employment in order to create the conditions to re-launch the European economy and safeguard the future of the European integration project;

3. regrets that a new Treaty has been drafted outside the existing framework of primary EU law and with only minimal involvement of the European Parliament, in a process dominated by inter-governmental negotiation and on issues which to a large extent had already been addressed via EU legislation according to the normal democratic procedures of the Union;

4. remains committed to the "Community method" as the most legitimate way to build the European Union as a common political space;

5. recalls the urgent need for the EU to regain the trust of its citizens and to restore economic growth while enhancing social, economic and territorial cohesion;

6. requires a clear reference in the new treaty to the respect of the subsidiarity and proportionality principles and requests the recognition of the legal competences of regional and local authorities in the issues of economic governance;

7. stresses that the proposals of the "golden rule" on the balance of public accounts proposed by the Contracting Parties concern not only public finances that are under the responsibility of central governments but will also have an impact on public budgets of regional and local authorities;

8. supports deeper economic integration and more synergies between regional, local, national and EU budgets in line with legal competences of regional and local authorities for financial autonomy;

9. is in favour of an independent and objective European rating agency, aiming to make rating agencies more efficient, accountable and reliable for the analysis they provide on public finances, including on debt obligations of European regional and local authorities; this would also balance the current domination of the few existing rating agencies and create a greater transparency over the rating evaluations;

10. calls on the Commission to take into consideration the state of regional and local public finances in its annual monitoring exercise of national public finances in the European Union and the Annual Growth Survey, on which the CoR can express its views;

Legal nature of the new treaty and the negotiating process:

11. urges the Contracting Parties to ensure the coherence and primacy of European law and to integrate the new treaty's substance into the EU Treaties at the latest five years after it enters into force;

12. considers that the new intergovernmental treaty must not include any sanction mechanism which would be directly linked to budget allocations for EU policies such as cohesion policy; recalls its opposition to any form of macroeconomic conditionality that would punish regional and local authorities for the economic and budgetary decisions taken by national governments;

13. regrets that it was not possible to consult the Court of Justice on whether the international agreement envisaged is compatible with the EU Treaties, and the respect of subsidiarity principle;

14. stresses that many of the measures proposed by the new treaty are already contained in, or could have been adopted as a complement to, the so-called "Six Pack" of measures to reinforce the stability and growth pact;

15. requests that, following the entry into force of the new treaty, a Convention will be convened, with the aim of incorporating the substance of the new treaty into the legal framework of the European Union; thus deems it of crucial importance to involve the CoR as the assembly of regional and local authorities to this future Treaty change in line with to the "ordinary procedure";

Recommendations of local and regional authorities referring to the content of the new treaty:

16. welcomes the goal of developing an "ever closer coordination of economic policies", and strongly reiterates the pivotal role of regional and local authorities in the European economy (2); therefore urges the Contracting Parties to: a) include a reference in the new treaty recognising the legal competences of regional and local authorities for substantial areas of public finances and economic governance, in line with the subsidiarity principle as provided for under the EU Treaties; b) ensure that "debt issuance plans", the "economic partnership programmes" and the "Europlus pact commitments" will all be drawn up within Member States in close partnership with regional and local authorities through sound multilevel governance arrangements (3), c) consult regional and local authorities prior to each Euro summit meeting, if appropriate; d) involve the CoR in the future conferences as mentioned in the new treaty between the European Parliament and national parliaments on issues of economic governance; and stress that national parliaments should consult their relevant regional parliaments and, where appropriate, involve them in the process; e) extend the provision regarding the respect of national parliaments' responsibilities to regional parliaments with legislative powers; f) ensure that regional and local authorities are given the possibility to contribute to the exchange of best practices on major economic policy reforms, with provision made for a system of benchmarking progress; g) note that the legal obligation to transpose into domestic law the requirement for central governments' budgets to be balanced or in surplus ("balanced budget rule") has serious budgetary implications for regional and local authorities; h) be aware that the implementation of such a rule without the establishment of parallel multilevel governance and partnership arrangements risks triggering a new process of centralisation at national level through a reinforced "top down" budgetary coordination within Member States.

II. Towards growth-friendly consolidation and job-friendly growth

17. highlights that 94.5 % of the EU budget is essentially devoted to investment at national, regional and local level and stresses the need for deeper fiscal and economic integration and on the synergies between regional, local, national and EU budgets;

18. stresses the strong added value of cohesion policy, not least its leverage effect for investments in growth and jobs in regions that are catching up, and points out that the current priorities of the Structural Funds do not require a reorientation, but an enhanced procedure for speedier and more efficient commitment and payment of the funds, including reinforced capacity building on the part of the beneficiaries;

19. demands that any decision on the reallocation of uncommitted Structural Funds is adapted to the specific socio-economic situation of each region, with the respect of subsidiarity and proportionality principles. In this context, the priorities must be defined by all relevant partners including Local and Regional Authorities;

20. calls on the European Commission and central governments to ensure that, in case of re-allocation of funds from cohesion policy, regional and local authorities are fully involved in the design and implementation of new policy actions for the creation of jobs and growth and in order to avoid a renationalisation of policies;

Stimulating employment, especially for young people:

21. welcomes the assistance of the European Commission to the Member States on how best to use the uncommitted resources of the Structural Funds and intends to pro-actively contribute to this initiative with policy recommendations and best practices developed at regional and local level in the fields of employment, education, training, and with expertise on optimal use of Structural Funds;

22. requests that all additional measures for the national job plans be adopted in partnership with regional and local authorities; endorses the idea put forward by the Commission that a "Youth Guarantee" which ensures that all young people are either in a job, in training or in education within four months of leaving school should be at the core of every national jobs plan; proposes enhanced promotion of young entrepreneurship as a possible career path for young people;

23. highlights the potential added value of the Progress programme for employment and social solidarity, provided that the programme is well communicated, easily accessible to beneficiaries and geared towards sustainable long term structural measures;

Completing the single market and boosting the financing of the economy, in particular SMEs:

24. welcomes the European Council's commitment to deliver on the Commission's proposals on the Single Market as soon as possible, in particular the modernisation of EU public procurement legislative framework in line with the Europe 2020 goals;

25. reiterates the pivotal role of SMEs in the regional and local economy; urges the development of additional measures to support an SME-friendly environment in Europe, especially as regard the access of SMEs to venture capital;

26. calls for the creation of Small Business Act Partnerships to further implement the Small Business Act (SBA) at regional level; highlights the importance of the European Entrepreneurial Region award scheme launched by the CoR in 2010 as a network of regions developing tailored regional strategies to boost entrepreneurship and to tap into the innovative potential of business;

27. urges the Commission to ensure that all legislation is first subject to comprehensive territorial impact analyses;

28. welcomes the Commission's proposal for a pilot for Europe 2020 Project Bond Initiative to be used for the implementation of Europe 2020 strategy.

III. Contribution to the Spring European Council: time to overcome the "partnership gap" to deliver Europe 2020 Strategy

29. welcomes the European Parliament's recognition that the quality of EU, national, regional and local public administration is a determining element of competitiveness and productivity, as is the effective provision of services of general interest;

30. insists that the Europe 2020 Strategy should be given a full territorial dimension and regrets that the Annual Growth Survey drafted by the European Commission seldom mentions the need to involve the local and regional authorities in the implementation of the National Reform Programmes;

31. stresses that the CoR's monitoring reports on the Europe 2020 shows a "partnership gap" in Europe 2020 implementation and laments the failure, in the majority of Member States, to ensure the timely, adequate and effective involvement of regions and cities in the preparation of National Reform Programmes;

32. draws attention to its proposal that Territorial Pacts be adopted in every Member State in order to guarantee multilevel governance and the partnership-based implementation of National Reform Programmes through an agreement between all public authorities legally competent;

33. calls on the Commission to swiftly propose the European Code of Conduct for the partnership principle of cohesion policy which should improve the effectiveness and governance of Europe 2020 strategy;

34. will address the 2012 country-specific recommendations drafted by the European Commission, and the 2013 Annual Growth Survey, in order to scrutinise the level of participation of regional and local authorities; asks the Council to adopt country-specific recommendations on the governance part of the strategy;

35. asks its president to send this resolution to the EU institutions and the Member States.

Brussels, 16 February 2012. The President of the Committee of the Regions Mercedes BRESSO

(1) The resolution represents a contribution of the CoR to the Spring European Council 2012 and takes into account the Draft Treaty on stability, coordination and governance in the economic and monetary union and the Statement of the members of the European Council of 30 January 2012

(2) Cf. RLAs 2/3rd share in the amount of total public investments in the EU.

(3) This could be a legal obligation inspired by the prospective European Code of conduct on the implementation of the partnership principle under regional policy.