Streamlining of annual economic and employment policy coordination cycles

1)OBJECTIVE

To streamline and synchronise the process of economic and employment coordination so as to focus more on the implementation of recommendations than the drawing-up of annual guidelines.

2)ACT

Communication from the Commission on streamlining the annual economic and employment policy coordination cycles (COM(2002) 487 final - Not published in the Official Journal).

3)SUMMARY

Objectives. Over the last few years the EU has developed an economic, social and environmental strategy that is articulated around the following objectives:

• realising the strongest possible economic growth, notably through an improvement in growth potential;
• progressing towards full employment;
• preserving social cohesion;
• complying with the principle of sustainable development.

Different coordination mechanisms. Besides the coordination of economic policies in the context of the broad economic policy guidelines (BEPGs), the Treaty provides for policy cooperation through the Stability and Growth Pact and the European employment strategy (the Luxembourg process). Other processes that apply in this area are the economic reform process (the Cardiff process), the macroeconomic dialogue involving the social partners in the context of the European employment pact (the Cologne process) and the open method of coordination established by the Lisbon European Council (the Lisbon process).

This development of policy coordination tools has made the coordination framework more complex and is not conducive to the formulation and dissemination of the Union's policy guidance. However, it is necessary for the Union to focus on effective coordination mechanisms so as to improve the implementation of strategies and facilitate the evaluation of outcomes. The Barcelona Council urged the rationalisation of those different coordination processes.

The proposals. The Commission proposes the following measures to achieve a streamlining of the various policy coordination cycles:

• to enhance the efficiency of policy coordination, notably by securing a better follow-up to implementation;
• to improve coherence and complementarity between the various processes and instruments;
• to foster more widely shared commitment and "ownership", including through stronger involvement of the European Parliament, the national parliaments, the social partners and civil society;
• to increase the transparency and intelligibility of the coordination cycle.

The Commission proposes to strengthen the focus of the various coordination processes in the medium term, to give greater prominence to the implementation of recommendations and the evaluation of their impact, and to focus activities on a few key points in the year. This should produce more coherent, more transparent and more effective processes, while preserving their autonomy and contributing to greater policy stability and predictability.

Principal elements of the new coordination cycle

Preparation of the spring European Council. The Commission is preparing a report for the European Council highlighting the areas where further progress has to be made and the key policy guidelines. The report will be accompanied by an implementation package, comprising the implementation report on the BEPGs, the draft joint employment and the implementation report on the internal market strategy. The Commission's various reports and scoreboards (the Cardiff report, the reports on State aid, and the innovation and enterprise policy scoreboards) will also be appended.

Spring European Council. This Council plays a defining role in the annual policy coordination cycle. It will review implementation and, on that basis, provide general guidelines for main priorities.

Commission proposals. The Commission will then present a guidelines package that includes the BEPGs and the employment recommendations with a view to drawing up a specific work programme based on the Council recommendations. The package was published for the first time in April 2003 and, in principle, covers a three-year period, up to 2006. Guidelines will continue to be issued each year to take account of possible major new developments but should otherwise remain unchanged until 2006. The internal market strategy will also cover questions concerning the internal market up to 2006. It will be adjusted only if necessary.

Adoption of new guidelines and recommendations. In its relevant compositions, the Council will adopt the BEPGs and the employment recommendations and will endorse action plans (e.g. the internal market strategy) after the June European Council has approved the guidelines package.

Implementation. The implementation assessment will be carried out during the fourth quarter on the basis of the systematic communication of information on the implementation of the policies adopted by the Member States and the assessment of that information by the Commission. The information provided by Member States can be submitted in a single document at the same time and not later than October. The Commission will therefore be able to assess the information and present its findings in the form of a new implementation package together with the spring report, marking the start of a new cycle.

The Commission proposes streamlining the related processes in order for them to provide input into the preparation of the implementation package and the spring report.

Medium-term strategy. The Commission wishes to put more emphasis on the medium term in the economic and employment fields so as to enhance the stability of guidelines and recommendations, allowing Member States to frame credible policy strategies geared towards implementing the recommendations and to avoid permanent redefinition of strategies. The policy strategy will therefore be related more clearly to the achievement of the objectives of the Lisbon agenda. Likewise, the focus will be shifted from defining policy strategies to implementing them. All of this will improve the visibility and impact of the strategy.

Broad economic policy guidelines. The BEPGs are to remain annual and will be fully reviewed only once every three years, subject to a review carried out on the Commission's initiative if it deems that the circumstances so warrant. The BEPGs are therefore more strategic, concentrating more on basics.

Employment guidelines. Similar benefits could be obtained for the employment guidelines (the Luxembourg process), with more substantial reviews every three years and the alignment of their timeframe to the deadline of 2010.

Internal market. The Cardiff process will concentrate on a more in-depth analysis of a limited number of core topics each year. The internal market strategy has adopted a five-year timeframe and its next phase could therefore be linked more closely with the Lisbon strategy. An agenda for action to be implemented up to 2006 should therefore be defined.

Coherence of the guidelines package. The areas covered by the various instruments need to be more clearly specified. The BEPGs maintain their central role and address macroeconomic policies, putting the necessary emphasis on structural policies aimed at promoting growth potential, employment and social cohesion, sustainable development and the transition towards a knowledge-based economy. The Luxembourg and Cardiff processes will make it possible to deal with their respective subject-matters in greater detail. The employment guidelines will keep their wide policy scope and their role as the main tool for policy coordination in the employment sphere, fully in line with the BEPGs. The Cardiff process will differentiate more clearly between the broader employment recommendations in the BEPGs and the specific actions of the internal market strategy at Community level.

Before they are introduced, all new coordination procedures, apart from those mentioned above, must demonstrate that the issues raised cannot be dealt with under existing procedures and that the new procedures bring real added value.

Timetable. The streamlining should be carried out in the run-up to the spring 2003 European Council.

See also

For further details, see:

Economic reform process (Cardiff process)

Lisbon strategy.

Luxembourg process: European employment strategy.

Last updated: 08.04.2003