CouncilsJune 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

Councils c’d21 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

Councils c’d23 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

Councils c’d23 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.

Councils c’d27 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

Councils c’d27 October 2011 (Euro) c’d

Economic policy

Fiscal consolidation + structural reformSpain (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

Councils c’d27 October 2011 (Euro) c’d

On CoordinationNew 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.

Councils c’d27 October 2011 (Euro) c’d

10 Measures1) Regular Euro-summits - strategic on conduct of economic policy,

competitiveness, convergence (at least 2 p.y, linked to annual economic governance circle.);

2) President of Euro-summit (could be different from EU Council);

3) Eurogroup President (full time ?) Lines of responsibility and reporting Eurosummit, Eurogroup and preparatory groups to be developed

4) President Euro-summit, President Eurogroup, President Commission once a month; ECB, supervisory bodies, EFSF/ESM to be invited

5) Keep non-EU MS and EP informed;

Councils c’d27 October 2011 (Euro) c’d

10 Measures6) Eurogroup - Close coordination economic policy; financial stability,

strengthened surveillance economic and fiscal policies

7) Euro-working group continues (with Commission) Sub-group with reps from Finance Ministers

8) Euro-working group chaired by permanent Brussels based president. Possibly different from Economic and Finance Committee

9) Secretariats (Council general secretariat/ EFC) strengthened

10)Develop the rules and mechanisms – improve communication/ messages (president of Euro-summit/ president of Commission – President of Eurogroup and ECFIN Commissioner

New proposals 23 November 2011Common 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

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

Strengthening of economic and budgetary surveillance

Enhanced surveillanceCommission and ECB – address (potential) sources of difficulties

Closure monitoring (even if no excessive deficit)

What to doReport 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

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

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

Monitoring and assessingTreaty 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

Monitoring and assessingRules 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

Monitoring and assessingBudget 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

Monitoring and assessingDraft Budget

Budget balance as % of GDP – subsector of general government

Projection expenditure, revenue – main componentsWages

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 takenupIf 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)

Monitoring and assessingIf 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 obligationsCOM recommendation MS more measures (nat P)

MS obliged to fully report what it will do (MS EP)

Monitoring and assessingCOM 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

EU developmentsBanking 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

EU developmentsEconomic 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

A New Situation ?

More coordination at EU level of national budgetsBinding – and with sanctions for Eurozone countriesMove 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 ?

EPSUCentral 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 ?)

EPSUWhy 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

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 BankSolidarity mechanisms to assist countries hit; to

manage part of public debtEU investment programme (1% of GDP) in

infrastructure, low carbon economy, public servicesAddress precarious work and low pay

EPSU Further Steps

Position on Recent Economic DevelopmentsSupport 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?

In ShortMore and better jobs: Investment in an expanded

European recovery planStronger welfare systems to provide more security and

avoid social exclusionStronger 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

www.epsu.org