Councils

2. Councils June 2009 • Supervision of financial industry (3 supervisory authorities banking, insurance, secuirties) + European Systemic Risk Board 9 May 2010 • European Financial Stability Facility (EFSF) and EFSM (27); Later combined in ESM (from 2013) 24-25 March 2011 • EuroPact Plus

3. Councils c’d 21 July 2011 • Greece “the new package of measures including privatisation (..) These are unprecedented, but necessary, efforts to bring the Greek economy back on a sustainable growth path. We are conscious of the efforts that the adjustment measures entail for the Greek citizens, and are convinced that these sacrifices are indispensable for economic recovery and will contribute to the future stability and welfare of the country. “ IMF, private sector, lower interest rates (Balance of payments facility), extended maturities, use of EFSF, Task force that will work with Greek government • Reform of EFSF allowing to act (precaution), recapitalise financial institutions (loans to banks), intervene in markets • Fiscal Consolidation below 3% deficit in 2013; implement recommendations AGS • Economic governance 6 pack to be adopted, credit rating agencies to be tackled

4. Councils c’d 23 October 2011 (27) A growth agenda - “smart, sustainable, inclusive and green growth” • Single Market (end of 2012 approve 12 priorities of Single Market Act; implementation Services Directive • Road map Digital Single Market 2015 • Reduce administrative burden 25% in 2012 (2007 objective) Focus on simplification, on customs, tax, company law and annual accounts; Smart regulation agenda – reduce overall regulatory burden • Implementing the country specific recommendations of annual growth survey; • Energy efficiency, R&D, energy market/ investment. • Increase cofinancing from EU funds–boost investment

5. Councils c’d 23 October 2011 (27) • Economic governance measures (6 pack – more surveillance, coordination – role of Commissioner to monitor and additional enforcement strengthened), EU 2020 strategy; European semester; Euro-Plus Pact “new quality of economic policy coordination” among participating countries (EU17 + DK, PL, BG, RO, LV, LT) • European Semester 2012 – Annual growth survey in December 2011 + EuroPact Plus implementation; tax policy coordination including CCCTB, FTT • Financial regulation – a.o credit rating agencies • Relation Euro-zone and EU – Treaty changes need to be improved by 27 MS • Trade – renewed emphasis on bilateral/ regional agreements; deep & comprehensive free trade with neighbors.

6. Councils c’d 27 October 2011 (Euro) • Private sector involvement 50% • Monitoring of Greece’s austerity • EFSF’s “fire power” increased – 1000 bn (including seeking Chinese etc funding) Strict IMF conditionality – Commission surveillance • Banks to recapitalise - 9% capital base of most valued assets

7. Councils c’d 27 October 2011 (Euro) c’d Economic policy • Fiscal consolidation + structural reform • Spain (reduce budget deficit, restructure banking sector, reform product and labour markets, constitutional balanced budget amendment; reforms needed to increase growth and reduce “unacceptable high level of unemployment” – labour market change to increase flexibility at firm level, employability of the labour force, and extending reforms in the service sector • Italy (Present ambitious reform; balanced budget in 2013, surplus in 2014 leading to reduction of government debt in 2014 to 113% of GDP, balanced budget rule in constitution; structural reforms include “ liberalizing local public services and utilities”, reform labour legislation especially dismissal rules; review unemployment benefit system end 2011 etc. Commission to monitor implementation

8. Councils c’d 27 October 2011 (Euro) c’d On Coordination • New measures going above and beyond the package on economic governance to strengthen economic and fiscal coordination and surveillance • Ten measures to improve the governance of the Euro-area • A mandate to strengthen the economic union – including Treaty changes. Interim report in December 2011. Final report in March 2012.

9. Councils c’d 27 October 2011 (Euro) c’d 10 Measures • Regular Euro-summits - strategic on conduct of economic policy, competitiveness, convergence (at least 2 p.y, linked to annual economic governance circle.); • President of Euro-summit (could be different from EU Council); • Eurogroup President (full time ?) Lines of responsibility and reporting Eurosummit, Eurogroup and preparatory groups to be developed • President Euro-summit, President Eurogroup, President Commission once a month; ECB, supervisory bodies, EFSF/ESM to be invited • Keep non-EU MS and EP informed;

10. Councils c’d 27 October 2011 (Euro) c’d 10 Measures • Eurogroup - Close coordination economic policy; financial stability, strengthened surveillance economic and fiscal policies • Euro-working group continues (with Commission) Sub-group with reps from Finance Ministers • Euro-working group chaired by permanent Brussels based president. Possibly different from Economic and Finance Committee • Secretariats (Council general secretariat/ EFC) strengthened • Develop the rules and mechanisms – improve communication/ messages (president of Euro-summit/ president of Commission – President of Eurogroup and ECFIN Commissioner

11. New proposals 23 November 2011 • Common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the Euro area • Strengthening of economic and budgetary surveillance of Member States experiencing or threatened with serious difficulties with respect to their financial stability in the euro-area

12. Strengthening of economic and budgetary surveillance • Euro Area • MS with serious difficulties or being threatened with... • MS receiving financial assistance (ESM, IFIs..) • Commission may decide to subject a MS with fin. difficulties to enhanced surveillance – MS can express views; every 6 months • Commission shall decide to put under surveillance if MS is receiving funding

13. Strengthening of economic and budgetary surveillance • Enhanced surveillance • Commission and ECB – address (potential) sources of difficulties • Closure monitoring (even if no excessive deficit) • What to do • Report on the financial situations of financial institutions • Stress tests banking sector • Assessments of regulatory capacities over banking sector • Information on monitoring macro-economic imbalances • Commission (with ECB) regular review missions – progress – report to EFC – assess further measures • When, and if fin situation of MS has adverse effect on others/euro-area – Council (qualified majority) may recommend MS seeks fin. assistance and macro-economic adjustment

14. Strengthening of economic and budgetary surveillance • Decision can be made public; when then EP may invite MS for hearing/ views; MS parliament might invite Com for hearing • When fin. assistance is sought inform. COM prepares assessment. EFC will discuss • When fin assistance needed from EFSF/ESM the ECB/IMF shall analyse sustainability of government debt (ability to repay) • MS receive assistance to prepare adjustment programme–aim restoring capacity to go to fin market (broadening, strengthening, deeping measures) Council (qualified majority) approves adjustment programme • Full cooperation to be given

15. Strengthening of economic and budgetary surveillance • COM and ECB with MS changes needed to adjustment programme – Council decides with qualified majority • If MS does not comply, Council with qualified majority may say so • If MS has insufficient admin capacity or significant problems in implementation it SHALL seek technical assistance of COM • EP Committee may have exchange of view with MS • COM reps maybe invited to national parliaments If under adjustment then replaces stability programmes,procedures of excession deficit (adjustment programmes set budget targets), excessive imbalance procedures, European semester, monitoring procedures • Post surveillance - Remain under surveillance as long as a minimum of 75% is not repaid – Council may extend with QM surveillance – QM adopt corrective measures

16. Monitoring and assessing • Treaty says MS economic policy matter of common concern, sound public finance, do not risk function EMU • Attention to planning stage (guiding principles and targets) and now synchronised monitoring • Budgetary timeline – stronger synergies from policy coordination – ensure COM and Council recommendations are integrated in national process for budget • MS medium term fiscal plan + Stability programme 15 April – Draft budget laws no later then 15 October – COM opinion 30 Nov – adoption before 31 December

17. Monitoring and assessing • Rules based fiscal frameworks, national rules consistent with EU budget objectives – respect GSP – general government • Structural balanced budget rules – into national legislation the EU fiscal framework – binding rules – preferably of constitutional nature • Fiscal councils • Van Rompuy (Council) annouces these reforms • Strengthened surveillance complement GSP; Enhanced monitoring for better outcomes

18. Monitoring and assessing • Budget to be issue of common concern (spill-over) • Submit to COM for assessment in advance of adopting. COM opinion to be taken into account – COM assesses if recommendations context European semester are taken up – COM in parliament MS. If not taken up “aggravating factor” to place MS in excessive deficit procedure • If in excessive deficit – closer monitoring – comply with COM recommendations

19. Monitoring and assessing • Draft Budget • Budget balance as % of GDP – subsector of general government • Projection expenditure, revenue – main components • Wages • Measures to deal with difference targeted and unchanged policies (less detailed for measures with impact below 0,1% GDP (Consider spill over effects of fiscal policy reform • Expected economic development • How recommendations are takenup • If not COM can request revised draft • If in excessive deficit indepth assessment (general government an subsector) and liabilities of government owned entities and government contracts – extend to which they contribute to excessive deficit (PPPs, PFI etc)

20. Monitoring and assessing • If in excessive deficit • More regular reporting to COM and EFC and on measures taken to achieve targets on expenditure and revenue side (Letter COM to Italy on executing measures) • MS subject to closer monitoring subject comprehensive independent audit of accounts in cooperation with national supreme audit institutions (reliability, completeness, accuracy) Eurostat judges quality of data • MS in risk of not complying with obligations • COM recommendation MS more measures (nat P) • MS obliged to fully report what it will do (MS EP)

21. Monitoring and assessing • COM will take account of reports before imposing non-interest bearing deposit • Council takes into account to place MS in excessive deficit (unclear) • If MS has macro-economic adjustment programme does not apply

22. EU developments • Banking Crisis leading to a recession and Social Crisis • Became a Public Debt Crisis giving rise to Austerity • Deeping the Social Crisis and causing a new recession ? • We are ending with a Democratic Crisis in the Eurozone/EU

23. EU developments Economic Policy and Institutional Changes • EU financial supervisory authories • European Semester (annual growth survey and recommendations) • EuroPact plus • Legislative measures (6-pack) • Programme Countries (Greece, Ireland, Portugal) • EFSF to become ESM • Role for the IMF (Latvia, Roumania, Hungary, Ukraine, etc. ), • SPIV (getting Chinese money) • Increased role for the ECB (not just monetary – secret letters) • Task Force on Greece. • Spain & Italy forced to take measures. Italy to be monitored • Increased economic coordination with Euro-summit institutionalised • Permanent Euro WG President, “reinforced surveillance beyond 6 pack” • Commissoner with enforcement powers • Limited Treaty changes proposed Democracy?

24. A New Situation ? More coordination at EU level of national budgets Binding – and with sanctions for Eurozone countries Move towards Fiscal Union (shift…) in Eurozone Opens discussion on European economic government What will this mean for affiliates of EPSU ? E.g: Influencing Annual Growth Survey/ Recommendations Our Capacity Coordination of Collective Bargaining Ex ante demands ? Improving Capacity for Solidarity Actions – e.g the weakening of labour legislation in RO, CZ, SK, HU, Greece (Russia, , Ukraine, Georgia, Moldova…) Influencing EP elections and European Citizen Initiative on Right to Water – A Referendum on EU leadership ? In which League do we wish EPSU to play ?

25. EPSU • Central theme in our work – see appendix on review of policies, research and actions – also in CEE constituencies Next • Continue monitoring, research • Opposition to Austerity–Promoting Alternatives • Call for Joint Action • Statement (No to austerity Yes to Public Services Growth and Jobs, for alternative economic policy; respect for autonomy, collective bargaining; for a democratic & social Europe) • Make EPSU joint approach visible (Use Social Media ?)

26. EPSU • Why need for Action ? Serious attack on core bargaining rights in several EU states; Serious threat to public services; We defend workers and members • Why Greece, Hungary (symbol of attacks on bargaining rights) Why Ministers of Finance (symbol of austerity policies) Why EU embassies (symbol of coordinated nature of policies) • Why joint ? EU coordination (AGS, Euro-Pact Plus, EU-surveilance/ enforcement; ECB letters...) • Why on 30 Nov ? Council of Ministers, European Council, actions foreseen • Why visible ? Message that we are concerned, our alternatives, capable of coordination (influence) and that there is workplace action. Workers in Europe • Reacting jointly to influence new reality being shaped

27. Economic Crisis – Demands Address inequalities, macro-economic imbalances, greed and strengthen the public services Respect autonomy of the social partners and increase coverage by collective agreements Financial Transaction Tax at EU level; Wealthy; Tax Justice; Financial Regulations System of Eurobonds, European Public Bank Solidarity mechanisms to assist countries hit; to manage part of public debt EU investment programme (1% of GDP) in infrastructure, low carbon economy, public services Address precarious work and low pay

28. EPSU Further Steps • Position on Recent Economic Developments • Support Community Method of Working (role of Commission, Parliament); Rejection of enforcer if no democratic steps; Legal analysis (role of ECB; strength of wage clause); Write off public debts through public audits • Integrate European Semester in our work (annual cycle) and Influence Annual Growth Survey • New one before end of November to be addressed by Council on 8 December • Work with others – EAPN... • Reflect on Coordinating influence Action and having an impact –next focus Spring Council,1 March 2012?

30. In Short • More and better jobs: Investment in an expanded European recovery plan • Stronger welfare systems to provide more security and avoid social exclusion • Stronger workers’ rights and an end to the dominance of the short-termist market principles. Priority to social rights and collective action • Better pay: stronger collective bargaining. • European solidarity as a protection against the excesses of financial capitalism

31. www.epsu.org