Communication from the Commission to the Council - Establishment of an OECD EDRC examination of EC economic policies alongside to the Euro Area Survey
Date: 2005-04-21
Institutions: European Commission
Subjects: EU Member State, OECD, administrative check, economic policy, euro area

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 21.04.2005 
COM(2005) 150 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL 

Establishment of an OECD EDRC examination of EC economic policies alongside to the 
Euro Area Survey  

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The issue 

In  this  Communication,  the  Commission  proposes  elements  for  the  reply  to  be  given  to  the 
request  of  the  Ambassadors  of  Australia,  Canada,  Japan,  Korea,  Mexico,  Japan  and  the  US 
(APEC)  to  the  OECD  to  widen  OECD  EDRC  Examinations  of  the  Euro  Area  to  include 
Community  policies  that  have  an  impact  on  the  EU’s  economic  performance.  The 
Commission  proposes  to  give  a  positive  reply  to  the  APEC  letter  in  the  sense  that  the  EC 
could  accept  the  establishment  of  a  distinct  “EU  25  Review”1,  alongside  the  Euro  Area 
Survey,  and  subject  to  the  condition  that  it  is  done  in  a  manner  that  would  take  duly  into 
account the particularities of the EC, and serve our systemic interests. 

The EC and the OECD EDRC review 

The examination of the OECD Members’ economy by the OECD’s Economic Development 
and Review Committee (EDRC) is the cornerstone of the OECD’s system of peer review and 
economic surveillance.  

The  main  objectives  of  EDRC  reviews  are  1)  to  assess  how  authorities  may  improve 
economic  performance  and  2)  to  encourage  the  participating  economies  to  strengthen  their 
policies with a view to enhance economic efficiency and promote growth. The review leads to 
formal  recommendations  which  are  not  binding  upon  Members,  but  constitute  useful  policy 
guidance and whose implementation can be followed up in subsequent reviews. Each OECD 
Member is reviewed with intervals ranging from 12 to 18 months (for the Euro Area : every 
12 months). 

For  the  time  being,  there  is  no  genuine  EDRC  review  for  Community  policies.  Since  2001, 
the EDRC carries out a yearly self standing review of the Euro Area, because of the particular 
characteristics of the euro area economy. It focuses in particular on monetary and exchange 
rate policies, with other macroeconomic and structural policies being dealt with in so far as 
they have an impact on economic developments in the Euro Area as a whole (e.g. competition 
and environmental policy in 2003). All EC MS which are Member of the OECD are currently 
subject to individual EDRC examinations, in the context of which Community wide policies 
are often being addressed (due to their impact on that individual MS), though in a fragmented 
and  repetitive  manner.  Those  reviews  rarely  allow  an  identified  representative  of  the  EC  to 
properly comment on such policies in a way that reflects their EC wide nature. See Annex 1 
for a more detailed description of the EDRC process, including the one pertaining to the euro 
area. 

This situation is unsatisfactory, both from an internal EC perspective and from the perspective 
of other OECD Members. 

The “APEC request” 

In  a  letter  of  October  2,  2003  to  the  EC  Permanent  Representative  to  the  OECD,  APEC 
Ambassadors  to  the  OECD  (see  Annex  2)  have  called  for  a  widening  of  future  EDRC 

1  

Although  this  review  would  only  deal  with  Community  policies,  it  is  felt  appropriate,  for  political 
reasons, to use the term “EU review”, as this is how the EC/EU is increasingly referred to outside the 
EC/EU. 

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examinations  of  the  euro  area  “to  include  all  EC  policies  and  EU  wide  policies  generally”. 
The main objective of this request is to permit a review of the EC as a single entity, so as to 
provide parity of treatment with other OECD members, where all economic policies are open 
for  examination.  This  letter  has  been  discussed  among  the  Commission  and  the  Member 
States in Paris where a majority of Member States favoured a positive reply, and in the EFC 
in Brussels. The Commission takes the view that the EC should give a positive answer to 
this  request,  and  accept  the  conduct  of  an  “EU  25  review”,  provided  a  number  of 
conditions are met.  

In  particular,  the  Commission  proposes  that  the  EC  accepts  1)  that  a  separate  and  distinct 
EU  25  Review  of  EC  structural  and  sectoral  policies  which  have  an  impact  on  the  EU  25 
economy  would  be  established;  and  2)  that  the  existing  Euro  Area  Review  would  continue 
and should be limited to macro economic policy issues. The two exercises should be separated 
because 1) the Euro Area Review concerns 12 MS (all of which are OECD Members), while 
the EU 25 Review would concern all MS (not all of which being Member of the OECD) and 
2)  different  modalities  would  apply  in  terms  of  representation.  From  the  perspective  of  the 
APEC countries, this ought to make little if any difference as the wide review these countries 
have called for would be guaranteed.  

Furthermore,  the  Commission  takes  the  view  that  any  comprehensive  EDRC  review  would 
need  to  be  carefully  and  appropriately  designed  and  adapted  to  take  duly  into  account  the 
special legal, institutional and political character of the EC and of the policies concerned.  

Benefits from an EU 25 Review  

An EU 25 Review would hold a number of benefits as it would: 

–  Reinforce the profile and visibility of the EC as an economic entity in its own right; reflect 
EC competences more fully and accurately, and bestow upon the representation of the EC 
a well-defined and recognised role in the EDRC committee; 

–  Underline  the  openness  and  transparency  of  the  EC,  also  in  terms  of  being  subjected  to 

constructive and justified criticism; 

–  Address in a single forum Community wide policies otherwise being addressed in a very 

repetitive and fragmented manner in all individual MS EDRC reviews. 

–  Serve to correct misunderstandings on the part of other OECD members and/or the OECD 

secretariat as regards certain EC policies (or aspects of same).  

–  Allow  the  EC  to  voice  legitimate  criticism  regarding  policies  of  other  OECD  members 
reviewed in the EDRC, without any risk of being accused of not being subject to similar 
scrutiny; 

–  And  constitute  a  practical  example  of  the current  Commission’s  emphasis  on  identifying 

means and policies to strengthen our economic performance and competitiveness. 

Procedural devices for an EU 25 Review 

Establishing an EU 25 Review would have to take account of the uniqueness of the EC as a 
supranational  organisation,  and  in  particular  the  division  of  competences  between  EC  and 

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MS, the rules on the external representation of the EC as well as the status of the EC in 
the OECD. 

Several of the policies examined in the EDRC would be the subject of exclusive competence 
(e.g.  trade,  agriculture  and  fisheries),  and  others  the  subject  of  shared  competence  (e.g. 
environment).  In  this  context  it  needs  to  be  reminded  that  the  EC  is  not  a  Member  of  the 
OECD,  but  has  the  status  of  “full  participant”  in  the  OECD.  The  Commission  fully 
participates in the main institutions and subsidiaries as the representative of the EC (Point 2 of 
the Supplementary Protocol to the OECD Convention). Only in the context of the Euro Area 
EDRC  review,  the  Euro  Area  is  represented  by  a  Joint  Delegation  of  the  Commission,  the 
Presidency  and  the  ECB.  Given  the  considerable  coordination  which  would  be  required  at 
various  levels  for  both  the  Euro  Area  Review  and  the  EU  25  Review,  the  EU  25  Review 
should alternate with the Euro Area Review, i.e. each review would take place biennially2. 

The legal complexities and political implications arising from the fact that six EC MS are not 
Members  of  the  OECD  need  also  to  be  taken  duly  into  account.  An  EDRC  EU  25  review 
would apply to Community-wide policies of all 25 MS. However, at present, 6 of the (new) 
EC MS are not members of the OECD3. This means that the EDRC would examine policies 
that have been formulated and apply to all 25 countries, while a significant number of those 
MS are not represented. The Commission considers that these 6 MS should be granted ad hoc 
observer status in the EDRC. 

Finally,  while  understanding  that  the  very  objective  is  to  have  a  comprehensive  review,  the 
scope  of  the  EU  25  Review  must  remain  manageable  and  reasonable.  The  move  towards  a 
broader  focus  of  EDRC  reviews  is  understandable  given  the  increasingly  complex 
interrelationships  between  different  economic  and  related  policies  in  all  OECD  countries. 
However,  one  will  have  to  ensure  that  an  EU  25  Review  would  deal  only  with  those 
Community  wide  policies  which  are  of  direct  relevance  to  the  objectives  of  the  EDRC. 
Furthermore,  the  EU  25  Review  should  lead  to  the  elimination  of  any  direct  review  of  the 
design and content of Community wide policies in the reviews of individual MS and should 
not  overlap  with  the  Euro  Area  Review  (i.e.  the  “EU  25  Review”  would  not  cover  EMU 
matters). Likewise, it should not cover policies that are already undergoing similar reviews in 
other OECD bodies or in the EDRC itself. 

A more exact mandate and modalities for any EU 25 Review will need to be elaborated with 
the OECD Secretariat and other OECD members.  

In view of the above:  

–  The Commission would negotiate the conditions and modalities for any EU 25 review with 
the OECD Secretariat and other OECD members (while ensuring appropriate coordination 
with the MS). 

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Given the differences in geometry of the euro area vs. the EU 25, as well as the difference in focus in 
terms  of  substance  of  the  reviews,  all  parties  would  be  best  served  with  two  separate  and  distinct 
reviews. From the perspective of the APEC countries, this ought to make little if any difference as the 
wide review these countries have called for would be guaranteed. 
Cyprus, Estonia, Malta, Latvia, Lithuania and Slovenia.  

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–  As  regards  the  representation  of  the  EC  in  EDRC  reviews,  the  Commission  should,  in 
accordance with the rules on the external presentation of the EC, serve as the representative 
of the EC in the EU 25 Review, subject to appropriate coordination with the MS. 

–  The  procedure  inside  the  EDRC  Review  will  follow  the  model  of  the  Euro  Area  review 
The  EU  25  -  as  other  EDRC  examinees  -  would  be  examined  on  the  basis  of  a  written 
survey/report prepared by the OECD Secretariat. During the examination, the Commission 
would make a brief opening statement and note possible points of disagreement as regards 
the  draft  OECD  Secretariat  survey  (after  close  coordination  with  the  MS).  All  OECD 
members would then be in a position to pose oral questions to the examinee. Following the 
examination, the Chair would draw main conclusions for the major policy issues examined 
and their conclusions, adopted by consensus in the Committee, would guide the redrafting 
(if any) of the survey as well as the formal recommendations contained therein. 

–  Since  this  review  will  concern  Community  wide  policies,  other  OECD  Members  should 
accept  that  the  status  of  the  EC  should  allow  for  equal  treatment  as  compared  to  other 
examinees  in  EDRC  reviews.  Several  possibilities  could  be  explored.  The  Commission 
could  be  granted  an  “ad  hoc”  right  to  vote  on  behalf  of  the  EC  in  the  EDRC.  The 
Commission could be elected into the EDRC as full member (as is, exceptionally, already 
the  case  in  the  OECD  Development  Assistance  Committee)  giving  to  the  Community  a 
right  to  vote.  Or,  it  would  have  to  be  ensured  that  the  EU  Member  State  holding  the 
presidency of the Council, after coordination with the Commission, would have the right to 
cast  the  relevant  vote  in  EDRC  on  behalf  of  the  EC.  The  Commission  will  explore  the 
various options with the OECD Secretariat, the other OECD Members and the EC Member 
States.  

Conclusion 

On the basis of the above, the Commission takes the view that an EU 25 review would hold 
clear benefits for the EC which clearly outweigh possible drawbacks such as the increased 
work  load  for  certain  Commission  services  and  the  need  for  coordination.  Therefore,  the 
Commission proposes that the EC accepts that: 

•  A separate and distinct EU 25 review of EC structural and sectoral policies which have an 

impact on the EU 25 economy would be established.  

•  The existing Euro Area Survey would continue and should be limited to EMU matters and 

macro economic policy issues. There would be no overlaps between both surveys. 

However,  this  acceptance  would  be  conditional  to  a  number  of  necessary  safeguards, 
including proper negotiation of the mandate and modalities of any EU 25 review, and proper 
consideration of the sui  generis nature of the EC, as  well as of the need to ensure parity of 
treatment  for  those  MS  who  are  not  currently  OECD  members.  Most  notably,  this  would 
mean that :  

•  The 6 EC Member States that are not currently members of the OECD would be granted 

observership status in the OECD. 

•  The EU 25 reviews should lead to the simultaneous elimination of any direct review of the 

design and content of Community wide policies in the reviews of individual MS. 

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•  Given the considerable coordination which would be required at various levels for both the 
Euro  Area  Review  and  the  EU  25  Review,  the  EU  25  Review  should  alternate  with  the 
Euro Area Review, i.e. each review would take place biennially. 

•  The Commission would have a clear mandate to negotiate the specification and modalities 
for  any  EU  25  review  with  the  OECD  Secretariat  and  other  OECD  members  (while 
ensuring appropriate coordination with the MS). 

•  In  accordance  with  the  rules  on  the  external  representation  of  the  EC,  the  Commission 
shall serve as the representative of the EC in the EU 25 Review, in close coordination with 
the MS. 

•  The examination procedure of the EU 25 Review will follow the same model as the Euro 

Area review and will be subject to the general consensus of the Committee; 

•  The European Community should be granted a status that allows for equality of treatment 

of the EC with regard to other examinees, which have a veto right in the EDRC.  

If the above is agreeable to the Council the European Commission’s Permanent Delegation to 
the OECD, to whom the APEC letter was addressed, will send a positive reply to the APEC 
Ambassadors, while pointing out to the conditions and modalities above. 

On this basis, the modalities for an EU 25 Review, addressing e.g. scope, frequency, rights of 
EC non-OECD members, and other aspects will be elaborated with the OECD Secretariat, the 
Chair of the EDRC and the other OECD Members. 

Annexes: 2 

1) 

2) 

Background to the OECD’s EDRC Reviews 

APEC letter 

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ANNEX 1 

Background to the OECD’s EDRC Reviews 

1. 

The nature of the EDRC review 

The  OECD’s  Economic  and  Development  Review  Committee  (EDRC)  carries  out  peer 
reviews  of  its  Members’  economic  policies  and  is  the  cornerstone  of  the  OECD  country 
economic  surveillance.  The  Committee  gathers  on  average  twenty  times  per  year  to  full 
fledged  examine  economic  policies  of  OECD  member  countries  economic  policies  on  the 
basis of a country report tabled by  the OECD  secretariat. In  order to allow close and stable 
relations  among  peers,  the  Committee  is  made  of  permanent  delegates  (the  Economic 
Counsellors of Permanent Delegations to the OECD). The Commission - DG ECFIN - sends 
on  an  ad  hoc  basis  delegates,  who  join  the  EDRC  Commission  permanent  delegate  on  the 
occasion of country examinations. 

The EDRC peer review process is unique. Although EDRC country reports are written by the 
OECD secretariat (essentially by the Economics Department), they are signed off by all the 30 
member countries, including the country under examination, and the Commission. Therefore 
they are the product of consensus among the OECD member countries plus the Commission 
and are released under the Committee’s responsibility and not of the OECD secretariat, as it is 
normally  the  case  for  most  other  OECD  country  reviews.  EDRC  procedures  imply  that  the 
examined  country  accepts  the  ownership  of  the  report’s  contents  and  is  put  under  a  moral 
obligation to adopt measures to tackle the issues raised in the report. Currently 19 of the 254 
EU Member Sates are members of the OECD EDR and regularly subject to the EDRC exams.  

Since 2001, the OECD EDRC also carries out a yearly self standing review of the euro area. 
Such a review was accepted by the Economic and Financial Committee (EFC) and its scope 
was clarified through an exchange of letters between the President of the EFC and the Head of 
the Economic Department of the OECD in 2000. The justification for such a specific review 
were the particular characteristics of the euro area economy with its single monetary/ex policy 
and  degree  of  co-ordinating  a  fiscal  policy  and  the  potential  for  such  a  review  to  generate 
useful insights into the functioning of EMU. It was agreed by the OECD and the EU MS that, 
in light of the nature of the euro area, the focus of these reviews should be “in particular on 
monetary  and  exchange  rate  policies”  with  “other  macroeconomic  and  structural  policies” 
being “dealt with in so far as they have an impact on economic developments in the euro area 
as  a  whole”.  This  scope  allows  for  an  assessment  of  structural  policy  aspects  that  are  of 
particular  importance  for  the  economic  performance  of  EMU,  such  as  product  and  factor 
markets  or  the  efficiency  of  welfare  systems.  Moreover,  the  regular  in-depth  chapter  on  a 
selected economic theme allows for its thorough analysis. The Commission, the ECB and the 
euro  area  Presidency  are  the  responsible  authorities  representing  the  euro  area  in  these 
examinations at the OECD, which requires a high degree of co-ordination in order to ensure 
an effective and unified representation. 

4 

The  following  EU  Member  States  are  currently  not  members  of  the  OECD:  Cyprus,  Estonia,  Latvia, 
Lithuania, Malta, and Slovenia). 

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2. 

The experience with euro area surveys 

2004 marks the fourth edition of the euro area survey. These surveys are composed of general 
chapters in which monetary, budgetary and structural policies are reviewed and a “structural” 
chapter  that  deals  with  one  specific  community  policy  in  greater  depth.  Last  year  this  was 
competition policy. 

Throughout  the  exercise,  DG ECFIN  coordinates  closely  with  other  Commission  services 
concerned by the survey. The preparation of the OECD Secretariat draft for the survey starts 
with the OECD secretariat missions to the Commission. DG ECFIN consults other services on 
the answers to the OECD’s questionnaire and invites them to attend the meetings. In this way, 
DGs  EMPL,  MARKT,  AGRI  and  TAXUD  are  often  involved  from  the  very  start  of  the 
process. Other relevant Commission services are involved depending on the special topic of 
the year.  

Following the draft survey prepared by the OECD Secretariat, DG ECFIN again liaises with 
other Commission services, and asks for their reactions and possible drafting amendments to 
the draft survey. These services’ views are also reflected in the draft Introductory Statement 
of the euro area delegation prepared by DG ECFIN. At this stage, DG ECFIN also coordinates 
the drafting amendments of Member States (via the EFC) for the draft survey and for the draft 
Introductory Statement.  

For  the  EDRC  examination  meeting  in  Paris  and  for  the  subsequent  drafting  session,  the 
Commission  services  concerned  by  the  special  topic  are  invited.  Following  these  meetings, 
DG  ECFIN  coordinates  with  other  Commission  services,  the  Eurogroup  Presidency  and  the 
ECB for the finalisation of the survey until the text is settled and accepted by the EDRC.  

The experience gathered so far shows that the task of coordinating the different positions can 
be  very  heavy  indeed.  In  2003,  the  exercise  started  in  January  with  the  preparation  of  the 
OECD  Secretariat  missions  to  the  Commission  and  was  only  concluded  at  the  end  of  July, 
principally because of the difficulties involved in settling the final text of the special chapter 
on competition policies. 

All  in  all,  the  current  format  of  the  OECD  Euro  area  survey  already  implies  quite  heavy 
coordination costs. The expansion of the scope to cover the full range of Community policies 
will naturally further increase this coordination burden – by how much will depend upon the 
approach that would be taken in such an event. Obviously, the more detailed and lengthier the 
OECD analysis is, the heavier the coordination burden will be and the greater the risk that the 
process will be drawn out over time. 

3. 

POLICIES THAT MAY BE SUBJECT TO ERC REVIEW 

Policies  that  have  an  impact  on  economic  performance  can  be  grouped  in  four  main 
categories: (1) macro-economic policies, (2) the common policies, such as trade, agriculture, 
(3) structural policies aimed at improved market functioning and (4) structural policies with a 
broader  objective  but  which  might  have  significant  economic  impact  (environment,  etc). 
Within  the  EU,  policies  mentioned  under  1  and  3,  and  to  a  much  smaller  extent  those 

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mentioned  under  4,  are  subject  to  some  economic  co-ordination.  This  is  not  the  case  for 
common policies. 

a. 

Macro-economic policies 

Macro-economic (monetary, fiscal and exchange rate) policy issues, are already analysed in 
the framework of the euro area, where there is a well-oiled co-ordinating mechanisms : those 
policies are indeed debated and reviewed on a regular basis, internally (Eurogroup Working 
Group of the Economic and Financial Committee and Eurogroup). 

b. 

Common policies 

Subjects of exclusive competence, e.g. common policies such as trade, agriculture, fisheries 
and  competition,  are  already  partially  touched  upon  in  Member  States’  national  EDRC 
reviews, as is the case for other OECD members such as the US. OECD members have not 
openly questioned the potential impact of such policy areas on the economic performance of 
their economies or the fact that those areas have been made the subject of EDRC review. The 
recent EDRC review of the US, for instance, did contain a section on trade.  

In addition to this, common policies are frequently the subject of discussions and analysis in 
other parts of the OECD, e.g. in the case of trade in the regulatory reform exercise, in the case 
of  agriculture  in  the  Agricultural  Committee  and  in  the  case  of  competition  policy  in  the 
Competition Committee and via “peer reviews”.  

c. 

Structural policies aimed at improved market functioning 

Structural  reform  policies,  in  particular  those  being  subject  to  the  Broad  Economic  Policy 
Guidelines  such  as  labour,  product  and  capital  market  reforms,  and  their  link  to 
macroeconomic  performance  have  been  discussed  already  in  a  fairly  general  way  in  the 
context  of  previous  EDRC  Reviews  of  the  euro  area.  Where  directly  aimed  at  improving 
market  functioning,  these  policies  could  obviously  be  said  to  have  potentially  important 
implications  for  overall  macroeconomic  performance.  To  this  extent  a  broad  discussion  of 
them could be warranted. Problems arise however where the discussion of particular policies 
goes much further and becomes much more detailed than would be justified by their impact 
on macroeconomic performance, as has happened on a number of occasions during the euro 
area EDRC reviews. This should be restrained. 

d. 

Other structural policies with a broader objective 

The  open-ended  character  of  the  OECD  makes  it  difficult  to  ensure  ex-ante  that  an  EDRC 
review of EU policies would limit itself to a pre-agreed set of structural policies. This would 
mean that opening the scope of EDRC reviews to EU-wide policies more generally could lead 
to an examination of policies where shared competences exist, or of policies that are not being 

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examined in OECD Member countries EDRC reviews5.  

It would be desirable, when agreeing on the scope and terms of the EU-wide review, to ensure 
as far as possible a prior identification of those structural policies with a broader objective that 
are to be reviewed. 

5 

For example, in a number of examinations, such as those of the National Treatment Instrument of the 
International Investment Declaration (not legally binding) or those under the OECD Codes for Capital 
Movements and Invisible Transactions (legally binding), EU MS policies are examined at national and 
European level, since EU policies are the ground for their policies. 

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The letter of the APEC Ambassadors 

ANNEX 2 

His Excellency Mr. John Maddison  

Ambassador 

European Commission’s Permanent Delegation to the OECD 

Dear Ambassador Maddison, 

EDRC TREATMENT OF EC POLICIES 

October 2, 2003 

We are writing to you in your capacity as representative of the EC at the OECD to ask you to 
take up an issue on our behalf with the relevant authorities in the European Community. 

Following the 1998 Canadian proposal, the Economic and Development Review Committee 
(EDRC) has conducted 3 formal reviews of the euro area. This has enabled the peer review 
processes of the OECD to play a constructive role in supporting ongoing economic reforms of 
euro  area  policies.  These  reviews,  however,  have  not  been  able  to  address  adequately  a 
number  of  policies  that  are  relevant  to  the  economic  performance  of  Europe.  Nor  are  these 
policies  effectively  addressed  in  individual  European  country  reports.  This  includes  both  a 
number  of  Common  Policies  that  are  implemented  at  the  EC  level  as  well  as  a  range  of 
directives that are established at the EC level, though implemented nationally. 

This  situation  means  there  is  not  parity  of  treatment  between  EDRC  examinations  of  EU 
countries,  and  those  of  non-European  countries  where  all  economic  policies  are  open  for 
examination. This situation is eroding the usefulness of the EDRC reviews and we believe is 
damaging the OECD’s reputation. 

We believe that this situation should be resolved for the 2004 examination. We ask that you 
take  this  issue  up  with  the  appropriate  authorities  to  ensure  that  future  OECD  economic 
examinations  of  the  euro  area  be  widened  to  include  all  EC  policies  and  EU  wide  policies 
generally.  This  would  ensure  that  all  economic  policy  areas  in  Europe  are  examined  as 
appropriate putting these reviews on the same footing as examinations of non-EU countries. 

While  individual  areas  of  EC  policy  can  be  looked  at  in  the  individual  committees  (for 
example the Trade Committee, the Agriculture Committee, and the Competition Committee) 
this  is  the  case  for  all  countries.  However,  only  the  EDRC  provides  the  opportunity  for  a 
comprehensive  review  of  all  issues  in  a  peer  review  process  that  analyses  the  interactions 
between different areas of policy and enables an overall assessment of economic performance 
and policy. 

Meaningful  assessment  and  coherent  policy  recommendations  require  an  understanding  of 
how  all  policies  interact.  This  is  certainly  true  with  regard  to  the  interactions  of  structural 
settings and macroeconomic policy instruments. 

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We do recognize that there are institutional complexities to such comprehensive treatment of 
economic policies in the EU. In our view, however, such institutional issues should not deter 
us  from  the  goals  of  equity,  knowledge  sharing  and  constructive  peer  review  that  are  so 
central to the work of the OECD. 

We look forward to your early response to this increasingly important issue. 

Ian Forsyth 
Ambassador to the OECD 
Australia 

Seiichiro Noboru 
Ambassador to the OECD 
Japan 

Carlos Flores Alcocer 
Ambassador to the OECD 
Mexico 

Sincerely, 

Jocelyne Bourgon 
Ambassador to the OECD 
Canada 

Kyung-tae Lee 
Ambassador to the OECD 
Korea 

Adrian Macey 
Ambassador to the OECD 
New Zealand 

Robert Smolik 
Chargé 
United States Delegation to the OECD 

cc: 
All Ambasadors to the OECD 
Donald Johnston, Secretary General, OECD 
Jean-Philippe Cotis, Head, Economics Department, OECD 
Niels Thygesen, Chair, EDRC, OECD 

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