Actions programme for the promotion of research and analysis of issues related to the European Economic and Monetary Union
Date: 2006-10-13
Institutions: European Commission
Subjects: Economic and Monetary Union, action programme, economic analysis, economic policy, research

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Official Journal of the European Union

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Actions programme for the promotion of research and analysis of issues related to the European
Economic and Monetary Union

(2006/C 246/11)

1. INTRODUCTION

The Ecofin Council report to the European Council on 11 and
12 December 1999 in Helsinki on ‘Economic policy co-ordina-
tion’ (13123/1/99 Rev 1) called for an effective monitoring of
economic policies in stage three of the Economic and Monetary
Union (EMU). For this purpose, the Council considered the
improved understanding of
and
economic policy issues related to EMU an essential prerequisite.

economic developments

According to the Treaty, the European Commission has an
important role in informing the EU authorities, the Member
States and the various economic agents on both the economic
situation and prospects and on the impact of economic policy
measures on the functioning of EMU. To give informed advice
on economic developments and economic policy issues in EMU
a thorough economic analysis and research is paramount.
While a substantial part of this analysis and research is carried
out inside the Commission and its services, a great variety of
relevant contributions is produced by other institutions such as
international organisations and the research community at
large. The main objective of the actions programme for the
promotion of research and analysis of issues related to EMU is
to create a platform through which the results of this external
research can be channelled more effectively into the policy
debate within Community institutions.

2. THE NEED FOR A COMPREHENSIVE AND INTE-
GRATED APPROACH TO PROMOTE EMU RELATED
RESEARCH AND ANALYSIS

The creation of EMU requires a strengthening of the analytical
basis for economic policy decisions. Moreover, the awareness
of the policy requirements of EMU in the Member States needs
to be improved so as to raise the understanding for greater
economic policy co-ordination.

To benefit to the greatest extent from the output of external
analysis and research of EMU related issues, a comprehensive
and integrated approach governing the relations, contacts and
communications with the institutions producing such analysis
is required. On the one hand, this is necessary to channel the
results of this research in an appropriate way into the various
circuits dealing with economic policy matters within the Euro-
pean institutions. On the other, this allows for feedback from
the European Commission and other EU fora that can guide
and direct this research into areas, which are most important
and fruitful for the work of EU policy makers.

request

the explicit

The European Commission has responded to the need for such
a comprehensive and integrated approach by establishing a
broad-based actions programme implemented by Directorate
General for Economic and Financial Affairs (1). While some of
these actions were instigated at
from
Member States, others were created on the initiative of the
European Commission. Such actions include, for instance, the
establishment of an external expert group on analysis and fore-
casting macro-economic developments in the euro area (the
‘European Forecasting Network’); the organisation of research
conferences, workshops and seminars both on a regular and on
an ad hoc basis; the creation of a visiting fellows programme
within the Commission services; or the setting-up of a study
programme in the area of EMU related research with the
purpose of soliciting specifically focused contributions from
external researchers.

3. IMPLEMENTATION OF THE PROGRAMME

A detailed description of the various components making up
the programme and the supporting activities are listed below

(a) The European Forecasting Network

The creation of the European Forecasting Network (EFN) was
proposed in 2001 by a Franco-German initiative. This initiative
aimed at improving the analysis of euro-area economic condi-
tions and policy options through the production of regular
independent assessments of the economic outlook and policy
challenges by a network of leading EU research institutes.

The proposal received broad support by the Economic and
Financial Committee and the Eurogroup and the Commission
was invited to initiate the creation of such a network. The
Commission responded positively to this request and selected a
consortium of eight research institutes based in six different
Member States for the period 2002-2004.

This research network produced its first report in Spring 2002.
The network produced five further reports on a semi-annual
frequency, the last one in Autumn 2004.
In addition to a
regular conjunctural analysis and a macro-economic forecast
for the euro area, the various reports covered a wide variety of
themes. Topics included the development of
EMU relevant
labour cost and productivity in the euro area, macro-economic
shock absorption in the euro area, cyclical convergence in EMU
or the economic effects of enlargement on EMU.

(1) This programme of actions is part of the annual work programme
of the Directorate General Economic and Financial Affairs and is
authorised by means of a financing decision adopted by the
Commission.

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On the whole, the experience with the EFN during the period
2002-2004 was very positive, with the EFN reports providing a
valuable complementary contribution to the Commission
services' internal analysis of euro-area economic developments
and policy issues. In the light of this favourable overall assess-
ment, the Commission launched in spring 2005 the procedure
for the establishment of a new EFN for the period 2005-2007.
The selected network consists of ten research institutes from
nine Member States. The new network presented its first report
in March 2005. The special topic of the report dealt with the
challenges of relocation for the euro area economy, which
provided input into the Economic Review 2005. The special
policy issue of the spring 2006 report was the convergence
and integration of the new Member States.

services of the Commission. To this effect, leading economists
in the academic world, in international organisations and in
research institutions are encouraged to expound and discuss
original research work related to the formation and working of
the EMU in the framework of research conferences and staff
seminars. Apart from giving Commission staff better access to
on-going original research work, these programmes aim to
increase exposure to new approaches and give new insights on
issues of relevance for the Commission. Conversely, outside
participants in the programme have an opportunity to discuss
their research results with staff from the Commission and other
officials from EU institutions and, in doing so, contribute to
developing their perception of the policy relevance of their
research activity.

The reports are usually presented, on a date commonly agreed
between the Commission and the network, at a press confer-
ence organised by the EFN. The reports are being sent to the
Commissioner for Economic and Monetary Affairs and the
chairpersons of the Economic and Financial Committee, the
Economic Policy Committee and the Committee on Economic
and Monetary Affairs of the European Parliament. The reports
can be downloaded from the website of the EFN, which can be
accessed via a link on the Commission website:

http://europa.eu.int/comm/economy_finance/efn_en.htm.

In 2006 an evaluation is currently underway (in the context of
an overall evaluation of the economic research framework and
for Economic and Financial,
output of Directorate General
Affairs) to assess whether the EFN initiative has attained its
goals, namely the promotion of assessments of the economic
outlook and policy challenges of the euro area by independent
EU research institutes. The results of this evaluation will be an
important element in the decision on whether the EFN initiative
should be continued after 2007 or whether it can be phased
out.

the Research Conference Programme.

Several conferences have been organised over the past years in
the framework of
In
general, these conferences were organised by Commission staff,
but in some cases conferences were co-organised with other
institutions. Depending on the conference, attendance varied
between 50 and 300 participants and topics covered a wide
spectrum of issues such as the internationalisation of asset
ownership in the EU, statistical tools in business cycle analysis,
the economic and budgetary implications of global ageing and
the analysis of business cycles and growth in Europe.

Special conferences were organised to discuss major analytical
documents published by the Commission services such as the
‘Public Finance Report’ or the report on ‘Five years of EMU’.
The interaction with the academic world and policy makers is
understanding of policy
helpful
constraints and theoretical advice.
Issues such as economic
governance have to be discussed openly in order to raise the
credibility of the respective policy framework.

in improving mutual

(b) The Economic Research Conferences and Workshops and the

Economic Seminar Programme

The Economic Seminar Programme

The Economic Research Conferences and Workshops and the
Economic Seminar Programme aim to strengthen dialogue
between the Commission services and the research community.
The main purpose of these programmes is to bring to the
attention of Commission staff relevant, original research on
EMU related matters, which has been carried out by academia
and other research institutions. While the programme is mainly
targeted at the staff of Directorate-General for Economic and
Financial Affairs, staff of other Directorate-Generals is informed
about activities carried out and has the possibility to attend
these conferences and seminars.

The Economic Research Conferences

The Economic Research Conferences and Workshops and the
Economic Seminar Programme are designed to enhance, by
improving connections with the economic research com-
munity, the overall quality of the work carried out by the

A newly-designed Economic Seminar Programme (ESP) was
established in 2003 with a view to enhancing synergy effects
between EMU research inside and outside the Commission.
With this new approach,
the Commission seeks to attract
leading economists in the academic world, international organi-
sations, governments
and top research institutions. The
Commission invites selected researchers to present a seminar
and discuss original research work related to the formation and
working of European Economic and Monetary Union, both
from a macroeconomic and a microeconomic perspective.

The general aim of this programme is to enhance the overall
quality of work done by the Commission services, strength-
ening in-house know-how by improving its connections with
the economic research community. The programme allows
Commission staff to gain better access to ongoing research
work and to be confronted with new approaches and insights
on issues of relevance for the Commission. Conversely, the
programme gives seminar speakers the opportunity to learn
about the policy-making environment in which the Commis-
sion services operate.

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This programme is mainly managed by the members of the
Advisers' Group of the Directorate-General for Economic and
Financial Affairs. The advisers are in close contact with the
research community, enabling them to assess the relevant fron-
tiers in economic research and to disseminate this information
to Commission staff. The programme also constitutes a valu-
able component in the training strategy of the Commission
services.

During their one-day visit to the Commission services, speakers
present their research at a seminar of one-and a half hours,
after which they remain available to further discuss their
research with Commission staff. As a rule, the background
paper on which the seminar is based is made available prior to
the event. In 2003, 15 speakers gave a seminar under this
programme, and the figure in 2004 was 24 In 2005, a further
17 speakers were hosted. Together with the seminars given by
the Visiting Fellows and other, no-cost seminars, roughly one
seminar is organised per week.

(c) The Visiting Fellows Programme

Within the framework of the Visiting Fellows Programme (VFP)
the European Commission seeks to strengthen in-house knowl-
edge on topical
issues by bringing leading economists in
academic circles, international organisations, governments and
top research institutions for a short-term visit to the Commis-
sion services. These visits are usually of one or two weeks dura-
tion, with a possibility of up to six weeks, in order to benefit
from more in-depth analysis. Such a period would merge better
with the traditional sabbaticals in academic research institutions
and therefore enhance the interest for potential participants.

During their stay at
the Commission, Visiting Fellows are
required to actively participate in the work carried out by the
Commission services, primarily by engaging, in areas related to
their own research programme, in discussions with, and giving
advice to, Commission staff dealing with work in the same
areas. Furthermore, fellows are required to give one or more
their research agenda.
seminars on topics that are part of
Finally, fellows are requested to prepare a seminar paper on
their recent original work, which may later be published in the
working paper
the Directorate-
series ‘Economic Papers’ of
General for Economic and Financial Affairs.

Alongside the Economic Seminar Programme, the general aim
of this programme is to enhance the overall quality of the
Commission services' work, strengthening in-house know-how
through improved connections with the economic research
community. The programme aims to give Commission staff
better access to on-going research work, increase exposure to
new approaches and insights on issues of relevance for the
Commission services. Visiting Fellows will have an opportunity
to experience the policy-making environment in the Commis-
sion services operate.

The VFP was launched in October 2001. The number of visi-
tors invited has increased from 6 in 2002 to 10 in 2003 and
11 in 2004. In 2005, a further 8 fellows were hosted. The visi-
tors covered a broad range of research topics regarding macro-
economic policy issues in EMU.

The VFP has been able to attract a number of high-profile visi-
tors. The seminars have usually been well attended and presen-
tations have been of a high quality. Most of the papers deliv-
ered by the visiting fellows have met the standard criteria for
publication in scientific or policy-oriented economic journals
and, some of them have also been published as the ‘Economic
Papers’ series of
for Economic and
Financial Affairs.

the Directorate-General

Communication, effective interaction, and in some cases even
specific working relations with operational units within the
Commission services, have been successfully established in
most cases. Visiting fellows have been involved in discussing
specific work-plans and projects, they contributed directly to
the drafting of chapters for the Annual Economic Review, and
as a rule, their detailed suggestions and comments have been
incorporated into Commission staff's notes.

(d) The Economic Studies Programme

The Economic Studies Programme is a further instrument of
involving outside expertise in the work of the Commission
services.
this programme studies are
commissioned to the best qualified experts in academic institu-
tions and other research bodies (1).

In the framework of

analyses

Studies are launched by the operational directorates/units and
supervised by qualified staff. Given the decentralised nature of
topics vary in accordance with the different
these studies,
requests. They can comprise
and/or
theoretical
empirical analysis of specific economic issues, e.g. estimates of
the effects of further economic integration (financial market
integration, etc.). Studies mainly serve as a background material
to ongoing work of the Commission staff but when they are of
interest to a wider public they are published in the ‘European
Economy’ series or the ‘Economic Papers’ series of the Directorate-
General for Economic and Financial Affairs. Over the recent
past such studies have served in the preparation of the EU
Economic Review (e.g. determinants of productivity growth in
the EU, effects of globalisation) and the Public Finance Report
or helped to underpin the analysis of EMU surveillance issues,
such as the reform of the Stability and Growth Pact, or of
economic reform policy in the EU, such as the Lisbon agenda.

(1) This programme of actions is part of the annual work programme
of the Directorate General Economic and Financial Affairs and is
authorised by means of a financing decision adopted by the
Commission.

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4. SUPPORTING ACTIVITIES

sive use is made of comparisons with peer groups using specia-
lised analysis tools.

(a) External

databases

and

other

information supporting

the

Programme

The analysis of EMU related issues requires a comprehensive
array of relevant, reliable and timely information of statistical
and other more general nature. As a rule, this information is to
be provided for the evaluation at national, European and at a
global level. Information requirements principally cover macro-
economic developments, financial data (on financial structures,
financial assets, asset prices and issuance volumes), and specific
data on financial risk management. The latter concerns all kind
of
institutions (primarily balance
sheets, income statements and ownership information).

information on financial

The bulk of official macro-economic statistical information on
the EU is produced through the European Statistical System,
and is conveniently accessible through official sources for users
in the Commission. However, user requirements go far beyond
this stock of publicly available data.

Macro-economic data for non-European countries has to be
acquired from other sources. This includes for the main non-
EU industrial countries essentially (i)
the full sequence of
national accounts for the total economy and the institutional
sectors (corporations, general government, households, non-
profit institutions, the rest of the world), (ii) indicators related
to economic activity (qualitative business and consumer
surveys, indexes of production, prices, order books, etc.) and
(iii) labour market indicators (population, employment, unem-
ployment, wages, etc.).

As for financial data, comprehensive coverage for EU25 and
the US is vital and is not generally available from official
sources. This refers to all frequencies of (i) financial structure
related statistics
(monetary and financial aggregates, bank
lending, data on financial intermediaries, stock market capitali-
sation, etc.),
financial asset prices (money market rates,
exchange rates, bank lending rates, bonds market yields, equity
markets, housing prices), and (iii) financial asset issuance data
(record of bond issuance with information on issuer, amount,
maturity, rating coupon type etc.; and for equity markets initial
placement offers and additional offerings).

(ii)

While statistical
information constitutes the backbone of an
informed analysis of economic developments in EMU there
exists a host of analytical information, which can greatly facili-
tate the work of the economic analyst. The use of such infor-
mation may often be an efficient means of gauging rapidly the
major features of economic and financial developments. While
such information is sometimes provided as part of the access
to commercially offered databases, such products are often also
offered on a stand-alone basis. For this reason, responding to
the need for a broad-based and rapid information on economic
and financial developments may be most effectively achieved
by a subscription to such specialised products.

(b) Publication programme on EMU related matters

The annual publication programme on EMU related matters is
an important part of
the Commission services' external
communication policy. The programme aims to effectively
promulgate current and topical
intellectual output on EMU
related matters. Its primary target audience comprises national
and international economic institutions and academia, policy
makers, specialised media and multipliers. Established yearly,
the programme is
incorporated in the global European
Commission's Programme ordinaire de publication (POP).

is

the

‘European Economy’

The main series of the Commission services publications on
series.
EMU related matters
Reformed in 2002, several additional series have eventually
been added in order to complement and further develop its
editorial line and scope in a flexible manner. Its core editions
are the ‘Broad Economic Policy Guidelines’, the annual report
on ‘Public Finances in EMU’, the ‘Macroeconomic Forecasts’,
and the annual ‘EU Economy Review’, which are accompanied
by topical analyses of economic policy. Likewise former series
such as ‘Euro Papers’, written during the main phase of intro-
ducing the euro, were discontinued while new products of
economic policy debate, such as ‘Country Focus’, the Quarterly
Report on the Euro Area and the Annual Report on the Euro
Area are inserted. In this light, the publication activities of the
Commission services remain elastic and flexible so as to
adequately include forthcoming results and new focuses stem-
ming from economic
certain conditions
extending also to cooperation with commercial publishers.

research, under

As with financial data,
the bulk of data for financial risk
management has to be obtained from commercial databases.
There are a few highly specialised firms providing this informa-
tion on the potential risks of loans, financial investments and
worldwide financial
institutions. The data relates mainly to
balance sheets and income statements of financial institutions,
and ownership information on financial institutions, and exten-

To facilitate academic discussion and ensure broad access to
ongoing original research work also to a wider audience, all
paper series are also available on the Internet:

http://europa.eu.int/comm/economy_finance/publications_en.htm

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5. EVALUATION

With a view to gauging the effectiveness and efficiency of the
programme, the Directorate-General for Economic and Finan-
cial Affairs included, in its multi-annual evaluation programme
for the period 2005 to 2010, an external evaluation of the
economic research activities of the Directorate-General. The
exercise will focus, on the one hand, on the use of the outputs
of these activities in policymaking within the Commission and
their contribution to the maintenance and enhancement of
intellectual capital within the Directorate-General. On the other
hand, an examination will take place of the effects on external
users reached. As part of the exercise, it is envisaged that some
sort of benchmarking exercise against the work of research
departments of similar organisations could take place. The
evaluation was begun in 2005 and the final report will be
delivered in the summer of 2006.

services. It enables Commission staff to remain at the frontier
of economic research in their economic analysis. The broad-
ening of genuine research in the context of the 6th framework
programme of research allows the Commission services also to
contribute to basic economic research activities.

Research activities are not a one-way street. Through the
enhanced co-operation with the research community and
broad-based discussion of economic policy issues academia but
also the public at large is informed about strategic policy deci-
sions and policy co-ordination aimed at making EMU a success.
As a counterpart, the policy framework is strengthened and
gaining credibility in academia and among policy makers.

6. CONCLUSION

The action programme for the promotion of research in EMU
implemented within the Commission
related fields is well

The research and analytical activities have proven to be an
indispensable tool
in the process of strengthening economic
surveillance in EMU. They should, therefore, be maintained and
enhanced where necessary.