Opinion of the European Economic and Social Committee on "Economic governance in the EU"
Date: 2002-12-12
Institutions: European Economic and Social Committee
Subjects: European Union, coordination of EMU policies, economic policy, governance

8.4.2003

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3.6.
The communication quite rightly stresses that the
principle of proportionality must apply to the detention of
persons awaiting expulsion. As a matter of principle, the
detention of such persons should not be used to coerce or
exert pressure on them (e.g. with a view to obtaining identity
papers).

3.7.
The EESC has already expressed its views on these
matters in its opinion on the green paper. It should be noted
that detention pending expulsion should not exceed 30 days.

To avoid serious problems for the persons concerned,
3.8.
it is crucial that the EU establish, on a temporary basis, a list

Brussels, 11 December 2002.

of countries to which people may not be deported on account
of
freedom, war or
humanitarian crisis.

the risk to their lives,

the lack of

3.9.
The Commission concludes its communication by
asking the Council to endorse the Return Action Programme
by the end of the year, in accordance with the mandate given
by the Seville European Council. The EESC would like the
Council and the Commission to reflect on the contradiction
and lack of balance between the delay in common legislation
for legal immigration and the adoption of such harsh measures
against illegal immigration as expulsion and obligatory repatri-
ation.

The President

of the European Economic and Social Committee

Roger BRIESCH

Opinion of the European Economic and Social Committee on ‘Economic governance in the EU’

(2003/C 85/16)

On 18 July 2002 the European Economic and Social Committee, acting under Rule 23(3) of its Rules of
Procedure, decided to draw up an opinion on ‘Economic governance in the EU’.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was
responsible for preparing the Committee’s work on the subject, adopted its opinion on 26 November
2002. The rapporteur was initially Ms Konitzer, followed by Ms Florio.

At its 395th plenary session (meeting of 12 December 2002), the Economic and Social Committee
adopted the following opinion by 69 vote to 13, with 16 abstentions.

1. Preliminary remarks

1.1.
The Single European Act (1986) and the Treaties of
Maastricht (1992) and Amsterdam (1997) have considerably
expanded EC/EU activities. That said, the European Union
remains suigeneris, without a government responsible for state
action in the classical sense. Drawing on the treaties and
a range of different agreements between the Community
institutions and the Member States, and with the involvement
of various bodies, organisations and also enterprises, a form of
governance has emerged that is specific to the Community.

‘At European level,

1.2.
the [European Economic and
Social] Committee is the institutional forum for consulting,
representing, informing and expressing the views of organised
civil society, thereby allowing the representatives of Member
States’ economic, social and civic organisations to be an
integral part of the policy-forming and decision-making pro-
cess at Community level. (1)’ The Committee is therefore, quite
involved in the debate about how to improve
naturally,
governance in the European Union, both in the context of the
constitutional Convention and with a view to the future

(1) Resolution addressed to the European Convention.

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intergovernmental conference and Community enlargement
(cf. the EESC resolution addressed to the European Convention
— CES 1069/2002).

Economic governance in the Community — which
1.3.
should not be confused with economic government — is
also an issue on which the European Economic and Social
Committee considers it necessary to set out its own views. The
success of economic governance in the Community is vital
to achieving the Union’s objectives. The Committee is a
Community body with particular expertise in economic and
social issues, which, given its membership, can also act as an
intermediary among the various interest groups. As such, it
considers it appropriate to issue the present opinion and thus
to provide some input into the difficult question of how
economic governance in the Community can be improved.

1.4.
This opinion takes up the option that the Committee
gave itself in its resolution of 19 September 2002, namely to
flesh out the overall thinking on economic policy formulated
therein. The main points are as follows:

1.4.1.
Economic policy should be coordinated in such a
way as to make the most of the Union’s potential for growth
and employment.

1.4.2.
The Commission’s right of proposal and mandatory
EESC consultation in the procedure for drawing up the
economic policy guidelines should be reinstated.

1.4.3.
Full employment should be mentioned explicitly in
the constitutional Treaty as one of the objectives of the Union
and this Treaty should state more clearly that economic and
monetary policy must contribute to the attainment of the
objective of growth and full employment.

2. Origins of the debate

2.1.
The debate on how to organise economic governance
in the context of European integration is as old as the 1957
Treaties of Rome. The Treaty establishing the European
Economic Community (EEC) provides for common policies in
areas such as customs, external trade, transport, agriculture
and competition, but regards overall economic policy merely
as ‘a matter of common concern’. Member States coordinate
their economic policy within the Council (Article 145) on a
proposal (Art. 103) or recommendation (Art. 105) from the
Commission.

2.2.
It was not long before these few Treaty provisions were
supplemented by informal agreements, European Council
conclusions and Council of Ministers resolutions, and by
secondary legislation — i.e. regulations, decisions and direc-
tives of the Council of Ministers based either on the existing
Treaty, or in some cases (1) involving an amendment to the
Treaty itself (Article 236, EEC Treaty).

2.2.1.
Under the Treaty, secondary legislation was enacted
on a proposal (in some cases also on a recommendation) from
the Commission, usually after obtaining the opinion of the
European Parliament (or, under Article 252 [ex. 189c] of the
EC Treaty, with the Parliament’s active involvement). In many
cases, the European Economic and Social Committee (EESC)
was also consulted.

2.2.2.
Landmark developments in the field of economic
governance in the EU include the following Council decisions
providing for or setting up advisory committees:

— 18.3.1958: Statutes of the Monetary Committee (2);

— 9.3.1960: Short-term Economic Policy Committee (3);

— 15.4.1964: Medium-term Economic

Policy Com-

mittee (4);

— 8.5.1964: Budgetary Policy Committee (5).

1.4.4.
The Union must adopt the instruments necessary
to implement the Lisbon strategy. This also includes the
coordinated use of macroeconomic and structural policy and
comprehensive dialogue among the macroeconomic policy
players.

2.3.1.
A major new boost came in the wake of the 1969
Franco-German exchange rate changes, with the emergence of
the plan to establish a European economic and monetary union
(Brandt, Pompidou, the Hague European Council
(EEMU)

2.3. The Werner plan

1.4.5.
The constitutional Treaty should contain a reference
to the provision of services of general interest. It should also
provide an improved legal basis for coordination arrangements
and the involvement of the social partners and other relevant
civil society players. Decision-making processes at Union
level must reflect the principles of solidarity, transparency,
coherence, subsidiarity, proportionality and openness.

(1) In particular the 1986 Single Act establishing the single market
and the 1993 Maastricht Treaty launching European economic
and monetary union.
(2) OJ 17, 6.10.1958, p. 390.
(3) OJ 31, 9.5.1960, p. 764.
(4) OJ 64, 22.4.1964, p. 1031.
(5) OJ 77, 21.5.1964, p. 1205.

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conclusions of 1 and 2 December 1969). On 8 and 9 July
1970, the Council endorsed the findings of the Werner report
on the establishment of a European economic and monetary
union. Among other things, it was noted that economic and
monetary union means that the most important economic
policy decisions are taken at Community level, that, conse-
quently, the requisite powers are transferred from the national
level to the Community, and that to complete EMU, a single
currency might be introduced, thereby making the process
irrevocable.

2.4.2.
The frequent EMS exchange rate realignments
throughout the 1980s highlighted the differences that con-
tinued to exist in monetary and economic policy. However,
these realignments also triggered closer coordination of Mem-
ber States’ approaches to economic policy and precipitated a
deeper understanding of the need for a common, formalised
monetary policy. Another critical step forward came with the
1987 Single European Act, which laid the foundations for the
single market and also, for the first time, enshrined the goal of
EEMU in the Treaty.

2.3.2.
This approach, as set out in the Werner plan, led to
a strengthening of economic policy coordination mechanisms:

— establishment of an Economic Policy Committee through
the merger of the Short-term Economic Policy Com-
mittee, the Medium-term Economic Policy Committee
and the Budgetary Policy Committee (Council decision
74/122/EEC, 18.2.1974);

— Council Directive of 18 February 1974 on stability,
growth and full employment in the Community (74/121/
EEC);

— Council convergence decision of 18 February 1974 (74/

120/EEC).

As part of this framework, the Council, acting by a
2.3.3.
qualified majority on a proposal from the Commission and
having consulted the European Parliament and the European
Economic and Social Committee, adopted medium- and
short-term economic policy guidelines. Quantitative (and
confidential)
‘guidelines’ were also laid down for Member
States’ national budgets.

The success of this relatively strict coordination
2.3.4.
mechanism was, however, seriously undermined by the inter-
national and intra-Community currency upheavals of the
1970s, that had been triggered by the collapse of the Bretton
Woods monetary system and the first oil shock. The situation
was compounded by a lack of progress in monetary policy
cooperation and very disparate approaches to economic policy
in various Member States. Ultimately, as a result of all these
factors, the first attempt to establish an EEMU was not a
success. This failure was followed by a long period of high
inflation,
inadequate growth and increasing underemploy-
ment.

2.5. The Maastricht Treaty

After the experiences, setbacks and advances outlined
2.5.1.
above,
the political events of 1988/1990 (including the
prospect of German unification) made it possible to again
address the plan to establish a genuine European monetary
union with a centralised monetary policy, a European central
bank and a single currency. The key stages in this process were
the Hanover (June 1988) and Strasbourg (December 1989)
European Councils (Helmut Kohl, François Mitterrand), the
Delors committee report (June 1989) and finally the Maastricht
Treaty which was signed on 7 February 1992.

2.5.2.
The Maastricht Treaty, which entered into force on
1 November 1993, and the political will in most EU Member
States to join European monetary union, facilitated progress in
nominal convergence (the Maastricht criteria) — not least in
the area of price stability. As a result, monetary union
initially among eleven
was completed on 1 January 1999,
countries, and the euro entered into circulation — by that time
in twelve countries — on 1 January 2002. When framing the
Maastricht Treaty, however, the relatively strict coordination
mechanisms adopted under the Werner plan (cf. for example
the Council decisions of 18 February 1974) were dropped.
That said, Articles 101 to 104 of the consolidated Treaty do
relate to budgetary policy, and, together with the stability and
growth pact (secondary legislation), are designed to ensure
that national budgetary policies do not compromise the
stability-oriented monetary policy (Article 105) within the
monetary union. However, these provisions do not, as yet,
indicate how (sound) budgetary policy can and/or should be
used as a tool of overall economic policy.

2.4.

The European monetary system

It was not until the establishment of the European
2.4.1.
monetary system (EMS) — pursuant to the Bremen European
Council conclusions of 6 and 7 July 1978 (Helmut Schmidt,
Valéry Giscard d’Estaing),
the Brussels
European Council of 5 December 1978 and the agreement
between Member States’ central banks of 13 March 1979 —
that, relatively informally, progress began to be made in
monetary policy cooperation within in the Community.

the resolution of

2.5.3.
In the context of general economic development, the
overall economic policy coordination mechanisms under the
Maastricht Treaty fall considerably short of earlier procedures.
In spite of monetary union and in contrast to the Werner
plan and the Council conclusions of 8 and 9 July 1970,
responsibility for overall economic policy basically remains at
national level. Representation of matters of common concern
is extremely weak, and the Commission has no right to make
proposals in either framing or monitoring implementation of

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the broad economic policy guidelines (Article 99). Although
provision is made for majority Council decision-making, the
European Parliament is merely informed of Council decisions.
In contrast
to the convergence decision of 18 February
1974 (74/120/EEC), there is no provision for consulting the
European Economic and Social Committee. Nor are the social
partners officially consulted in the drawing-up of the broad
economic policy guidelines (see also point 2.1 The philosophy
behind the Maastricht Treaty from the EESC opinion on the
Coordination of economic policies in the long term [pages 3-
4] (1)).

2.5.4. While, under the Werner plan, the single currency
was to some extent conceived as the crowning achievement of
economic and monetary union, the current set-up involves a
customs union, a single market and a monetary union. Yet
the overall economic policy coordination mechanisms are
markedly less strict than they were during the first and
projected second phase of the Werner plan.

3.

Future economic governance in the EU: why must it
be improved and how can this be done?

3.1.
Thanks to European monetary union, the 2001/2002
economic slowdown and the international crises of the past
two years (including the impact of 11 September 2001) did
not result in currency upheavals and fundamentally divergent
approaches to economic policy in Europe as had been the case
in the 1970s, 1980s and early 1990s. That is a major success.

3.2.
That said, the past few years have seen further and
considerably more forceful calls for enhanced economic policy
coordination.

Point 7 of the Barcelona European Council conclusions also
notes this need for (1) better Eurozone statistics, (2) enhanced
analysis of the macroeconomic policy mix (monetary policy,
budgetary policies, wage trends) and (3)
improved coordi-
nation mechanisms. The European Economic and Social
Committee has already set out its views on these matters (see
point 1.4 of its opinion on the Coordination of economic
policies in the long term (1) and called for the timely submission
of comprehensive Commission proposals.

The need to improve economic governance in the EU

3.3.
and the EEMU is abundantly clear from the following points:

The success in achieving price stability and monetary
3.3.1.
union contrasts with the Community’s chronically inadequate
record on growth and employment.

3.3.2.
The Maastricht Treaty’s relative reticence on the
subject of economic policy has been subsequently mitigated in
various, not always transparent ways. These involve not
only the inclusion of an employment title in the Treaty
(Articles 125-130) but also, for instance, the various more or
less formal and transparent ‘processes’ that have been launched
(Luxembourg, Cardiff and Cologne). They also include an
opaque mix of consultations and arrangements for non-
mandatory opinions, a beefed-up role for the committees at
the expense of the Commission’s role as the body representing
the Community interest, and the establishment at Council level
of an informal ‘Eurogroup’ to address the development of the
policy mix and the coordination of economic policy in the
EEMU, yet without any decision-making powers under the
Treaty (see point 2.2 of the EESC opinion on the Coordination
of economic policies in the long term (1). All these initiatives
clearly demonstrate the need for transparent, coherent, efficient
and Treaty-mandated rules.

In particular, it is becoming ever more apparent that
3.3.3.
the currency union, which involves a centralised European
monetary policy, both necessitates and facilitates a new
macroeconomic approach (cf. also point 7 of the Barcelona
European Council conclusions). A central feature of this is the
policy mix of monetary and budgetary policy and wage trends,
while respecting the autonomy of the players involved and at
the same time taking account of the Community interest. This
is vital for growth and employment prospects (importance of
macroeconomic dialogue).

3.3.4.
Economic policy need not be overly centralised to
ensure that, in its other areas as well, due account is taken of
it may be worthwhile
the Community interest. However,
reconsidering the appropriate division of powers in the field
of economic policy between the various levels in the Member
States (local authorities, regions, constituent states and central
or federal government) and the representation of the Com-
munity interest. [This is a difficult technical
issue. With a
view to the Convention and,
later, the intergovernmental
conference, a high-level group of experts — along the lines of
the 1970 Werner group and the 1988/89 Delors group —
should therefore in the very near future be tasked to draw up
specific proposals.]

Economic governance is a field in which the Euro-
3.3.5.
pean Community also needs to be equipped to meet the
challenges of the 21st century. Points to note in this regard
include the following:

a) Over the next ten to fifteen years, improved economic
governance should make a substantial contribution to
securing a return to full employment (cf. the Lisbon
objectives) and thus to placing the maintenance and
development of the European social model, including the
key components of social services of general interest, on

( 1) OJ C 221, 17.9.2002, p. 67.

(2) OJ C 221, 17.9.2002, p. 67.

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a sound economic footing. To do that, it is necessary to
make more effective and more transparent arrangements
for the harmonised application of macroeconomic policy
and macroeconomic structural policies, and for more in-
depth dialogue among macroeconomic policy players.
That is the only way to achieve the Lisbon objectives.

b) A return to full employment under these conditions and,
of course, in line with sustainable development would
not only mean the creation of some 30-35 million new
jobs over the next ten to fifteen years — a figure almost
equalling the present number of people in work in
Germany. It would also increase the Community’s annual
gross domestic product — over and above productivity
growth — by an amount almost equivalent to German
GDP — and around twice the GDP currently generated
by the candidate countries for accession (excluding
Turkey). This might also be termed internal Community
enlargement. Such a development is also necessary to
enable the EU countries to deal more effectively with the
demographic problems that will present themselves later
in the 21st century.

c)

In the course of the upcoming enlargement, it is vital that
the Community remain capable of effective economic
policy action. In addition, however, enlargement should
also be accompanied by a deepening both of the single
market and of economic policy. Moreover, geographical
enlargement will further boost the Community’s GDP
and its future potential for employment and growth (see
the example of Ireland). However, it is vital to bear in
mind the risks involved in enlargement, to maintain the
Community’s economic and social cohesion during the
transition period and to ensure that the monetary union
also remains capable of effective economic policy action.
It must be remembered that, probably for some time after
enlargement,
the Community will have considerably
more members than the monetary union.

d) Achieving these goals will further significantly strengthen
the Community’s economic and political clout on the
world stage. To fully realise its potential in this regard,
the Community must be able to speak to the outside
world with one voice — including (but not only) on
economic affairs.

e)

The Committee considers that the discussion on econ-
omic governance must lead to a new model base on
coordinated economic and social development; in par-
ticular it must take account of the diverse and different
needs and situations of businesses and incorporate the
principles advanced in the European Charter for Small
Enterprises.

3.4. A positive outlook

3.4.1.
The points outlined above opens up a perspective
within which the Community can achieve its goals of freedom
and peace, prosperity and social balance — both sustainably
and through the voluntary, joint exercise of sovereignty. The
Community’s economic, social and also political model could
thus become a paradigm for a world in which it is possible to
draw on the benefits of an international division of labour
without the social downside, and in which any present or
future threats of hegemony can be transformed into peaceful
partnerships.

3.4.2.
This prospect — a European dream — does not
mean that specific regional and national characteristics and
responsibilities have to be sacrificed on the altar of EU
supremacy. The balanced solution is the full, two-way appli-
cation of the subsidiarity principle to European governance,
and thus also to economic governance in the EU. In other
words, powers best exercised at lower levels should remain
there. By the same token, those powers that can best (or
perhaps even can only) be exercised at a higher level ought,
therefore, to be assigned there. This means, however, that the
higher level concerned must be equipped with the requisite
democratic legitimacy. The issues involved here present major
challenges both for the European Convention and the sub-
sequent intergovernmental conference.

3.5.
The assignment of powers to the various levels and
players involved in economic governance should also be
reflected in transparent consultation and coordination pro-
cedures. These include, for instance, mutual information so as
to learn from best practice, the mandatory consultation of the
groups and institutions concerned (e.g. the European Economic
and Social Committee), the open coordination method, organ-
ised dialogue among autonomous players (chaired by the party
representing the Community interest, e.g. macroeconomic
dialogue) and the transparent application of the Community
method (Commission proposal, majority Council decision-
making with the involvement of the European Parliament).
They also extend to clearly centralised decision-making (e.g.
monetary policy).

4. Specific proposals

4.1.
A number of more or less specific and wide-ranging
proposals have been put forward for improving economic
governance in the EU, not least the following Commission
proposals:

— Communication from the Commission of 7 February
2001 on strengthening economic policy coordination
within the euro area (1), dealing with the situation in the
run-up to changes to the Treaty;

(1) COM(2001) 82 final.

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— Commission Communication — A project for the EU
— (1), setting out some key proposals for Treaty amend-
ments.

On 19 July 2002, the Commission also set up a group of
experts on economic governance in an enlarged EU. Other
proposals come from the consultative committees, the Euro-
pean Central Bank, the Ecofin Council and the European
Parliament
(draft of 27 June 2002, provisional: 2002/
2062(INI)).

4.2.
The European Economic and Social Committee has
also issued a number of relevant opinions, setting out initial
proposals (notably its opinion on the Contribution of the
European Economic and Social Committee in respect of the
broad economic policy guidelines for the Member States and
the Community for 2002 (2) of 20 March 2002 and the
opinion on the Coordination of economic policies in the long
term (3) of 29 May 2002).

The Committee’s proposals in the present opinion (4)

4.3.
are based on the following considerations:

— Some improvements may even be made without
amending the Treaty, but there has to be transparency
and genuine democratic legitimacy.

— However,

in a number of cases, a Treaty amendment

seems unavoidable.

— The Council (and the Parliament) — acting on a proposal
from the Commission and having obtained the opinion
of the European Economic and Social Committee (and
also the Parliament in the absence of the co-decision
procedure) — should make greater use of secondary
legislation. The Treaty basis for this must be expanded
(e.g. Article 99(5)).

The Committee would make the following proposals

4.4.
in the run-up to any changes to the Treaty:

4.4.1.
The Commission should not only submit a survey of
the existing formal and informal procedures, ‘processes’ and
consultations involved in the formulation and coordination of
economic policy at Community level (5), but should also
conduct a critical analysis with a view to simplification and
greater efficiency.

The Commission Communication of 7 February
4.4.2.
2001 on strengthening economic policy coordination within

( 1) COM(2002) 247 final.
( 2) OJ C 125, 27.5.2002, p. 56.
( 3) OJ C 221, 17.9.2002, p. 67.
( 4) The following list of proposals is derived from point 4 of the
EESC opinion of 29 May 2002 on the Coordination of economic
policies in the long term.

( 5) Cf. number 45 in the Euro Papers series: Coordination of
economic policies in the EU: a presentation of key features of the
main procedures.

the euro area contains ideas for improving coordination
without amending the Treaty. These ideas should again be
addressed and re-examined in the light of possible Convention
proceedings and a likely Treaty revision. The proposals are
designed to improve eurozone economic policy coordination,
including, for instance, taking better account of the policy mix
of monetary and budgetary policy and wage trends in the
eurozone, drawing up a range of rules for economic policy so
as to boost the credibility and predictability of the economic
strategy in the eurozone, enhancing dialogue among those
responsible for economic policy, and providing the Com-
mission and the other Member States with prior information
about national economic policy measures that may have an
impact on the eurozone.

4.4.3. With a view to the Convention proceedings and
above all the future intergovernmental conference, serious
consideration should be given to the idea of establishing a
high-level group of experts on economic governance in the EU
along the lines of the 1970 Werner group and the 1989 Delors
group. Indeed, without the expert counsel and authority of the
Werner group, and especially the Delors group, the EEMU
would not have been set up. That said, no optimum solution
has yet been found for the organisation of economic govern-
ance within the EU and especially within the EEMU, or for an
appropriate division of powers between the various levels in
the Member States (local authorities, regions, constituent states
and central or federal government) and the representation of
the Community interest. The Convention and the subsequent
intergovernmental conference could only benefit from highly
expert and authoritative advice on this thorny issue that is
nonetheless of key importance for the Community interest.

4.4.4.
Efforts should be stepped up to promote a broad and
informed public debate, including on ongoing Community
economic policy issues. To a certain extent, this can be
achieved through mandatory opinions of the European Econ-
omic and Social Committee and the social partners on the key
Community economic policy documents. The Commission
should be required to comment publicly on these opinions.
Moreover in its opinion on the Coordination of economic
policies in the long term (6) the European Economic and Social
Committee proposed setting up an independent, European
expert body to assess the Community’s economic development
and policy, which would perform a consultative role, stimulat-
ing analysis and public discussion through constructive criti-
cism and proposals. The aim of this proposal is not the
continual establishment of new bodies. Rather, it is intended
to help prevent the various Community institutions setting up

(6) OJ C 221, 17.9.2002, point 4(ii).

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competing councils of experts. The important thing is to
promote informed and independent public discussion of
economic policy issues in the Community and the monetary
union. Such a council of experts could be established via
secondary legislation once the legal basis under Article 99(5)
has been amended accordingly.

As regards Treaty amendments (1),

4.5.
would make the following proposals:

the Committee

4.5.1.
The aim of full employment should be mentioned
explicitly in Article 2. It should also be stated more clearly that
economic policy must make a substantial contribution to
achieving the objective of employment and growth (Articles 3,
4 and 98). Social services of general interest should also be
included in the list of objectives set out in Article 2, with
appropriate adjustments to Articles 3, 4 and 16. Articles 2, 3,
4 and 16 of the consolidated version of the Treaty establishing
the European Community could then be amended as follows:

Article 4

no change except that the term ‘open market economy’

1)
should be replaced by ‘open and social market economy’.

2)
... the introduction of a single currency, the euro, and
the definition and conduct of a single monetary policy and
exchange-rate policy the primary objective of both of which
shall be to maintain price stability and, without prejudice to
this objective, to support the general economic policies in the
Community, with a view to contributing to the achievement
of the objectives of the Community as laid down in Article 2
(same wording as in Article 105), in accordance with the
principle of an open and social market economy with free
competition.

3)
... a sustainable balance of payments, so that the growth
and employment objectives referred to in Article 2 can be
pursued sustainably and on a sound basis.

Article 2

Article 16

The Community shall have as its task, by ..., to promote
throughout
the Community a harmonious, balanced and
sustainable development of economic activities, the attainment
of a high employment rate commensurate with the goal of full
employment, taking account of appropriate job quality and
the dignity of work, a high level of social protection and of
social services of general interest, equality between men and
women ... among Member States.

Article 3

1)
For the purposes set out in Article 2, the activities of the
Community shall include, as provided in this Treaty and in
accordance with the timetable set out therein:

In the following points listed from a) to u), a new point, h)(i)
should be inserted as follows:

‘h)(i)

the development of Community guidelines for
general economic policies and,
in the stability-
oriented framework of the monetary union, with-
out prejudice to the provisions of Articles 101 to
105 and respecting the autonomy of the various
players concerned,
in particular the promotion
of an improved policy mix of monetary policy,
budgetary policies and wage trends in order to
better safeguard the Community interest and con-
tribute to the achievement of the objectives in the
fields of growth, competitiveness and employment
set out in Article 2;’

This article is not very clear. If it is to remain unchanged, the
following could be added at the end: ... enable them to fulfil
their missions. This shall also broadly apply to public and
private bodies and undertakings serving general social interests.

4.5.2.
symmetrically: Article 5 could be worded as follows:

The subsidiarity principle should be framed more

Article 5

The Community shall act within the limits of the powers
conferred upon it by this Treaty and of the objectives assigned
to it therein. The principle shall thereby apply that powers best
exercised at local, regional or national level should also remain
at these levels. Powers that can be exercised more effectively,
or exclusively, at Community level should be transferred to
that
level, with due regard for the rules of democratic
legitimacy and control.

In areas which... (this section remains unchanged).

4.5.3.
On tax policy issues, the Committee would refer to
its most recent opinions on Tax policy in the European Union
— priorities for the years ahead (2) and Direct company
taxation (3). On the question of unanimity, the procedure for
strengthening co-operation as defined in the Treaty of Nice
could be used, which would enable a group of Member
States to move forward as pathfinders in accordance with
Community rules. With regard to Article 93, the introduction
of a time limit could also be considered to resolve the
unanimity issue.

( 1) Amendments relate to the consolidated version of the Treaty
establishing the European Community, OJ C 340, 10.11.1997,
pp. 173-308.

(2) OJ C 48, 21.2.2002, p. 73, (ECO/072).
(3) OJ C 241, 7.10.2002, p. 75.

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Article 93

Amending this article raises fundamental issues. Consideration
should be given to the possibility of adding the following
sentence:... within the time-limit laid down in Article 14.
Where no unanimous decision is reached despite the fact that
the Commission and the Parliament, acting by a majority,
have established the existence of a serious impairment to
competition or to the functioning of the internal market, or
harmful tax competition, the Council, acting in accordance
with the procedure referred to in Article 251 and after
consulting the Economic and Social Committee, may, three
years after the existence of such a situation has been estab-
lished, adopt such measures as may be necessary.

f)

g)

In cases of inconsistency with the broad economic policy
guidelines, the Commission should be able to issue an
early warning and the Council to publish a formal
recommendation;
if need be, scope should also be
provided to update the broad economic policy guidelines.

Secondary legislation in the field of economic policy
coordination should have an appropriate legal basis so
that it can be used, among other things, to address new
economic policy developments and to make detailed
provisions for the coordination procedures, in a trans-
parent way, and without the need each time either to
amend the Treaty or to establish informal and opaque
procedures and ‘processes’.

4.5.4.
pursues an economic policy. It might be worded as follows:

Article 98 should recognise that the Community also

Taking account of these considerations, Article 99 should be
amended as follows:

Article 98

Article 99

Member States and the Community shall conduct their econ-
omic policies with a view to contributing to the achievement
of the objectives of the Community, as defined in Article 2,
and in the context of the broad guidelines referred to in
Article 99(2). The Member States and the Community shall act
in accordance with the principle of an open and social market
economy with free competition...

4.5.5.
account of the following points:

Article 99 should be extensively reworded, taking

a)

b)

c)

The Commission should explicitly represent the Com-
munity interest in economic policy coordination; on
matters of economic policy, it should also conduct the
external representation both of the Community and of
the monetary union.

The role of the European Parliament and the European
Economic and Social Committee should be explicitly
defined.

The procedure for drawing up the broad economic policy
guidelines should be established along similar lines to
that used for the employment guidelines (Article 128)
including the Commission’s right to make proposals.

d) Mention should be made of the role of the Statistical
Office of
the European Communities in monitoring
implementation of the broad economic policy guidelines,
and of the various coordination procedures.

e)

A Euro-Ecofin Council should be formally set up for a
transitional period; explicit mention should be made of
the importance of the policy mix of budgetary policy,
wage trends and monetary policy for achieving the
referred to in
growth and employment objectives
Article 2, and macroeconomic dialogue should be formal-
ised.

99(1) Member States shall regard their economic policies
as a matter of common concern. Economic policies shall be
coordinated in the Council, with the Commission representing
the economic policy interests of the Community as a whole
and of the monetary union (cf. Article 213). On matters of
economic policy, the Commission shall conduct the external
representation of the Community as a whole and of the
monetary union. The Parliament, where the Treaty does not
provide for the procedure referred to in Article 252, and the
Economic and Social Committee shall be consulted on all key
matters of economic policy.

99(2)
The European Council shall each year consider the
economic situation and the orientation of economic policy in
the Community and adopt conclusions thereon, on the basis
of an annual economic report by the Commission and taking
account of the opinion of the Council. (same procedure as in
Article 128)

In its annual economic report, the Commission shall also give
an opinion on the annual report of the independent European
council of experts which shall be set up pursuant
to
Article 99(5) to assess macroeconomic development in the
Community.

99(2)(i)
On the basis of the conclusions of the European
Council, the Council shall, on a proposal from the Commission
and having consulted the Parliament and the Economic and
Social Committee, adopt a recommendation setting out the
broad guidelines of the economic policies of the Community
and of the Member States. This recommendation shall cover
all the key areas of economic policy at least every three years.
The Council shall inform the Parliament of its recommen-
dation.

First paragraph unchanged, except for the final clause:
99(3)
... and, on a proposal from the Commission, carry out an
overall assessment at least once a year.

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Second paragraph: add the following sentence at the end: The
Statistical Office of the European Communities shall compile
the statistics required for this surveillance. Detailed provisions
for this shall be adopted pursuant to Article 99(5).

The Commission shall represent
the Community interest
within this dialogue. The social partners may, if they wish,
submit to this dialogue joint statements of position: in that
case, the Commission shall support this dialogue between the
social partners pursuant to Article 138(1).

99(3a)
In line with the coordination requirements in the
individual sectors of economic policy and the need in each
case to take account of the Community interest, various
coordination procedures may be adopted pursuant
to
Article 99(5), bearing in mind the need for transparency.

The macroeconomic dialogue shall be chaired at a technical
level by the appropriate Commission departments and, at a
political level, by the president of the Council.

For as long as not all the Member States of the
99(3b)
Community take part in the monetary union, the economic
policy issues relating to the monetary union shall be addressed
in a special Council configuration (Euro-Ecofin) in which the
Member States of the monetary union are represented. On the
basis of reports from the Commission and the ECB, which
shall also take account of external economic developments,
the Euro-Ecofin shall discuss on a regular basis and without
prejudice to the provisions of Articles 101 to 105, respecting
the autonomy of the various players concerned and taking
account of the principles set out in Article 4(3), how the policy
mix of monetary policy, budgetary policies and wage trends
can be improved with a view to achieving the objectives in the
fields of growth, competitiveness and employment set out in
Article 2. Any recommendations and other decisions shall be
adopted by the Euro-Ecofin Council acting by a qualified
majority of its members on a proposal from the Commission.
The Parliament and the Economic and Social Committee
shall be consulted on fundamental issues. Detailed working
provisions for the Euro-Ecofin Council shall be adopted
pursuant to Article 99(5).

99(3c)
A macroeconomic dialogue shall be conducted at
least twice a year between the Council, the Commission, the
ECB and the European social partners (cf. Articles 138 and
139). One representative each from the Parliament and the
in these
Economic and Social Committee shall take part
meetings as observers. On the basis of reports from the
Commission and, if appropriate, the ECB, this dialogue shall
address the economic situation, the economic outlook and the
economic policy issues affecting the Community interest as a
whole;without prejudice to the provisions of Articles 101 to
105, respecting the autonomy of the various players concerned
and taking account of the principles set out in Article 4(3), this
shall also include improving the policy mix of monetary
policy, budgetary policies and wage trends with a view to
achieving the objectives in the fields of growth, competi-
tiveness and employment set out in Article 2.

Further details shall be adopted pursuant to Article 99(5).

99(4)
New first paragraph: Where the Commission estab-
lishes that there is a risk of inconsistencies between a Member
State’s economic policies and the broad guidelines referred to
in Article 99(2) or that these policies risk jeopardising the
proper functioning of economic and monetary union, the
Commission shall issue an early warning to the Member State
concerned and to the Council. Where it is established, under
the procedure referred to in the first paragraph of Article 99(3),
that this risk has become a reality or is highly likely to become
a reality, the Council, acting by a qualified majority on a
proposal from the Commission, shall make the necessary
recommendations to the Member State concerned. These
recommendations shall be public.

99(4)
New second paragraph: Where it is established, under
the procedure referred to in the first paragraph of Article 99(3),
that certain general parts of the broad guidelines referred to in
Article 99(2) must be reformulated because of overall and/or
international economic developments, the Council, acting by
a qualified majority on a proposal from the Commission, shall
adapt the recommendation as required. This recommendation
shall be public.

The former second paragraph becomes the new third
99(4)
paragraph and remains unchanged, except for the deletion of
the final phrase:... if the Council has made its recommendations
public.

99(5)
New wording: Acting on a proposal from the Com-
mission the Council shall, in accordance with the procedure
referred to in Article 252, adopt detailed rules for the
coordination procedures referred to in the present Article 99.

This dialogue shall not result in any binding ex-ante coordi-
nation of budgetary, wage and monetary policy, but the
individual players and groups of players in the field of
macroeconomic policy shall, with complete respect for their
autonomy, exchange information about their assessment of
the situation and their intended actions.

4.5.6.
There should be a thorough revision of Treaty
Article 114 under which the former Monetary Committee is
replaced by the Economic and Financial Committee which is
then accorded a status comparable to that of a committee of
Permanent Representatives of the Member States (Article 207)
in the field of economic policy. This article does not, however,
regulate relations with the Economic Policy Committee

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(Council decision 74/122/EEC, 18.2.1974) and the Employ-
ment Committee (Article 130). In order to ensure the requisite
transparency [and thus prevent the emergence of an opaque,
uncontrolled focus of power], the Treaty should limit itself

here to providing a simple framework and, for the detailed
provisions, should refer to secondary legislation which, as in
Article 99(5), could be adopted under the procedure referred
to in Article 252.

Brussels, 12 December 2002.

The President

of the European Economic and Social Committee

Roger BRIESCH

Opinion of the European Economic and Social Committee on:

— the ‘Proposal for a Regulation of the European Parliament and of the Council amending
Regulation (EEC) No 1210/90 as regards the budgetary and financial rules applicable to the
European Environment Agency and the European Environment Information and Obser-
vation Network and access to the Agency’s documents’,

— the ‘Proposal for a Regulation of the European Parliament and of the Council amending
Regulation (EC) No 178/2002 as regards the budgetary and financial rules applicable to the
European Food Safety Agency and access to the Agency’s documents’,

— the ‘Proposal for a Regulation of the European Parliament and of the Council amending
Regulation (EC) No 1592/2002 of the European Parliament and of the Council concerning
common rules in the field of civil aviation and creation of a European Aviation Safety
Agency’, and

— the ‘Proposal for a Regulation of the European Parliament and of the Council amending
Regulation (EC) No 1406/2002 of the European Parliament and of the Council setting up a
European Maritime Safety Agency’

(COM(2002) 406 final — 2002/0169 (COD) — 2002/0179 (COD) — 2002/0181 (COD) — 2002/
0182 (COD))

(2003/C 85/17)

On 23 September 2002 the Council decided to consult the Economic and Social Committee, under
Article 157 of the Treaty establishing the European Community, on the above-mentioned proposals.

At its 395th plenary session of 11 and 12 December 2002 (meeting of 11 December), the European
Economic and Social Committee appointed Mr Chagas as rapporteur-general and adopted the following
opinion by 54 votes for with one abstention.

1.
The new Financial Regulation applicable to the general
budget of the EC (1) will enter into force on 1 January 2003. It
presents a new approach concerning the budgetary and
financial status of the decentralised Community agencies.

2.
The entry into force of this regulation requires amend-
ments to the legal acts establishing the agencies, which include:

— the European Environment Agency (Copenhagen) (2);

( 1) Council Regulation (EC, Euratom) No 1605/2002 of 25 June
2002 on the Financial Regulation applicable to the general budget
of the European Communities (OJ L 248, 16.9.2002, p. 1) —
EESC opinion: OJ C 260, 17.9.2001, p. 42).

(2) Council Regulation (EEC) No 1210/90 of 7 May 1990 on the
establishment of the European Environment Agency and the
European Environment Information and Observation Network
(OJ L 120, 11.5.1990, p. 1) — EESC opinion: OJ C 56, 7.3.1990,
p. 20.