1. Internal policies II: Economic and Monetary Union and Social Policy Prof. Andreas Bieler

2. Structure of lecture I. The History of EMU; II. The mechanisms of EMU; III. The normative underpinning of EMU; IV. EU Social Policy;

3. I. The History of EMU 1. First attempts in the 1970s; 2. The European Monetary System in 1979; France within the EMS; Important lesson for assessment of EMS as a whole: the EMS led to a convergence of national economic policies around a neo-liberal economic programme, partly due to the direct pressure by the EMS, partly due to conscious political decisions.

4. 3. Economic and Monetary Union 1991 EMU is adopted as part of the Treaty of Maastricht; Three stages: Stage 1: preparation; Stage 2: harmonisation; Stage 3: implementation; Final steps towards EMU;

5. II. The mechanisms of EMU 1. The convergence criteria: the inflation rate is not more than 1.5 per cent higher than the average of the three lowest inflation rates in the EMS; the long-term interest rate is not more than 2 per cent higher than the average observed in the three low inflation countries; a country has not experienced a devaluation during two years preceding the entrance in the union; the government budget deficit is not higher than 3 per cent of its GDP; the government debt is not higher than 60 per cent of its GDP;

6. The mechanisms of EMU: 2. The tasks of the European Central Bank (ECB); 3. The accountability of the ECB; 4. 1997 Stability and Growth Pact; Excessive deficit procedure; Multilateral surveillance procedure;

7. III. The normative underpinning of EMU loss of national economic policy autonomy; neo-liberal economic policy is institutionalised; EMU is part of a disciplinary neo-liberal project, repercussions for economic and employment policies;

8. The normative underpinning of EMU: new constitutionalism; trade unions become sidelined in the economic policy-making process; EMU serves mainly the interests of transnational capital;

9. IV. EU Social Policy 1. 1992 Social Protocol attached to the Treaty of Maastricht: extension of Community competence in social policy area; introduction of QMV in these areas; possibility for Commission to ask social partners directly to negotiate a directive on a particular issue; the new British Labour government signed up for the Social Chapter as part of the Treaty of Amsterdam in 1997;

10. EU Social Policy: Results of social dialogue. 1996 Parental Leave Directive; 1997 Atypical Work/Part-time Directive; 1999 Fixed-term Work Directive; 2002 voluntary Agreement on telework between social partners; 2004 voluntary Agreement on work-related stress; 2007 voluntary Agreement on harassment and violence at work;

11. EU Social Policy: Amsterdam Employment chapter. focus on labour market flexibility as a result of monetary and economic policy focusing on low inflation; co-ordination of national employment schemes; In sum, common policies in the area of social policy and employment are much weaker than in the monetary and economic fields. Social policy as a part of a market-building exercise rather than as protective measures against market forces (see role of ECJ)? (Leibfried 2006).