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06 2021 | Communautarisation of the Euro Plus Pact on Competitiveness

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06 2021 | Communautarisation of the Euro Plus Pact on Competitiveness LEGISLATIVE TRAIN 08.2021 5 DEEPER AND FAIRER ECONOMIC AND MONETARY UNION / €129BN COMMUNAUTARISATION OF THE EURO PLUS PACT ON COMPETITIVENESS [ DEPARTURE DEMANDS ] > DEMOCRATIC ACCOUNTABILITY, LEGITIMACY & INSTITUTIONAL STRENGTHENING CONTENT The Euro Plus Pact, signed at the March 2011 European Council meeting by 23 of the 27 Member States, aims to ensure stronger economic policy coordination, to increase competitiveness and to establish a system of monitoring by the European Commission of a number of variables in order to detect financial imbalances in individual EU countries. As stated in the European Council conclusions: ‘the Euro Plus Pact will further strengthen the economic pillar of the EMU and achieve a new quality of policy co-ordination, with the objective of improving competitiveness and thereby leading to a higher degree of convergence.’ In particular, it is assessed if wages are evolving in line with productivity in order to identify competitiveness adjustment needs. Employment is to be fostered, EU fiscal rules are to be translated into national legislation, the stability of the financial sector is to be enhanced, and pragmatic coordination of tax policies is to be achieved. The measures of the Pact are to be applied by individual countries, but enforced through the open method of coordination. The implementation of commitments was due to be monitored politically by the Heads of State or Government of the euro area and participating countries on a yearly basis (whilst setting concrete actions to be achieved over the following 12 months), and reflected in the National Reform Programmes and Stability or Convergence Programmes. But, since the Pact was of a purely declarative nature and not underpinned by any legal obligations and enforcement mechanisms, it has been largely dormant and has received little attention in Member States. However, as outlined in the Five President's Report, its rationale is still relevant and, as such, the report proposes the integration of its relevant parts into the EU legal framework within stage 1 of the deepening process (i.e. by mid-2017). In its resolution ‘Towards a genuine Economic and Monetary Union’ from 20 November 2012 the European Parliament mentioned that the Euro Plus Pact should be integrated into Union law. The Commission has not yet proposed a roadmap to revive the Euro Plus Pact or to integrate it into EU law, and the Euro Plus Pact is mentioned neither in the Letters of Intent accompanying the 2017 and 2018 State of the Union speeches, nor in the Commission Working Programme 2018. References: • European Council, Conclusions of 24/25 March 2011, including the Euro Plus Pact (in Annex I), EUCO 10/1/11 • European Commission, The Euro Plus Pact - How integration into the EU framework can give new momentum for structural reforms in the euro area, EPSC Strategic Notes, 8 May 2015 • Juncker, J-C., Five Presidents’ Report on strengthening Europe's EMU, 2015 1/2 • European Parliament, Resolution of 20 November 2012 with recommendations to the Commission on the report of the Presidents of the European Council, the European Commission, the European Central Bank and the Eurogroup, ‘Towards a genuine Economic and Monetary Union’, 2012/2151(INL) • European Commission, State of the Union 2017 - Letter of Intent, 13 September 2017 • European Commission, Commission Work Programme 2018, COM(2017)0650, 24 October 2017 Author: Christian Scheinert, Members' Research Service, [email protected] As of 20 November 2019. HYPERLINK REFERENCES • http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/120296.pdf • https://ec.europa.eu/epsc/sites/epsc/files/strategic_note_issue_3.pdf • https://ec.europa.eu/priorities/publications/five-presidents-report-completing-europes-economic-and-monetary-union_en • http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-2012-430 • https://ec.europa.eu/commission/sites/beta-political/files/letter-of-intent-2017_en.pdf • https://ec.europa.eu/info/publications/2018-commission-work-programme-key-documents_en • mailto:[email protected] LEGISLATIVE TRAIN 08.2021 5 DEEPER AND FAIRER ECONOMIC AND MONETARY UNION / €129BN 2/2.
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