Assessment of the 1st EU Semester Brussels, 19 October 2011 Assessment of the first European Semester and its contribution to the achievement of the EU2020 Strategy Stakeholders & press presentation EP, Brussels 19 October 2011

Assessment of the 1st EU Semester Brussels, 19 October 2011 The study Carried out in summer 2011 Research team  Olivier DERRUINE (staff Ph. LAMBERTS MEP)  Anne TIEDEMANN Base material  Commission annual growth survey  Country recommendations as proposed by the Commission  Country recommendations as adopted by the Council  EU 2020 strategy

Assessment of the 1st EU Semester Brussels, 19 October 2011 AGS says : EU2020 targets will not be met 75% employment rate : will be missed by 2.2–2.6% 3% of GDP on R&D : will be missed by % targets  20% improvement in energy efficiency will be missed Education targets  10% drop-out rate will be missed by 0.5% (but several MS have no plans)  40% in tertiary education will be missed by 2.7% (best case) Poverty reduction target : several MS have no plans

Assessment of the 1st EU Semester Brussels, 19 October 2011 EU 2020 performance chart

Assessment of the 1st EU Semester Brussels, 19 October 2011 Lesson 1 : a (too) intricate governance scheme Too many benchmarks on different levels Different instruments, different status  SGP criteria : binding, sanctionable, treaty-based  Broad economic policy guidelines, employment guidelines : binding, treaty based  AGS : non-binding, solo-play by the Commission  Euro+ pact : non-binding, solo-play by the Council Overlap, lack of consistency in contents  see next table

Assessment of the 1st EU Semester Brussels, 19 October 2011

Assessment of the 1st EU Semester Brussels, 19 October 2011

Assessment of the 1st EU Semester Brussels, 19 October 2011 Lesson 2 : EU 2020 no longer in focus « Consolidation » of public finances is top (and only serious) priority  Although AGS itself says in annex that “fiscal consolidation is an essential pre-requisite for growth, it is [however] not sufficient to drive growth.” While EU 2020 should be overarching strategy, it hardly features in the AGS  Education, climate/energy targets only slightly referred to  R&D, poverty reduction targets absent altogether 7 EU 2020 flagships are totally left out

Assessment of the 1st EU Semester Brussels, 19 October 2011 Lesson 3 : Lack of consistency No direct link between country recommendations and performance gaps  Regarding the employment target, top performers (SE, NL and CY, except DK) and laggards or less ambitious countries (EE, IE, SL) are equally treated : they all receive a recommendation as if they all face the same challenge !  Regarding CO2 emissions, one recommendation for BU but none for HU, the worst performer Appropriate data not available in due time Few country recommendations do take all three dimensions (smart, sustainable, inclusive) of EU 2020  When they are all present, they differ widely in definition and scope  For instance, some recommendations (5 MS) address « growth-enhancing expenditure » but the scope differ (R&D&I for NL, care for DE, structural funds for IT) and the content is not always specified (BU, SK)…

Assessment of the 1st EU Semester Brussels, 19 October 2011 Lesson 4 : Council impact on recommendations In general, Council tends to water down the tone of recommendations In some cases, original recommendations are substantially modified  Example : strong recommendations to NL on addressing transport congestion issue – simply erased by the Council  One noteworthy amendment by the Council in the BU recommendation is to consult stakeholders on pension reforms (but why only in the BU case?)

Assessment of the 1st EU Semester Brussels, 19 October 2011 Lesson 5 : Approach to imbalances… unbalanced! AGS states it will address both deficit and surplus countries, however no recommendations for the latter Focus on wages in country-specific recommendations Six-pack confirmed the balanced approach (surplus/deficit ; also COM declaration) and that wages will not be addressed. So what is next?

Assessment of the 1st EU Semester Brussels, 19 October 2011 Lesson 6 : No distinction between EMU/non-EMU MS’ Despite Article 136 (« one of the major achievement of the IGC »), the recommendations do not specifically take into account if Member States adhere to the EMU or not. The new roadmap to Stability and Growth (October 12) announced two legislative pieces based on Art.136 to strengthen discipline in the MS. It means a contrario that all the potential of the distinction EMU/non-EMU has not been tapped.

Assessment of the 1st EU Semester Brussels, 19 October 2011 Lesson 7 : An increasing democratic gap AGS & Euro+ pact de facto supersede integrated policy guidelines  Some parliamentary consultation for the guidelines  NO parliamentary involvement at all for AGS & Euro+ pact Involvement of national, regional parliaments in NRPs and SCPs at best superficial, at worst non-existent Involvement of social partners non-existent  By the way, the 1st EU Semester pre-empted some provisions of the 6-pack that was not even in force at the time (the Directive on requirement for budgetary frameworks (to monitor infra-national public finances) (AU, CY, DE, IT, SL...) or the new preventive arm of SGP (enforceable ceilings on expenditure » for IT...)

Assessment of the 1st EU Semester Brussels, 19 October 2011 Recommendations Streamline the process  EU 2020 as the multi-annual policy framework (should embed any Euro+ type commitments); to be made (as) legally binding (as possible)  AGS (pls find new name) as the annual EU-wide policy guidelines (superseding BEPG & EG)  BOTH to be subject to co-decision in order to enable legitimacy Increase consistency of EU semester with EU 2020  Each concerned DG should be involved upfront  Should the drive remain with DG EcFin (hence strong bias towards basic budgetary discipline vs. More encompassing approach?)

Assessment of the 1st EU Semester Brussels, 19 October 2011 Recommendations (continued) Increase consistency between recommendations and performance gaps  Policy-area approach vs. Country-based approach? Increase the democratic legitimacy of the process  Co-decision on binding EU 2020 and AGS  Consultation of social partners for both  Based on six-pack, enforce effective involvement of MS parliaments in tabling of NRPs & SCPs