Is the Convention against EMU reform? If I had to indicate the dossier where the Convention has made the least progress, I would have to say that it was reform of the Economic and Monetary Union (EMU). This idea is also shared by Antonio Vitorino. The European Commissioner and Convention Member declared at the end of last week that the "Economic Governance" workgroup at the Convention "has a very low ambition". The stakes are, however, significant: re-balancing the two sides of the EMU by strengthening the economic angle in order to provide it with a content that is nearer to that of the monetary angle. Let's leave to one side these big and frightening words and not mention "European economic government", a formula that creates the impression that the EU is concocting a supranational economic power. Let's simply talk about the real objective, that of strengthening co-ordination between national economic policies and their coherency. What the Commission is proposing, appears quite reasonable. I'll spell it out:
a) transforming the "group of the Euro (Eurogroup) into an additional ECOFIN Council, which has the power to take decisions that can be applied in Euro-zone countries. The maintenance of the current situation would mean that the countries that participate in the single currency would in the future need the authorisation of countries that are not part of the single currency to adopt decisions which concern them (after enlargement they will be in a minority at ECOFIN), a situation that is obviously absurd;
b) strengthening the Commission's competencies for economic co-ordination and monitoring by providing recommendations on "broad economic policy" and the legal form of the "Council proposals" involving the "Community Method";
It appears that Klaus Hänsch, Chairman of the "Economic Governance" workgroup has received all the opinions of the Finance Ministers. It is not surprising that he received some negative reactions! These Ministers are, with a few exceptions, the most ferocious opponents of any measures that would reduce their national autonomy and their discretionary power in the economic policy arena. They don't reject the idea of co-ordination, on the condition that it remains in their hands and it keeps an intergovernmental character: the European Commission will simply be "invited" to attend their work, just like in the current Eurogroup, with the European Parliament remaining on the sidelines.
Would Government Heads go further than the Convention? Going beyond tactical considerations, the question is that of finding out whether Mr Hänsch is himself opposed to the Commission proposals. If this is the case, it would be naïve to expect positive conclusions from his group. He even went to Copenhagen on 7 September to indicate to Finance Ministers (meeting up in an informal session) that his group was going in the direction of outright rejection of the Commission demands: economic policies would remain the remit of Member States, Eurogroup would not become a formal institution subject to Community rules and the external representation of the Euro would not be conferred to the Commission. All this is clear (see our bulletin of 10 September p 12).
I've already had the occasion of expressing the impression that Heads of Government are not perhaps as prohibitive as their Finance Ministers with regard to the possibility of making the economic co-ordination procedures a little more European. It would be paradoxical if on this point, the Convention lagged behind Heads of Government and that it were too late for the IGC to strengthen this aspect of the constitutional treaty! If the workgroup keeps going in this direction, Convention Members who have another vision of this dossier will have to get themselves heard during the plenary. Meanwhile, it will be discussed on the fringes of the Convention and two positions deserve some mention:
a) Jacques Delors re-affirmed that EMU is currently off kilter and highlighted the cost that the EU had already paid for the absence of genuine economic co-ordination: "we just missed having greater growth during the good times and we now find ourselves in the absurd situation of having to reduce the deficits when growth is slowing down…Let's seize the opportunity of this failure (that's relative) in order to complete the EMU. Adopting a co-ordination pact of economic policies, which I proposed to no avail in 1997, would enable the Commission to propose to ministers, within a reasonable time limit, measures that could strengthen economic convergence for more growth and jobs".
b) Jean-Claude Juncker, Luxembourg Prime Minister asserted (see our bulleting on 11 October, p 6) that is was crucial to make Eurogroup "an object of the treaty", because it is incredible that in an enlarged Europe, the twelve countries of the Euro have to go cap in hand to request consensus from the thirteen countries that are not part of it, in order to make decisions that involve their zone! This issue has to be resolved by the Convention, added Mr Juncker, who, not insignificantly, also happens to be Minister of Finance. (F.R.)