Procedure : 2010/0281(COD)
Document stages in plenary
Document selected : A7-0183/2011

Texts tabled :

A7-0183/2011

Debates :

PV 22/06/2011 - 16
PV 22/06/2011 - 18
CRE 22/06/2011 - 15

Votes :

PV 23/06/2011 - 12.13
CRE 23/06/2011 - 12.13
Explanations of votes
Explanations of votes
Explanations of votes
PV 28/09/2011 - 4.11
CRE 28/09/2011 - 4.11
Explanations of votes
Explanations of votes
Explanations of votes
Explanations of votes

Texts adopted :

P7_TA(2011)0287
P7_TA(2011)0424

REPORT     ***I
PDF 461kWORD 399k
6 May 2011
PE 454.699v04-00 A7-0183/2011

on the proposal for a regulation of the European Parliament and of the Council on the prevention and correction of macroeconomic imbalances

(COM(2010)0527 – C7-0301/2010 – 2010/0281(COD))

Committee on Economic and Monetary Affairs

Rapporteur: Elisa Ferreira

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 EXPLANATORY STATEMENT
 OPINION OF THE COMMITTEE ON LEGAL AFFAIRS ON THE LEGAL BASIS
 OPINION of the Committee on Employment and Social Affairs
 PROCEDURE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council on the prevention and correction of macroeconomic imbalances

(COM(2010)0527 – C7-0301/2010 – 2010/0281(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to Parliament and the Council (COM(2010)0527),

–   having regard to Article 294(2) and Article 121(6) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0301/2010),

–   having regard to the opinion of the Committee on Legal Affairs on the proposed legal basis,

–   having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–   having regard to the opinion of the European Central Bank of 16 February 2011(1),

–   having regard to Rules 55 and 37 of its Rules of Procedure,

–   having regard to the report of the Committee on Economic and Monetary Affairs and the opinion of the Committee on Employment and Social Affairs (A7-0183/2011),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

POSITION OF THE EUROPEAN PARLIAMENT

AT FIRST READING(2)*

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REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the prevention and correction of macroeconomic imbalances

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 121(3) and Article 121(6), in combination with Article 148(3) and (4) and Article 136 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee(3),

Acting in accordance with the ordinary legislative procedure,

Whereas:

(1)      The coordination of the economic policies of the Member States within the Union should be developed in the context of the broad economic policy guidelines and the employment guidelines with a view to contributing to the achievement of the objectives of the Union defined in Article 3 of the Treaty on European Union and the fulfilment of the requirements provided in Article 9 of the Treaty on the Functioning of the European Union (TFEU), and should entail compliance with the guiding principles of stable prices, sound and sustainable public finances and monetary conditions and a sustainable balance of payments.

(1a)    The aim of a strong economic coordination must be the establishment of a stable economic and social union based on the principles of the community procedure.

(1b)    The internal market, as provided for by the TFEU, should work for the sustainable development of the Union based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social cohesion, and a high level of protection and improvement of the quality of the environment.

(1c)     The European Council of 17 June 2010 adopted a new strategy for jobs and growth, the Europe 2020 strategy, to enable the Union to emerge stronger from the crisis, and to turn its economy towards smart, sustainable and inclusive growth, accompanied by high level employment, productivity and social cohesion. The European Council also decided to launch, on 1 January 2011, the European semester for policy coordination to allow Member States to benefit from early coordination at Union level and to enable enhanced surveillance and a simultaneous assessment of both budgetary measures and structural reforms, fostering growth and employment.

(1d)    Article 121(2) TFEU provides for the adoption of broad guidelines of economic policies and Article 148(2) TFEU provides for the adoption of employment guidelines.

(1e)     In order to develop a coordinated strategy for employment, as provided for by the TFEU, Member States and the Union should work in compliance with the guiding principles of promoting a skilled, trained and adaptable workforce and labour markets responsive to economic change.

(2)      There is a need to draw lessons from the first decade of functioning of the economic and monetary union and, in particular, a need for improved economic governance in the Union built on a stronger national ownership.

(2a)    Achieving and maintaining a dynamic internal market should be considered an element of the proper and smooth functioning of economic and monetary union.

(2b)    The improved economic governance framework should rely on several inter-linked and coherent policies for sustainable growth and namely, a Union strategy for growth and jobs, a European Semester for strengthened coordination of economic and budgetary policies, an effective framework for preventing and correcting excessive budgetary positions (the Stability and Growth Pact), a robust framework for preventing and correcting macro-economic imbalances, enhanced financial market regulation and supervision.

(2c)     A comprehensive and integrated solution to the euro area debt crisis is needed since a piecemeal approach has not worked so far.

(2d)    In order to enhance economic growth and support the objectives of Europe 2020, unused payment appropriations should be reallocated to common programs aimed towards growth, competitiveness and employment, the lending capacities of the European Investment Bank as well the creation of a project bonds market should be used to attract funding from other financial institutions and private investors on the capital market such as pension funds and insurers to finance European projects.

(2e)     Strengthening economic governance should go hand in hand with reinforcing the democratic legitimacy of economic governance in the Union, which should be achieved through a closer and a more timely involvement of the European Parliament and the national parliaments throughout the economic and budgetary policy coordination procedures.

(2f)     The European semester for economic policy coordination (Semester) should play a vital role in implementing the requirement under Article 121(1) TFEU that Member States regard their economic policies as a matter of common concern and coordinate them accordingly. Transparency, accountability and independent oversight are an integral part of enhanced economic governance. The Council and the Commission should make public and set out the reasons for their positions and decisions at the appropriate stages of the economic and budgetary policy coordination procedures.

(2g)    The Commission should have a stronger and more independent role in the enhanced surveillance procedure as regards assessments that are specific to each Member State, monitoring, missions, recommendations and warnings. In particular, the role of the Council should be limited in the steps leading to potential sanctions and the reversed qualified majority voting in the Council should be used wherever possible under the TFEU. The member of the Council representing the Member State concerned and those which are not complying with the Council recommendations to take corrective action under the Stability and Growth Pact or to address excessive macroeconomic imbalances should not participate in the vote.

(3)      In particular, surveillance of the economic policies of the Member States should be broadened beyond budgetary surveillance to prevent excessive macroeconomic imbalances and vulnerabilities within the Union. ▌

(3a)    Internal imbalances should be considered in the study of macroeconomic imbalances, including private and public debt, its evolution and origin (domestic or international) and late payments of the country, especially from the public sector and big multinationals to small and medium-sized enterprises.

(3b)    Internal market developments should also be considered, including the linkage between wages and productivity in the labour market and the existence of legal barriers that do not allow direct free concertation between enterprises and workers.

(4)      To help address such imbalances and vulnerabilities, a more integrated economic and social approach and a procedure laid down in detail in legislation is necessary.

(4a)    This Regulation does not address the current situation in the short-term but rather in a structural approach for the medium- to long-term.

(4b)    The framework for preventing and correcting macroeconomic imbalances and the complete economic governance framework should complement and be compatible with a Union strategy for growth and jobs which aims at boosting the Union's competitiveness and social stability. However, these interlinkages should neither provide for exemptions to the provisions of this Regulation nor for exemptions to the Stability and Growth Pact.

(4c)     The permanent crisis mechanism should be adopted under the ordinary legislative procedure and inspired by the Union method, in order, on the one hand, to strengthen Parliament’s involvement and improve democratic accountability and, on the other, to draw on the expertise, independence and impartiality of the Commission.

(4d)    The volatility of the markets and the levels of the government bond spreads of certain Member States whose currency is the euro are calling for a resolute action to defend the stability of the euro.

(4e)     The measures adopted under this Regulation should be fully consistent with horizontal provisions of the TFEU, namely Articles 7, 8, 9, 10 and 11 TFEU, with Article 153(5) TFEU, and with the Protocol (No 26) on services of general interest annexed to the Treaty on European Union and to the TFEU.

(5)      It is appropriate to supplement the multilateral surveillance referred to in Article 121(3) and (4) TFEU with specific rules for detection, prevention and correction of macroeconomic imbalances and vulnerabilities, which procedure it is absolutely essential to incorporate into the annual multilateral surveillance cycle. Macroeconomic imbalances are defined as situations in which a Member State experiences large current account deficits, significant losses of competitiveness, large and unusual increases in asset prices, high levels of or a significant deterioration in external, public sector or private sector indebtedness or a significant risk thereof.

(6)      This procedure should put in place an alert mechanism for early detection of emerging macroeconomic imbalances and vulnerabilites. It should be based on use of an indicative and transparent scoreboard comprising indicative thresholds, combined with economic judgment.

(7)      In order for the scoreboard to function efficiently as the basis for improved surveillance of macroeconomics, the scoreboard should consist of a limited set of real and nominal economic, financial and structural indicators relevant to detection of macroeconomic imbalances, with corresponding indicative thresholds. Symmetry in the interpretation of numerical thresholds means that excessive positive or negative values as well as divergent evolutions of similar indicators across Member States shall trigger a closer review. The composition of the scoreboard should evolve over time so as to adapt to the changing nature of macroeconomic imbalances, inter alia due to evolving threats to macroeconomic stability or enhanced availability of relevant statistics. The indicators should not be contemplated as goals for economic policy but as tools to take account of the evolving nature of the macroeconomic imbalances within the European Union.

(7a)    The indicators of macro-economic imbalances should be complemented by headlines indicators, in the in-depth review,  within the macro-structural surveillance foreseen under the Union strategy for growth and jobs, with particular focus on the key objectives of the strategy (employment, innovation, education, social inclusion, climate and energy).

(7b)    Symmetrical criteria will not be taken into account on the implementation of fines for commercial surpluses and commercial deficits.

(8)      The crossing of one or more indicative thresholds need not necessarily imply that macroeconomic imbalances are emerging, as economic policy-making should take into account inter-linkages between macroeconomic variables. Conclusions should not be drawn from an automatic reading of the scoreboard: economic judgment should ensure that all pieces of information, whether from the scoreboard or not, are put in perspective and become part of a comprehensive analysis and, in this respect, an analysis of the imbalance should particularly also include the identification of the part of the economic cycle the Member State is experiencing as well as the potential spillovers that the imbalance is creating within another Member State, the euro area or the whole of the European Union.

(9)      Based on the multilateral surveillance procedure and the alert mechanism, the Commission should, by way of preliminary assessment, identify the Member States to be subject to an in-depth review. Conducting such an in-depth review should not imply a presumption of the existence of excessive macroeconomic imbalances. The in-depth review should encompass a thorough analysis of the causes of imbalances and the capacity of the Member State under review to resolve them. An in-depth review should be seen as a standard procedure in the diagnosis phase.

(10)    A procedure to monitor and correct adverse macroeconomic imbalances and vulnerabilities, with preventive and corrective elements, will require enhanced surveillance tools based on those used in the multilateral surveillance procedure. This should include enhanced surveillance missions and control of statistics by the Commission to Member States in liaison with the European Central Bank (ECB) when those missions concern participating Member States or Member States participating in the ERM II and additional reporting by the Member State in case of severe imbalances, including imbalances and vulnerabilites that jeopardise the proper functioning of the economic and monetary union. Since these missions should aim at getting a broad and balanced picture of the macroeconomic situation, social partners and other national stakeholders should be actively engaged in the dialogue.

(11)    When assessing imbalances, account should be taken of their severity, of the degree to which they may be considered unsustainable and of the potential negative economic and financial spillovers to other Member States. Particular attention should be paid to Member States with large current-account deficits and low competitiveness. The economic adjustment capacity and the track record of the Member State concerned as regards compliance with earlier recommendations issued under this Regulation and other recommendations issued under Article 121 TFEU as part of multilateral surveillance, in particular the broad guidelines for the economic policies of the Member States and of the Union, should also be considered.

(11a)  The assessment of imbalances should take into account the objectives of a Union strategy for growth and jobs and the need to use such a strategy as an instrument for sustainable internal cohesion, contributing to making the Union the most competitive economy in the world. The medium-term growth and primary balance targets of the "catching-up countries" should be taken into consideration.

(11b)  The structural reasons for imbalances risking undermining the financial stability of the Member State or having an impact on the economic and financial stability of the Union should be taken into account.

(11c)   The assessment of imbalances should take into account the objectives of balanced public finances in the medium-term perspective and the need to reduce the public debt and enhance economic growth.

(11d)  Measures proposed to a given Member State for correcting imbalances should take into account the objectives of a Union strategy for growth and jobs and the need to use such a strategy as an instrument for sustainable internal cohesion, contributing to making the Union the most competitive economy in the world. The medium-term growth and primary balance targets of the "catching-up countries" should be taken into consideration.

(12)    If macroeconomic imbalances or vulnerabilities are identified, recommendations should be addressed to the Member State concerned to provide guidance on appropriate policy responses. The policy response of the Member State concerned to imbalances and vulnerabilities should be timely and should use all available policy instruments under the control of public authorities and involve all relevant national stakeholders. It should be tailored to the specific environment and circumstances of the Member State concerned, be compatible with medium and long-term convergence and the targets included in a Union strategy for growth and jobs, upholding the internal market, fostering international trade links, increasing competitiveness, and also cover the main economic policy areas, potentially including fiscal and wage policies, labour markets, product and services markets and financial sector regulation. The recommendations should respect the Charter of Fundamental Rights of the European Union, Article 153 TFEU and collective bargaining between social partners in each Member State.

(12a)  In this respect the Council and the Commission should respect the role of the social partners, especially the right of collective bargaining, and may invite them to help promote appropriate actions to mitigate imbalances.

(13)    The early warnings and recommendations by the European Systemic Risk Board to Member States or the Union address risks of a macrofinancial nature. These should also warrant appropriate integration in the scoreboard and follow-up action by the Commission in the context of the surveillance of imbalances and vulnerabilities. The independence and confidentiality regime of the European Systemic Risk Board should be strictly respected.

(14)    If severe macroeconomic imbalances and vulnerabilities are identified, including imbalances and vulnerabilities that jeopardise the proper functioning of economic and monetary union, an excessive imbalance procedure should be initiated that may include issuing recommendations to the Member State, enhanced surveillance and monitoring requirements and in respect of Member States whose currency is the euro, the possibility of enforcement in accordance with Regulation (EU) No […/…] in the event of sustained failure to take corrective action.

(15)    Any Member State placed under the excessive imbalance procedure should establish a corrective action plan setting out details of its policies designed to implement the Council recommendations. The corrective action plan should reflect the nature of the imbalances, be restricted to policy aspects under the legitimate control of government authorities and should include a timetable for implementation of the measures envisaged. It should be endorsed by the Council on a report from the Commission and after consulting the European Parliament.

(15a)  The provisions of this Regulation are fully consistent with Article 3 of the Treaty on European Union and horizontal clauses of the TFEU, namely Articles 7, 8, 9, 10 and 11 TFEU, the Charter of Fundamental Rights as well as provisions of Protocol (No 26) on services of general interest annexed to the Treaties and Article 153(5) TFEU.

(15b)  In order to foster accountability and national ownership, the Council should convene and deliberate publicly when it discusses and adopts conclusions and recommendations on these important issues that affect the interests of the Union and its citizens.

(15c)   The power to adopt delegated acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of the scoreboard. In particular, delegated acts are necessary to establish a list of relevant indicators to be included in the scoreboard and to adapt the composition of the indicators, the thresholds and the methodology used. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level.

(16)    Since an effective framework for detection and prevention of macroeconomic imbalances and vulnerabilities cannot be sufficiently achieved by the Member States because of the deep trade and financial inter-linkages between Member States and the spillover effect of national economic policies on the Union and the euro area as a whole and can be better achieved at Union level, the Union may adopt measures in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in the same Article, this Regulation does not go beyond what is necessary to achieve those objectives,

(16a)   When the Council and the Commission apply this Regulation, they should fully respect the role of national parliaments and social partners and respect differences in national systems, such as the systems for wage formation. In particular, Articles 152 and 153 TFEU and Article 28 of the Charter of Fundamental Rights of the European Union should be taken into account. In accordance with Article 153(5) Article 153 shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs.

HAVE ADOPTED THIS REGULATION:

Chapter ISubject matter and definitions

Article 1Subject matter

This Regulation sets out detailed rules for the detection, prevention and correction of macroeconomic imbalances within the Union. It shall not affect the exercise of fundamental rights as recognised in the Member States and by Union law. Nor does it affect the right to negotiate, conclude and enforce collective agreements and to take industrial action in accordance with national law and practices which respect Union law.

Article 2Definitions

For the purposes of this Regulation:

(a)         ‘imbalances’ means any trend giving rise to macroeconomic developments which are adversely affecting, or have the potential adversely to affect, the proper functioning of the economy of a Member State or of economic and monetary union, or of the Union as a whole;

(b)         ‘excessive imbalances’ means severe imbalances, including imbalances that jeopardise the proper functioning of economic and monetary union.

Chapter II

Detection of imbalances and vulnerabilities

Article 3Scoreboard

1. The Commission shall, after consultation with Member States and the European Parliament, establish an indicative scoreboard as a tool to facilitate early identification and monitoring of imbalances.

2. The scoreboard, made up of an array of relevant and recognized statistical macroeconomic and structural indicators, shall allow for comparisons between Member States and reflect short-term, structural and medium-long term trends. The Commission shall set indicative lower and upper thresholds that shall be symmetric when appropriate, for these indicators to serve as alert levels. The scoreboard of indicators, and in particular alert thresholds, shall be differentiated for Member States whose currency is the euro and Member States whose currency is not the euro if justified by specific features of the economic and monetary union and relevant economic circumstances. The indicators and thresholds shall reflect the convergence process among Member States. The crossing of either lower or upper thresholds shall only trigger, if appropriate, a stricter surveillance through an in-depth review.

2a. The work of the European Systemic Risk Board shall be taken into due consideration in the drafting of indicators relevant to financial market stability.

2b. The European Systemic Risk Board shall be consulted in regard to draft indicators, relevant to financial market stability.

3a. The Social Protection Committee shall be consulted in regard to indicators relevant to labour markets and social issues in accordance with Article 154(2) and Article 160 TFEU respectively.

3b. The Commission shall adopt delegated acts in accordance with Article -12b setting the list of relevant indicators to be included in the scoreboard. The list of indicators is to include but not be limited to the following sets of indicators:

(a) internal imbalances, including private and public debt, wage level and unit profit rates as well as labour, resource and capital productivity indicators; public and private expenditure on research and development; unemployment rates and its development, asset price developments (namely, real estate and financial markets);

(b) external imbalances, including: real GDP growth rates, a rolling average of five-year comparative real growth; current account balance, with particular attention to its energy component; net foreign direct investment position; the evolution of export market shares intra and extra-EU.

4. The Commission shall regularly assess the appropriateness of the scoreboard, including the composition of indicators, the thresholds set and the methodology used, and shall adopt delegated acts in accordance with Article -12b adapting it if necessary to preserve or enhance its capability to detect emerging imbalances and monitor their development. Changes in the underlying methodology and composition of the scoreboard and the associated thresholds shall be made public.

Article 4Alert mechanism

1. The Commission shall update the values for the indicators on the scoreboard at least on a yearly basis, before each budgetary planning period for each Member State. The updated scoreboard shall be made public.

2. The release of the updated values of the indicators in the scoreboard shall be accompanied by a Commission report containing a sound economic and financial assessment including an assessment of the evolution of macroeconomic imbalances within the Union and putting the indicators into perspective. Best practices shall be taken into account. The report shall also indicate whether the crossing of lower or upper thresholds in one or more Member States signifies the possible emergence of imbalances inside the Member State concerned, in another Member State or across the Union as a whole. All the available information shall be taken into account and conclusions shall not be drawn from the scoreboard based on the indicators alone.

3. The report shall identify Member States that the Commission considers may be affected by, or may be at risk of being affected by macro-economic imbalances.

3a. The report shall be transmitted in a timely manner to the European Parliament and its competent committees and the European social partners.

4. As part of the multilateral surveillance in accordance with Article 121(3) TFEU, the Council shall discuss and adopt conclusions on the Commission report. The competent committee of the European Parliament may organise public debates on the Commission report. The Euro Group shall discuss the report as far as it relates, directly or indirectly, to Member States whose currency is the euro. The Council may reject the report by a qualified majority within 10 days. Excessive imbalance shall also trigger, where appropriate, the involvement of the European Systemic Risk Board and/or the relevant European Supervisory Authority.

4a. The report referred to in paragraph 2 shall form an integral part of, and shall be fully coherent with, the procedures, analyses and recommendations carried out in the context of the European semester for economic policy coordination described in Section 1-A of Regulation (EC) No 1466/97 (Semester).

4b. If an emergency situation arises, the procedure set out in paragraphs 1 to 4a shall be adapted as appropriate and shall be duly addressed in the subsequent report referred to in paragraph 2.

Article 5In-depth review

1. Taking account of the discussions in the European Parliament, the Council and the Euro Group, as provided for in Article 4(4), the Commission shall prepare an in-depth review for each Member State it considers may be affected by, or may be at risk of being affected by imbalances. This assessment shall constitute a standard procedure. It shall include an evaluation of whether the Member States in question are affected by imbalances, ▌whether these imbalances constitute excessive imbalances, how severe they are and the interconnections between Member States. The in-depth review shall build on detailed investigations of Member-State-specific circumstances, in particular the different starting positions across Member States; it shall study a broad range of economic variables and acknowledge the national specificities regarding industrial relations and social dialogue. The review shall be undertaken in conjunction with surveillance missions to the Member State concerned in liaison with the ECB when the Member State concerned is a Member State whose currency is the euro or participating in ERM II in accordance with Article -12.

2. The in-depth review shall be made public. It shall take into account, in particular:

(a)         as appropriate, ▌the ▌recommendations or invitations adopted in accordance with Articles 121, 126 and 148 TFEU and under Articles 6, 7, 8 and 10 of this Regulation, and the consequences of such recommendations;

(aa)       the origin of the detected imbalances, including the deep trade and financial inter-linkages between Member States, the spill-over effects of national economic policies and the asymmetric impact of Union and euro area policies;

(ab)       exceptional economic circumstances that may cause or aggravate such imbalances;

(b)         the policy intentions of the Member State under review, as reflected in its Stability or Convergence Programme and National Reform Programme;

(ba)        indicators related to the Union strategy for growth and jobs. These indicators shall focus on employment (including long term and youth unemployment), innovation, education, social inclusion, climate and energy;

(c)         any ▌warnings or recommendations from the European Systemic Risk Board on systemic risks addressed or being relevant to the Member State under review. The confidentiality regime of the European Systemic Risk Board shall be respected.

2a. In normal circumstances, the results of the in-depth review shall be presented to the European Parliament and the Council in the context of the Semester.

Article 6Preventive action

1. If, on the basis of its in-depth review referred to in Article 5 of this Regulation, the Commission considers that a Member State is experiencing imbalances, it shall inform the European Parliament and the Council accordingly and if the imbalances are related to developments in another Member State, also the latter Member State. The Council, on a recommendation from the Commission, may address the necessary recommendations to the Member State concerned, in accordance with the procedure set out in Article 121(2) TFEU. The recommendation by the Commission shall be deemed adopted by the Council unless it decides, by qualified majority to reject the recommendation within ten days of the Commission adopting it.

2. The Council shall inform the European Parliament of its recommendations. The Council recommendations shall be made public.

2a. The recommendations of the Council and the Commission shall not encroach upon fields such as wage formation which explicitly fall outside the Union’s remit. The Council and the Commission shall assign the utmost importance to national labour market practices and traditions that should be decisive in determining all recommendations which have a bearing on the responsibilities of the social partners or their special position in the social dialogue.

3. The Council, on the basis of a Commission proposal, shall review these recommendations at least on a yearly basis, before each budgetary planning period and may amend them if appropriate in accordance with paragraph 1.

CHAPTER IIIExcessive imbalance procedure

Article 7Opening of the excessive imbalance procedure

1. If, on the basis of the in-depth review referred to in Article 5, the Commission considers that the Member State concerned is affected by excessive imbalances, it shall inform the European Parliament and the Council accordingly. If the imbalances are related to economic or financial development in another Member State, the latter Member State shall equally be informed. The Commission shall also inform the relevant European Supervisory Authorities and the European Systemic Risk Board, which shall take the necessary steps.

2. The Council, on a recommendation from the Commission, and taking account of the public debate in the European Parliament, may adopt recommendations in accordance with Article 121(4) TFEU declaring the existence of an excessive imbalance and recommending the Member State concerned to take corrective action. The recommendation by the Commission shall be deemed adopted by the Council unless it decides by qualified majority to reject the recommendation within ten days of the Commission adopting it. The Member State concerned may request that an extraordinary meeting of the Council be convened to take a vote on the decision.

The recommendations shall set out the nature of the imbalances and specify a set of policy recommendations to be followed and the deadline within which the Member States concerned must submit a corrective action plan. The Council may, as provided for in Article 121(4) TFEU, make its recommendations public.

Article 8Corrective action plan

1. Any Member State for which an excessive imbalance procedure is opened shall submit a corrective action plan to the Council and the Commission based on, and within a deadline to be defined in the recommendations in accordance with Article 7, but at most within two months after the adoption of the recommendation. The corrective action plan shall set out the specific and concrete policy actions the Member State concerned has implemented or intends to implement and shall include a timetable for implementation thereof. The correction action plan shall take into account the social impact of these policy actions and shall be consistent with the Broad Economic Policy Guidelines and the Employment Guidelines.

1a. The corrective action plan shall be coherent with the Stability and Growth Pact, the Stability and Convergence Programmes, the National Reform Programmes and the medium and long-term objectives, namely convergence and a Union strategy for growth and jobs.

2. Within two months after submission of a corrective action plan and on the basis of a Commission report, the Council shall assess the corrective action plan. If considered sufficient, on the basis of a Commission proposal, the Council shall endorse it through a recommendation that lists the required specific actions and the deadlines for taking them and establish a timetable for surveillance paying due attention to the transmission channels and recognising that there may be long lags between the adoption of the corrective action and the actual resolution of imbalances.

If the actions taken or envisaged in the corrective action plan or their timetable for implementation are considered insufficient to implement the recommendations, the Council shall, on the basis of a Commission proposal, adopt a recommendation to the Member State to submit a new corrective action plan within two months as a rule. The new corrective action plan shall be examined according to the procedure laid down in this paragraph.

The proposals by the Commission shall be deemed adopted by the Council unless it decides, by qualified majority, to reject them within ten days of the Commission adopting them. The Member State concerned may request that an extraordinary meeting of the Council be convened to take a vote on the decision.

3. The corrective action plan, the Commission report and the Council invitation referred to in paragraph 2 shall be made public.

Article 9Monitoring of corrective action

1. The Commission shall monitor implementation of the ▌corrective action plan by the Member State concerned. For this purpose, the Member State shall report to the Council and the Commission at regular intervals in the form of progress reports whose frequency shall be established by the Council in the recommendation referred to in Article 7(2).

Following the progress report by the Member State, the President of the Euro Group and the Commissioner responsible shall report to the European Parliament.

2. Member States’ progress reports shall be made public by the Council.

3. The Commission shall carry out surveillance missions to the Member State concerned to monitor implementation of the corrective action plan, in liaison with the ECB when those missions concern Member States whose currency is the euro or Member States participating in ERM II. The aim of these missions is getting a broad and balanced picture of the macroeconomic situation. Social partners and other national stakeholders shall therefore, where appropriate, be actively engaged in the dialogue.

4. In the event of relevant major changes in economic circumstances for reasons outside the control of a Member State, the Council, on a recommendation from the Commission, may amend the recommendations adopted under Article 7 in accordance with the procedure laid down in the same Article. The Member State concerned shall submit a revised corrective action plan that shall be assessed in accordance with the procedure laid down in Article 8.

Article 10Assessment of corrective action

1. On the basis of a Commission report, the Council shall assess whether or not the Member State concerned has taken the recommended corrective action in accordance with the recommendation issued under Article 8(2).

1a. By means of Article 121(3) TFEU, an additional report by the Commission shall be elaborated where an assessment is made on whether macroeconomic imbalances within the Union have narrowed or not, taking into account some Union-wide aspects like Union demand, markets opportunities, credit conditions, fiscal space to invest, financial support for catching-up regions, etc. The report by the Commission shall be deemed adopted by the Council unless it decides by qualified majority to reject the recommendation within ten days of the Commission adopting it.

2. The Commission’s report shall be made public.

3. The Council ▌shall make its assessment by the deadline set by the Council in its recommendations adopted in accordance with Article 8(2), which shall be made public.

4. Where it considers that the Member State has not taken the recommended corrective action, the Council, on a proposal from the Commission, shall adopt ▌a recommendation, declaring non-compliance and setting a new deadline for corrective action ▌. The Commission shall give the Member State the opportunity to give an explanation for the non-compliance within 10 days. When making its recommendation the Commission shall take the Member State's explanation into account. The recommendation by the Commission shall be deemed adopted by the Council unless it decides, by qualified majority to reject the recommendation within ten days of the Commission adopting it. The Member State concerned may request that an extraordinary meeting of the Council be convened to take a vote on the decision.

4a. Pursuant to a recommendation from the Commission under paragraph 4, the Council shall adopt revised recommendations in accordance with Article 7, setting a further deadline for corrective action subject to a further assessment in accordance with this Article.

5. Where the Council, upon a recommendation from the Commission, concludes that the Member State has taken the recommended corrective action, the excessive imbalance procedure shall be held in abeyance. The monitoring shall continue in accordance with the timetable adopted in the recommendations under Article 8(2). The Council shall make public its reasons for placing the procedure in a position of abeyance recognising the corrective policy actions taken by the Member State. The recommendation by the Commission shall be deemed adopted by the Council unless it decides by qualified majority to reject the recommendation within ten days of the Commission adopting it.

5a. Where the Council, upon a recommendation from the Commission pursuant to Article 10(4) or Article 8(2), concludes that the Member State has not taken the recommended corrective action, the Council decision shall be enforceable in accordance with Regulation (EU) No .../2011.

6. The state of abeyance of the procedure for Member States concerned shall be reviewed regularly by the Council in accordance with the procedure set out in paragraphs (1) to (5).

Article 11Closing of the excessive imbalance procedure

The excessive imbalance procedure shall be closed once the Council, on a recommendation from the Commission, concludes that the Member State is no longer affected by excessive imbalances within the meaning of Article 2(b).

CHAPTER IVFinal provisions

Article 11a

Meeting between Parliaments

Whenever there is an invitation to a meeting between the competent committee of the European Parliament and a Member State to explain a position, required action or divergence from the requirements herein the meeting shall be convened under the auspices of one of:

(a) the European Parliament

(b) the Member State Parliament or

(c) the Rotating Presidency Parliament.

Article -12

Dialogue and surveillance visits

1. The Commission shall ensure a permanent dialogue with the authorities of the Member States in accordance with the objectives of this Regulation. To that end, the Commission shall carry out, in all Member States, visits for the purpose of regular dialogue and, where appropriate, surveillance.

2. When organising dialogue or surveillance visits, the Commission shall, if appropriate, transmit its provisional findings to the Member States concerned for comments.

3. The Commission shall, in the context of dialogue visits, review the actual economic situation in the Member State and identify risks or potential difficulties in complying with the objectives of this Regulation.

4. The Commission shall, in the context of surveillance visits, monitor the processes and verify that measures have been taken in accordance with decisions of the Council or the Commission in accordance with the objectives of this Regulation.

Surveillance visits shall be undertaken wherever recommendations have been issued. The Commission may invite representatives of the ECB or other relevant institutions to take part in surveillance visits.

5. The Commission shall regularly inform the Economic and Financial Committee of the findings of the dialogue and surveillance visits.

6. Member States shall take all necessary measures to facilitate dialogue and surveillance visits. Member States shall provide, at the request of the Commission and on a voluntary basis, the assistance of all the relevant national authorities for the preparation for and conduct of dialogue and surveillance visits.

Article -12a

Dialogue on macro-economic imbalances and budgetary surveillance

In order to enhance the dialogue between the Union institutions, in particular the European Parliament, the Council and the Commission on the one hand, and the national parliaments, national governments and other relevant bodies of the Member States on the other, and to ensure greater transparency and accountability, the competent committee of the European Parliament may organise public debates on macro-economic and budgetary surveillance undertaken by the Council and the Commission.

Article -12bExercise of the delegation

1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.

2. The delegation of power referred to in Article 3(3b) and (4) shall be conferred on the Commission for a period of four years from ….(4)*. The Commission shall draw up a report in respect of the delegation of power not later than six months before the end of the four-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period.

3. The delegation of power referred to in Article 3(3b) and (4) may be revoked at any time by the European Parliament or by the Council. A decision of revocation shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.

4. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

5. A delegated act adopted pursuant to Article 3(3b) and (4) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of three months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by three months at the initiative of the European Parliament or the Council.

Article -12c

Review

1. By ... (5)** and every three years thereafter, the Commission shall publish a report on the application of this Regulation.

That report shall evaluate, inter alia:

(a) whether the indicators and thresholds of the scoreboard have managed to detect emerging imbalances and to monitor their development;

(b) the progress of effective coordination of economic policies in accordance with the TFEU.

2. The report and any accompanying proposals shall be forwarded to the European Parliament and the Council.

Article 12Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Article 12a

Report

1. Every year thereafter, the Commission shall publish a report on the application of this Regulation and present it to the European Parliament.

2. The report and any accompanying proposals shall be forwarded to the European Parliament and the Council in the context of the Semester.

Done at

For the European Parliament                           For the Council

The President                                                 The President

(1)

         Not yet published in the Official Journal.

(2)

* Amendments: new or amended text is highlighted in bold italics; deletions are indicated by the symbol ▌.

(3)

          OJ C , , p. .

(4)

*          OJ please insert date: date of entry into force of this Regulation.

(5)

**         OJ please insert date: xxx years after the date of entry into force of this Regulation.


EXPLANATORY STATEMENT

- The six rapporteurs will deal with the six legislative proposals on economic governance as adopted by the Commission on 29 September 2010 with a deep sense of responsibility, and the aim to guarantee coherence of all legislative texts. This package is of major importance for the future of the EU and, in particular, of the euro area. The Parliament intends to improve the Commission proposals in order to establish a robust and coherent framework for the next decades, guaranteeing compatibility between fiscal discipline and the economic growth and employment targets in the Union and across Member States. Only this condition will grant stability and sustainability to the Union and the Euro.

- This challenge takes place in a particularly difficult time for the Union and the Euro-area, faced with growth, employment and internal divergences tensions, seriously aggravated by a major international crisis, but this is also the right time to amend, complete and correct the existing model at the light of past and present evidence. This is the first time the Parliament is co-deciding with the Council on macroeconomic developments and fiscal discipline of the Union. The rapporteurs are aware that, according to these new powers given by the Lisbon Treaty, the Council needs the Parliaments' agreement in order to reach a final consensus.

- Strengthening economic governance must go hand in hand with reinforcing the democratic legitimacy of the decisions taken, requiring closer and timelier involvement not only of relevant stakeholders but, in particular, of national parliaments and the European Parliament throughout the process.

- The rapporteurs stress that the framework of the new European Economic Semester has to be included in the legal texts, and not only as a code of conduct endorsed by the Council; the Semester will have to be a major instrument to guarantee coherence between the Stability and Growth Pact, the Stability and Convergence Programmes, the National Reform Programmes and of all of them with the medium and long term objectives, namely convergence and a Union strategy for growth and jobs. The Stability and Growth Pact and the complete economic governance framework should support and be compatible with EU strategies for growth and jobs and with the aim to increase the competitiveness of all Member States and social stability in all regions of the Union.

- The prevention and correction of macroeconomic imbalances is a powerful instrument to address fragilities arising, namely, from medium and long term structural trends, from the enlarging divergences within the Union (and Euro area in particular) and the spill over effects of individual Member States’ policies. The complexity and novelty of this approach will require the construction of a scoreboard with limited but adequate set of indicators (to be agreed between Council and Parliament) and with the definition of upper and lower thresholds; the scoreboard shall not be interpreted automatically but rather to be complemented by thorough economic analysis and “in loco” dialogue and surveillance missions.

- Penalties shall punish fraud or unwillingness to act on agreed recommendations without acceptable justification and not the incapacity to achieve the proposed targets. The real effectiveness of all the penalties imposed to a country shall be assessed as well as their cumulative and pro-cyclical character, and their total amount shall be subject to a maximum cap. Paid fines shall be revenue of the Fund central to the Permanent Crisis Mechanism. Incentives shall be studied as a complement to sanctions and both should be internal to this Mechanism.

- The improved economic governance framework cannot be dissociated from enhanced financial market regulation and supervision (including macro-prudential supervision by the European Systemic Risk Board);

- Experience gained during the first decade of functioning of the Economic and Monetary Union shows a clear need for an improved economic governance framework, which should be build on a stronger national ownership of commonly agreed rules and policies, on a more robust surveillance system at the European level of national economic policies, the two elements embedded within a framework for sustainable, balanced growth of the Union as a whole. The rapporteurs favour therefore an extensive reform of the governance framework based on the Community (Union) method.


OPINION OF THE COMMITTEE ON LEGAL AFFAIRS ON THE LEGAL BASIS

Mrs Sharon Bowles

Chair

Committee on Economic and Monetary Affairs

BRUSSELS

Subject:           Opinion on the legal basis of the proposal for a regulation of the European Parliament and of the Council on the prevention and correction of macroeconomic imbalances (COM(2010)0527 – C7-0301/2010 – 2010/0281(COD))

Dear Mrs Bowles,

By letter of 4 March 2011 you asked the Committee on Legal Affairs pursuant to Rule 37(2) of the Rules of Procedure, to give its opinion on the appropriate legal basis of various proposals for legislation, on which amendments to change the legal basis have been tabled in your committee as the lead committee and/or in the Committee on Employment and Social Affairs.

The committee considered this question at its meeting of 12 April 2011.

The economic governance package aims at responding to the need for greater coordination and closer surveillance of economic policies in the Economic and Monetary Union.

The package consists of six proposals for legislation.

The proposals are analysed separately in the annex. For the sake of convenience, the committee's conclusions as to the appropriate legal basis in each case are set out below:

-Proposal for a Regulation of the Parliament and of the Council on the prevention and correction of macroeconomic imbalances ((COM (2010) 527, 2010/0281 (COD)).

The sole purpose of the proposal for a Regulation is to broaden the economic surveillance procedure, as allowed by Article 121(6) TFUE. This legal basis thus seems to be the appropriate one.

- Proposal for a Council Directive on requirements for budgetary frameworks of the Member States (COM (2010) 523 final, 2010/ 0277 (NLE))

The main purpose of this proposal is to encourage fiscal responsibility by setting minimum requirements for national frameworks and to ensure the effectiveness of the excessive deficit procedure. Therefore, the legal basis proposed by the Commission, namely the third subparagraph of Article 126(14) TFEU, seems to be appropriate.

-Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies ((COM (2010) 526, 2010/0280 (COD))

This proposal aims at securing strengthened coordination of Member States' economic policies. It therefore seems that Article 121(6) TFEU is the appropriate legal basis for this proposal.

- Proposal for a Council Regulation amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure (COM (2010) 522 final, 2010/0276 (CNS))

In view of the fact that the main objective of this proposal is to fix the detailed rules to be followed when applying the excessive deficit procedure, the sole appropriate legal basis is Article 126(14) TFEU.

- Proposal for a Regulation of the European Parliament and of the Council on the effective enforcement of budgetary surveillance in the euro area (COM (2010)0524, 2010/0278(COD))

It is considered that Article 121(6) in conjunction with Article 136 TFEU constitutes the appropriate legal basis.

- Proposal for a Regulation of the Parliament and of the Council on enforcement measures to correct excessive macroeconomic imbalances in the euro area ((COM 2010) 525, 2010/0279 (COD))

Considering the purpose of the proposal, which aims at reinforcing the effective correction of macroeconomic imbalances in the euro area, Article 121(6) in conjunction with Article 136 TFEU constitutes the appropriate legal basis.

At its meeting of 12 April 2011 the Committee on Legal Affairs decided on the above recommendations, unanimously(1).

Yours sincerely,

Klaus-Heiner Lehne

Annex

Annex

Subject: Legal basis of the proposal for a Regulation of the Parliament and of the Council on the prevention and the correction of macroeconomic imbalances ((COM (2010) 527, 2010/0281 (COD)).

The economic governance package consists of six proposals aimed at reinforcing the coordination and the surveillance of economic policies in the economic and monetary union (EMU) in the context of the Europe 2020 Strategy and the European semester, a new surveillance cycle which will bring together processes under the SGP (The Stability and Growth Pact(2)) and the Broad Economic Policy Guidelines.

These proposals come as a response to the weaknesses of the current system as revealed by the global economic and financial crisis. Two of the proposals in question are concerned with the excessive deficit procedure, each being based on Article 126(14) TFEU. The other four concern the multilateral surveillance procedure and are based on Article 121(6); two of them (COM (2010) 0524 and COM (2010) 0525) are based on Article 121(6) in combination with Article 136 TFEU.

The proposals follow two communications(3) of the Commission and an agreement of the European Council of June 2010 on the need to reinforce the coordination of the Member State’s economic policies. The economic governance package was submitted on 29 September 2010.

The proposal for a Regulation of the Parliament and of the Council on the prevention and the correction of macroeconomic imbalances (hereinafter the proposal) complements the multilateral surveillance procedure provided for under the Europe 2020 Strategy by introducing a completely new element, the "excessive imbalance procedure". According to the Explanatory Memorandum, this proposal "sets out to provide a framework for identifying and addressing macroeconomic imbalances"(4). The proposal should be analysed with the Regulation on enforcement measures to correct macroeconomic imbalances; the two acts comprise the fully-fledged mechanism on the prevention and correction of macroeconomic imbalances.

Amendments tabled by the lead Committee (ECON) and the Committee on Employment and Social Affairs seek to change the legal basis, from a single basis of Article 121(6) to a multiple basis of Article 121(6) and Article 148(3) and (4) or of Article 121(6) in combination with Article 136.

Background

As the Commission emphasises in the Explanatory Memorandum(5), the EU needs a stronger economic surveillance, which should cover all relevant economic areas. Thus, "macroeconomic imbalances should be looked at jointly with fiscal policy and growth-enhancing reforms". One could identify a trend characterised, on the one hand, by the broadening of the economic surveillance beyond budgetary surveillance in order to prevent excessive macroeconomic imbalances and, on the other hand, by the deepening of the fiscal surveillance.

The mechanism for the prevention and the correction of macroeconomic imbalances is made up of two sets of draft proposals.

The first set of measures is contained in the proposal for a regulation on the excessive imbalance procedure (EIP), which sets out to provide a framework for identifying and addressing macroeconomic imbalances. It comprises a regular assessment of risks of imbalances permitting to address macroeconomic imbalances, coupled with rules allowing corrective actions.

The second draft proposal focuses on the enforcement of measures to correct excessive macroeconomic imbalances. It concerns only euro-area Member States and constitutes an incentive for Member States to address macroeconomic imbalances at an early stage and to ensure appropriate corrective measures where necessary.

The proposed legal bases

Article 121(6)

6. The European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, may adopt detailed rules for the multilateral surveillance procedure referred to in paragraphs 3 and 4(6).

Article 121(3)

In order to ensure closer coordination of economic policies and sustained convergence of the economic performances of the Member States, the Council shall, on the basis of reports submitted by the Commission, monitor economic developments in each of the Member States and in the Union as well as the consistency of economic policies with the broad guidelines referred to in paragraph 2, and regularly carry out an overall assessment. For the purpose of this multilateral surveillance, Member States shall forward information to the Commission about important measures taken by them in the field of their economic policy and such other information as they deem necessary.

Article 148(3) and (4)

3. Each Member State shall provide the Council and the Commission with an annual report on the principal measures taken to implement its employment policy in the light of the guidelines for employment as referred to in paragraph 2.

4. The Council, on the basis of the reports referred to in paragraph 3 and having received the views of the Employment Committee, shall each year carry out an examination of the implementation of the employment policies of the Member States in the light of the guidelines for employment. The Council, on a recommendation from the Commission, may, if it considers it appropriate in the light of that examination, make recommendations to Member States.

Article 136

1. n order to ensure the proper functioning of economic and monetary union, and in accordance with the relevant provisions of the Treaties, the Council shall, in accordance with the relevant procedure from among those referred to in Articles 121 and 126, with the exception of the procedure set out in Article 126(14), adopt measures specific to those Member States whose currency is the euro:

(a)    to strengthen the coordination and surveillance of their budgetary discipline;

(b)    to set out economic policy guidelines for them, while ensuring that they are compatible with those adopted for the whole of the Union and are kept under surveillance.

2. or those measures set out in paragraph 1, only members of the Council representing Member States whose currency is the euro shall take part in the vote.

A qualified majority of the said members shall be defined in accordance with Article 238(3) (a).

Approach of the Court of Justice

It is settled case-law that, in principle, a measure is to be founded on only one legal basis. If examination of the aim and the content of a Union measure reveals that it pursues a twofold purpose or that it has a twofold component, falling within the scope of different bases, and if one is identifiable as the main or predominant purpose or component, whereas the other is merely incidental, the measure must be based on a single basis, namely that required by the main or predominant purpose or component.(7)

Only if, exceptionally, it is established that the measure simultaneously pursues a number of objectives or has several components that are indissociably linked, without one being secondary and indirect in relation to the other, will that measure have to be founded on the various corresponding legal bases(8).

Analysis of the legal bases proposed

According to recital 3, the objective of the proposal in question is to broaden the economic surveillance of the Member States in order "to prevent excessive macroeconomic imbalances and help the Member States affected devise corrective plans before divergences become entrenched". To achieve this purpose, it sets out provisions for detection (Chapter II, Articles 3-5), prevention (Chapter II, Article 6) and correction of macroeconomic imbalances (Chapter III, Articles 7-11).

The proposed regulation comprises a regular assessment of the risks of imbalances based on a scoreboard of indicators and carrying out in-depth country analyses. When necessary, country-specific recommendations could be addressed by the Council to a Member State where imbalances (or a risk thereof) exist. Further, the Council may note the existence of severe imbalances or imbalances that put at risk the EMU. In this case, an excessive imbalance procedure (EIP) is opened; the Council may recommend to the Member State concerned to take corrective action within a specified deadline and to present a corrective action plan.

In the light of the above considerations, it appears that the sole purpose of the proposed regulation is to broaden the economic surveillance procedure, as allowed by Article 121(6) TFUE. The legal basis of the proposal seems thus to be the right one.

Furthermore it appears unnecessary to add any of the additional articles referred to in amendments tabled in the responsible committees.

First, given that Article 121(6) already refers to paragraph 3, it is unnecessary to add Article 121(3) as an extra legal basis.

Secondly, Article 148 is part of Title IX, concerning employment. That provision allows the Council, on a proposal from the Commission and after consulting the European Parliament, to adopt guidelines which Member States are obliged to take into account in their employment policies. Article 148(3) and (4) allow the Council to examine "the implementation of the employment policies of the Member States in the light of the guidelines for employment" and to make recommendations to Member States. Those provisions do not constitute a legal basis for the adoption of legislation stricto sensu.

Article 148, paragraphs 3 and 4, could not therefore constitute an adequate legal basis for the proposed regulation, whose acknowledged objective is in any event to broaden economic surveillance.

Thirdly, no element of the proposed act justifies the addition of Article 136 TFEU as a legal basis.

Conclusion

In the light of the above considerations it seems that Article 121(6) TFEU is the appropriate legal basis for this proposal.

(1)

The following were present for the final vote: Klaus-Heiner Lehne (Chair), Evelyn Regner (Vice-Chair), Piotr Borys, Sergio Gaetano Cofferati, Christian Engström, Lidia Joanna Geringer de Oedenberg, Sajjad Karim, Kurt Lechner, Eva Lichtenberger, Antonio López-Istúriz White, Arlene McCarthy, Antonio Masip Hidalgo, Alajos Mészáros, Angelika Niebler, Bernhard Rapkay, Alexandra Thein, Diana Wallis, Rainer Wieland, Cecilia Wikström, Tadeusz Zwiefka

(2)

The SGP consists of Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies, Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure and the Resolution of the European Council of 17 June 1997 on the Stability and Growth Pact.

(3)

Reinforcing economic policy coordination of 12 May 2010; Enhancing economic policy coordination for stability, growth and jobs - Tools for stronger EU governance of 30 June 2010.

(4)

Explanatory Memorandum. Proposal for a Regulation of the Parliament and of the Council on the prevention and the correction of macroeconomic imbalances ((COM 2010) 527, 2010/0281 (COD)).

(5)

Ibid.

(6)

Article 121(4) Where it is established, under the procedure referred to in paragraph 3, that the economic policies of a Member State are not consistent with the broad guidelines referred to in paragraph 2 or that they risk jeopardising the proper functioning of economic and monetary union, the Commission may address a warning to the Member State concerned. The Council, on a recommendation from the Commission, may address the necessary recommendations to the Member State concerned. The Council may, on a proposal from the Commission, decide to make its recommendations public.

Within the scope of this paragraph, the Council shall act without taking into account the vote of the member of the Council representing the Member State concerned.

A qualified majority of the other members of the Council shall be defined in accordance with Article 238(3)(a).

(7)

Case- 91/05 Commission v. Council [2008] ECR I- 3651.

(8)

Case C-338/01 Commission v. Council [2004] ECR I- 4829.


OPINION of the Committee on Employment and Social Affairs (23.3.2011)

for the Committee on Economic and Monetary Affairs

on the proposal for a regulation of the European Parliament and of the Council on the prevention and correction of macroeconomic imbalances

(COM(2010)0527 – C7-0301/2010 – 2010/0281(COD))

Rapporteur: Pervenche Berès

SHORT JUSTIFICATION

Background

On 29 September 2010, the Commission presented a legislative package aimed at reinforcing the economic governance in the EU and the euro area. The package is made up of six proposals: four of them deal with fiscal issues, including a reform of the Stability and Growth Pact (SGP), while two new regulations aim at detecting and addressing emerging macroeconomic imbalances within the EU and the euro area.

In the later two proposals, and with a view to broaden the EU’s economic surveillance to non-fiscal areas, the Commission proposes a series of new elements relating to the surveillance and correction of macroeconomic imbalances. The ‘preventive part’ of these elements comprises a regular assessment of the risks of imbalances based on a scoreboard of indicators and carrying out in-depth country analyses. When necessary, country-specific recommendations could be addressed by the Council to a Member State with severe imbalances or imbalances that put at risk the functioning of the EMU. Moreover, the ‘corrective part’ as presented in the proposal on "enforcement measures to correct excessive macroeconomic imbalances", envisages that euro area Member States which show insufficient compliance with their respective recommendations may become subject of an excessive deficit procedure and, ultimately, could face sanctions in the form of a yearly fine.

Observations

The Commission’s proposals contain many sound ideas. In general, your rapporteur shares the Commission’s view that it is necessary to develop a new structured procedure for prevention and correction of adverse macroeconomic imbalances in every Member State. Your rapporteur recalls that the Commission's EMU@10 communication already pointed to the increase of divergences between Member States before the crisis and that the European Parliament resolution on EMU@10 thoroughly addressed this point. A mechanism to monitor and prevent such divergences and imbalances is thus more than welcome. However, your rapporteur considers that a number of modifications are necessary in order to ensure that imbalances and divergences between Member States are detected, prevented or ultimately corrected in an efficient manner. Your rapporteur therefore introduces a series of amendments to the Commission proposals on "prevention and correction of macroeconomic imbalances" and on "enforcement measures to correct excessive macroeconomic imbalances in the euro area", addressing the following main aspects:

- The EU’s surveillance framework should include employment and social aspects, in addition to those of general economic and financial nature. Article 148 of the Treaty on the Functioning of the European Union (TFEU)should therefore be added as a legal base in the preventive part of the surveillance framework, and the relevant Regulation should address the prevention and correction of macroeconomic as well as of social imbalances on an equal basis. This way, a more integrated economic and social approach will be ensured.

- Linked to the above, the instruments based on Article 148 TFEU, in particular the guidelines for the employment policies of the Member States should be taken into account when assessing imbalances, and supplemented with specific tools for detection and prevention of social imbalances. The Employment Committee (EMCO) and the Social Protection Committee (SPC) should thus be actively involved in all relevant surveillance procedures.

- The scoreboard of indicators to serve as a tool for early detection and monitoring of imbalances should be adopted and updated regularly by the Commission in the form of delegated acts in accordance with Article 290 TFEU. The main indicators should include relevant employment, unemployment, poverty and taxation aspects.

- The system of correction of imbalances should not only contribute to the budgetary discipline of the euro area Member States. Equally important, it should be designed in such a way so as to avoid the emergence of asymmetric shocks and to contribute also to sustainable growth and job creation. The system should thus work in support of achieving the EU’s growth and jobs objectives, such as those adopted under the Europe 2020 strategy.

- Furthermore, the correction system, including when it comes to the correction of excessive imbalances, should be composed not only of fines (sanctions) but also incentives. Any decision to impose a sanction or a fine on a Member State should be subject to a social impact assessment.

- Fines collected from the Member States which fail to comply with their respective recommendations should be used in support of the EU’s long term investment and job targets and not distributed only to the Member States that are not subject of any excessive procedure as the Commission proposes.

Finally, your rapporteur considers it of utmost importance that the role of the European Parliament be strengthened in the whole surveillance process. In addition, regular consultation of the social partners and a stronger involvement of National Parliaments are necessary preconditions of a credible and transparent surveillance framework.

AMENDMENTS

The Committee on Employment and Social Affairs calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1

Proposal for a regulation

Title

Text proposed by the Commission

Amendment

Proposal for a Regulation of the European Parliament and of the Council on the prevention and correction of macroeconomic imbalances

Proposal for a Regulation of the European Parliament and of the Council on the prevention and correction of macroeconomic and social imbalances

Justification

The new EU surveillance framework needs to encompass employment and social aspects, in addition to those of general economic and financial nature. The proposed regulation should therefore address both macroeconomic and social imbalances within the EU.

Amendment  2

Proposal for a regulation

Citation 1

Text proposed by the Commission

Amendment

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 121(6) thereof,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 121(6), in combination with Article 148(3) and (4), thereof,

Amendment  3

Proposal for a regulation

Recital 1 a (new)

Text proposed by the Commission

Amendment

(1a) In order to develop a coordinated strategy for employment, as provided for by the Treaty on the Functioning of the European Union (TFEU), Member States and the Union should work in compliance with the guiding principles of promoting a skilled, trained and adaptable workforce and labour markets responsive to economic change.

Amendment  4

Proposal for a regulation

Recital 1 b (new)

Text proposed by the Commission

Amendment

(1b) The internal market, as provided for by the TFEU, should work for the sustainable development of the Union based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social cohesion, and a high level of protection and improvement of the quality of the environment.

Amendment  5

Proposal for a regulation

Recital 1 c (new)

Text proposed by the Commission

Amendment

(1c) The TFEU provides that in defining and implementing its policies and activities, the Union should take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection and the fight against social exclusion.

Amendment  6

Proposal for a regulation

Recital 1 d (new)

Text proposed by the Commission

Amendment

(1d) The European Council, meeting on 17 June 2010, adopted a new strategy for jobs and growth to enable the Union to emerge stronger from the crisis, and to turn its economy towards smart, sustainable and inclusive growth, accompanied by high level employment, productivity and social cohesion. The European Council also decided to launch, on 1 January 2011, the European semester for policy coordination to allow Member States to benefit from early coordination at Union level and to enable enhanced surveillance and a simultaneous assessment of both budgetary measures and structural reforms, fostering growth and employment.

Amendment  7

Proposal for a regulation

Recital 2

Text proposed by the Commission

Amendment

(2) There is a need to build upon the experience gained during the first decade of functioning of economic and monetary union.

(2) There is a need to build upon the experience gained during the first decade of functioning of the economic and monetary union regarding macroeconomic and social imbalances.

Amendment  8

Proposal for a regulation

Recital 3

Text proposed by the Commission

Amendment

(3) In particular, surveillance of the economic policies of the Member States should be broadened beyond budgetary surveillance to prevent excessive macroeconomic imbalances and help the Member States affected devise corrective plans before divergences become entrenched. This broadening of the economic surveillance framework should go in parallel with deepening of fiscal surveillance.

(3) In particular, surveillance of the economic policies of the Member States should be broadened beyond budgetary surveillance to prevent excessive macroeconomic and social imbalances, help the Member States affected devise corrective plans before divergences become entrenched, promote mutually reinforcing development strategies and facilitate monitoring the progress towards the Union’s growth and jobs objectives. This broadening of the economic surveillance framework should go in parallel with deepening of fiscal surveillance.

Amendment  9

Proposal for a regulation

Recital 4

Text proposed by the Commission

Amendment

(4) To help address such imbalances, a procedure laid down in detail in legislation is necessary.

(4) To help address such imbalances, a more integrated economic and social approach and a procedure laid down in detail in legislation is necessary.

Amendment  10

Proposal for a regulation

Recital 4 a (new)

Text proposed by the Commission

Amendment

 

(4a) The measures adopted under this Regulation should be fully consistent with horizontal provisions of the TFEU, namely Articles 7, 8, 9, 10 and 11 TFEU, with Article 153(5) TFEU, and with the Protocol (No 26) on services of general interest annexed to the Treaty on European Union and to the TFEU.

Amendment  11

Proposal for a regulation

Recital 5

Text proposed by the Commission

Amendment

(5) It is appropriate to supplement the multilateral surveillance referred to in Article 121(3) and (4) of the Treaty with specific rules for detection, prevention and correction of macroeconomic imbalances.

(5) It is appropriate to complement the multilateral surveillance referred to in Article 121(3) and (4) TFEU with specific rules for detection, prevention and correction of macroeconomic imbalances that include incentives as well as fines.

Amendment  12

Proposal for a regulation

Recital 5 a (new)

Text proposed by the Commission

Amendment

(5a) It is also appropriate to complement the joint annual report referred to in Article 148 TFEU with specific tools for the detection and prevention of social imbalances.

Amendment  13

Proposal for a regulation

Recital 6

Text proposed by the Commission

Amendment

(6) This procedure should rely on an alert mechanism for early detection of emerging macroeconomic imbalances. It should be based on use of an indicative and transparent scoreboard combined with economic judgment.

(6) This procedure should rely on an alert mechanism for early detection of emerging macroeconomic and social imbalances. It should be based on use of an indicative and transparent scoreboard combined with economic and social judgment, particularly in relation to competitiveness, convergence and solidarity.

Amendment  14

Proposal for a regulation

Recital 6 a (new)

Text proposed by the Commission

Amendment

 

(6a) In order to enable the scoreboard to be used as a tool to facilitate early identification and monitoring of imbalances, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission to establish a list of relevant indicators to be included in the scoreboard and to adapt the composition of the indicators, the thresholds and the methodology used. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level and with social partners. The Commission, when preparing and drawing-up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and Council.

Amendment  15

Proposal for a regulation

Recital 7

Text proposed by the Commission

Amendment

(7) The scoreboard should consist of a limited set of economic and financial indicators relevant to detection of macroeconomic imbalances, with corresponding indicative thresholds. The composition of the scoreboard may evolve in time, inter alia due to evolving threats to macroeconomic stability or enhanced availability of relevant statistics.

(7) The scoreboard should consist of a limited set of real and nominal economic, social and financial indicators relevant to competitiveness and the detection of macroeconomic and social imbalances, with corresponding indicative thresholds. The composition of the scoreboard should be amended by way of delegated acts, if needed, inter alia due to evolving threats to macroeconomic and social stability or enhanced availability of relevant statistics.

Amendment  16

Proposal for a regulation

Recital 8

Text proposed by the Commission

Amendment

(8) The crossing of one or more indicative thresholds need not necessarily imply that macroeconomic imbalances are emerging, as economic policy-making should take into account inter-linkages between macroeconomic variables. Economic judgment should ensure that all pieces of information, whether from the scoreboard or not, are put in perspective and become part of a comprehensive analysis.

(8) The crossing of one or more indicative thresholds need not necessarily imply that macroeconomic or social imbalances are emerging, as economic policy-making should take into account inter-linkages between macroeconomic and social variables as well as the moment of a particular economy's economic cycle. Economic judgment should ensure that all pieces of information, whether from the scoreboard or not, are put in perspective and become part of a comprehensive analysis.

Amendment  17

Proposal for a regulation

Recital 9

Text proposed by the Commission

Amendment

(9) Based on the multilateral surveillance procedure and the alert mechanism, the Commission should identify the Member States to be subject to an in-depth review. The in-depth review should encompass a thorough analysis of sources of imbalances in the Member State under review. It should be discussed within the Council and the Euro Group for the Member States whose currency is the euro.

(9) Based on the multilateral surveillance procedure and the alert mechanism, the Commission should identify the Member States to be subject to an in-depth review. The in-depth review should encompass a thorough analysis of sources of internal and external imbalances in the Member State under review as well as in the euro area. It should be built on a detailed investigation of a broad range of economic variables and should acknowledge the national specificities regarding industrial relations and social dialogue. It should be discussed within the European Parliament, the Council and the Euro Group for the Member States whose currency is the euro.

Amendment  18

Proposal for a regulation

Recital 10

Text proposed by the Commission

Amendment

(10) A procedure to monitor and correct adverse macroeconomic imbalances, with preventive and corrective elements, will require enhanced surveillance tools based on those used in the multilateral surveillance procedure. This may include enhanced surveillance missions by the Commission to Member States and additional reporting by the Member State in case of severe imbalances, including imbalances that jeopardise the proper functioning of the economic and monetary union.

(10) A procedure to monitor and correct adverse macroeconomic and social imbalances, with preventive and corrective elements, will require enhanced surveillance tools based on those used in the multilateral surveillance procedure and analysing the impact of employment on the macro-economic situation based on the Joint Assessment Framework including the Employment Performance Monitor. This may include enhanced surveillance missions by the Commission to Member States and additional reporting by the Member State in case of severe imbalances, including imbalances that jeopardise the proper functioning of the economic and monetary union or social cohesion.

Amendment  19

Proposal for a regulation

Recital 11

Text proposed by the Commission

Amendment

(11) When assessing imbalances, account should be taken of their severity, of the degree to which they may be considered unsustainable and of the potential negative economic and financial spillovers to other Member States. The economic adjustment capacity and the track record of the Member State concerned as regards compliance with earlier recommendations issued under this Regulation and other recommendations issued under Article 121 of the Treaty as part of multilateral surveillance, in particular the broad guidelines for the economic policies of the Member States and of the Union, should also be considered.

(11) When assessing imbalances, account should be taken of their severity, of the degree to which they may be considered unsustainable and, in particular, of the potential negative economic, social and financial spillovers to other Member States. The structural or short-term nature of imbalances as well as the national, Union or external character of their causes needs to be understood. Inter-linkages between policy options by different Member States as well as spill-over effects should be adequately taken into account. The track record of the Member State concerned as regards compliance with earlier recommendations issued under this Regulation and other recommendations issued under Articles 121 and 148 TFEU as part of multilateral surveillance, in particular the broad guidelines for the economic policies of the Member States and of the Union and the guidelines for the employment policies of the Member States, as well as the consequences of such recommendations, should also be considered.

Amendment  20

Proposal for a regulation

Recital 12

Text proposed by the Commission

Amendment

(12) If macroeconomic imbalances are identified, recommendations should be addressed to the Member State concerned to provide guidance on appropriate policy responses. The policy response of the Member State concerned to imbalances should be timely and should use all available policy instruments under the control of public authorities. It should be tailored to the specific environment and circumstances of the Member State concerned and cover the main economic policy areas, potentially including fiscal and wage policies, labour markets, product and services markets and financial sector regulation.

(12) If macroeconomic and social imbalances are identified, recommendations should be addressed to the Member State concerned to provide guidance on appropriate policy responses. The policy response of the Member State concerned to imbalances should be timely and should use all relevant policy instruments under the control of public authorities. It should be based on a close dialogue with social partners and other national stakeholders and should fully take into account the restrictions that the fundamental rights of those actors place on government action. It should be tailored to the specific environment and circumstances of the Member State concerned and cover the main economic policy areas, potentially including fiscal and taxation policies, labour markets, product and services markets and financial sector regulation. It should be undertaken in respect of Article 9 TFEU, and with a view to promoting a high level of employment, the guarantee of adequate social protection and the fight against social exclusion.

Amendment  21

Proposal for a regulation

Recital 13

Text proposed by the Commission

Amendment

(13) The early warnings and recommendations by the European Systemic Risk Board to Member States or the Union address risks of a macrofinancial nature. These may also warrant appropriate follow-up action in the context of the surveillance of imbalances.

(13) The early warnings and recommendations by the European Systemic Risk Board to Member States or the Union address only risks of a macrofinancial nature. These may also warrant appropriate follow-up action in the context of the surveillance of imbalances.

Amendment  22

Proposal for a regulation

Recital 14

Text proposed by the Commission

Amendment

(14) If severe macroeconomic imbalances are identified, including imbalances that jeopardise the proper functioning of economic and monetary union, an excessive imbalance procedure should be initiated that may include issuing recommendations to the Member State, enhanced surveillance and monitoring requirements and in respect of Member States whose currency is the euro, the possibility of enforcement in accordance with Regulation (EU) No […/…] in the event of sustained failure to take corrective action.

(14) If severe macroeconomic and social imbalances are identified, including imbalances that jeopardise the proper functioning of economic and monetary union or social cohesion, an excessive imbalance procedure should be initiated that may include issuing recommendations to the Member State, enhanced surveillance and monitoring requirements and in respect of Member States whose currency is the euro, the possibility of enforcement in accordance with Regulation (EU) No […/…] in the event of sustained failure to take corrective action.

Amendment  23

Proposal for a regulation

Recital 15

Text proposed by the Commission

Amendment

(15) Any Member State placed under the excessive imbalance procedure should establish a corrective action plan setting out details of its policies designed to implement the Council recommendations. The corrective action plan should include a timetable for implementation of the measures envisaged. It should be endorsed by the Council on a report from the Commission.

(15) Any Member State placed under the excessive imbalance procedure should establish a corrective action plan setting out details of its policies designed to implement the Council recommendations. The corrective action plan should reflect the nature of the imbalances, be restricted to policy aspects under the legitimate control of government authorities and should include a timetable for implementation of the measures envisaged. It should be endorsed by the Council on a report from the Commission and after consulting the European Parliament.

Amendment  24

Proposal for a regulation

Recital 16

Text proposed by the Commission

Amendment

(16) Since an effective framework for detection and prevention of macroeconomic imbalances cannot be sufficiently achieved by the Member States because of the deep trade and financial inter-linkages between Member States and the spillover effect of national economic policies on the Union and the euro area as a whole and can be better achieved at Union level, the Union may adopt measures in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in the same Article, this Regulation does not go beyond what is necessary to achieve those objectives,

(16) Since an effective framework for detection and prevention of macroeconomic and social imbalances cannot be sufficiently achieved by the Member States because of the deep trade and financial inter-linkages between Member States and the spillover effect of national economic policies on the Union and the euro area as a whole and can be better achieved at Union level, the Union may adopt measures in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary to achieve those objectives,

Amendment  25

Proposal for a regulation

Article 1

Text proposed by the Commission

Amendment

This Regulation sets out detailed rules for the detection, prevention and correction of macroeconomic imbalances within the Union.

This Regulation sets out detailed rules for the detection, prevention and correction of macroeconomic and social imbalances within the Union.

Justification

The new EU surveillance framework needs to encompass employment and social aspects, in addition to those of general economic and financial nature. The proposed regulation should therefore address both macroeconomic and social imbalances within the EU.

Amendment  26

Proposal for a regulation

Article 2 – point a

Text proposed by the Commission

Amendment

(a) ‘imbalances’ means macroeconomic developments which are adversely affecting, or have the potential adversely to affect, the proper functioning of the economy of a Member State or of economic and monetary union, or of the Union as a whole.

(a) ‘imbalances’ means macroeconomic or social developments which are adversely affecting, or have the potential adversely to affect, the proper functioning of the economy, the competitiveness and convergence of, or the social cohesion in, a Member State, the euro area, or the Union as a whole.

Amendment  27

Proposal for a regulation

Article 2 – point b

Text proposed by the Commission

Amendment

(b) ‘excessive imbalances’ means severe imbalances, including imbalances that jeopardise the proper functioning of economic and monetary union.

(b) ‘excessive imbalances’ means severe imbalances, including imbalances that jeopardise the proper functioning of economic and monetary union or social cohesion.

Amendment  28

Proposal for a regulation

Article 3 – paragraph 1

Text proposed by the Commission

Amendment

1. The Commission shall, after consultation with Member States, establish an indicative scoreboard as a tool to facilitate early identification and monitoring of imbalances.

1. The Commission shall be empowered to adopt delegated acts, after consulting the social partners, in accordance with Article -12 in order to facilitate early identification and monitoring of imbalances by establishing a scoreboard comprising a list of indicators, which may be amended when deemed necessary in order to integrate new emerging imbalances and better assess competitiveness positions or excessive internal and external imbalances.

 

1a. The scoreboard shall include a list of indicators as set out in the Annex.

Amendment  29

Proposal for a regulation

Article 3 – paragraph 2

Text proposed by the Commission

Amendment

2. The scoreboard shall be made up of an array of macroeconomic and macrofinancial indicators for Member States. The Commission may set indicative lower or upper thresholds for these indicators to serve as alert levels. The thresholds applicable to Member States whose currency is the euro may be different from those applicable to the other Member States.

2. The scoreboard shall be made up of an array of indicators that are relevant for detecting the risk of potential macroeconomic, macrofinancial and social imbalances in Member States or among them. The Commission shall set indicative symmetric lower and upper thresholds for these indicators to serve as alert levels, taking into account the starting performance of Member States as well as the average position of the Union and the euro area and its evolution over time. The thresholds applicable to Member States whose currency is the euro may be different from those applicable to the other Member States.

Amendment  30

Proposal for a regulation

Article 3 – paragraph 4

Text proposed by the Commission

Amendment

4. The Commission shall regularly assess the appropriateness of the scoreboard, including the composition of indicators, the thresholds set and the methodology used, and shall adapt it if necessary to preserve or enhance its capability to detect emerging imbalances and monitor their development. Changes in the underlying methodology and composition of the scoreboard and the associated thresholds shall be made public.

4. The Commission shall regularly assess the appropriateness of the scoreboard, including the composition of indicators, the thresholds set and the methodology used, and shall be empowered to adopt delegated acts in accordance with Article -12 in order to adapt it if necessary to preserve or enhance its capability to detect emerging imbalances and monitor their development.

Amendment  31

Proposal for a regulation

Article 4 – paragraph 2

Text proposed by the Commission

Amendment

2. The release of the updated scoreboard shall be accompanied by a Commission report containing an economic and financial assessment putting the movement of the indicators into perspective, drawing if necessary on any other economic and financial indicator relevant to detection of imbalances. The report shall also indicate whether the crossing of lower or upper thresholds in one or more Member States signifies the possible emergence of imbalances.

2. The release of the updated scoreboard shall be accompanied by a Commission report containing a sound economic, social and financial assessment, notably of competitiveness and convergence, and putting the indicators into perspective, drawing if necessary on any other economic, social and financial or structural indicator relevant to detection of imbalances. Best practices shall be taken into account. The report shall also indicate whether the crossing of lower or upper thresholds in one or more Member States signifies the possible emergence of imbalances inside the Member State concerned, in another Member State or across the Union as a whole. All the available information shall be taken into account and conclusions shall not be drawn from the scoreboard based on the indicators alone.

Amendment  32

Proposal for a regulation

Article 4 – paragraph 4

Text proposed by the Commission

Amendment

4. As part of the multilateral surveillance in accordance with Article 121(3) of the Treaty, the Council shall discuss and adopt conclusions on the Commission report. The Euro Group shall discuss the report as far as it relates, directly or indirectly, to Member States whose currency is the euro.

4. As part of the multilateral surveillance in accordance with Article 121(3) TFEU and of the examination of the implementation of the employment policies in accordance with Article 148(4) TFEU, the Council shall discuss and adopt conclusions on the Commission report after consulting the Employment Committee and the social partners. The competent committee of the European Parliament may organise public debates on the Commission report. The Euro Group shall discuss the report as far as it relates, directly or indirectly, to Member States whose currency is the euro.

Amendment  33

Proposal for a regulation

Article 5 – paragraph 1

Text proposed by the Commission

Amendment

1. Taking account of the discussions in the Council and the Euro Group, as provided for in Article 4(4), the Commission shall prepare an in-depth review for each Member State it considers affected by, or at risk of, imbalances. This assessment shall include an evaluation of whether the Member State in question is affected by imbalances, and of whether these imbalances constitute excessive imbalances.

1. Taking account of the discussions in the Council and the Euro Group, as provided for in Article 4(4), the Commission shall prepare an in-depth review for each Member State it considers affected by, or at risk of, imbalances. This assessment shall include an evaluation of whether the Member State in question is affected by imbalances, and of whether these imbalances constitute excessive imbalances. The in-depth review shall be built on a detailed investigation of a broad range of economic variables and shall acknowledge the national specificities regarding industrial relations and social dialogue.

Amendment  34

Proposal for a regulation

Article 5 – paragraph 2 – point a

Text proposed by the Commission

Amendment

(a) as appropriate, whether the Member State under review has taken appropriate action in response to Council recommendations or invitations adopted in accordance with Articles 121 and 126 of the Treaty and under Articles 6, 7, 8 and 10 of this Regulation;

(a) as appropriate, whether the Member State under review has taken appropriate action in response to Council recommendations or invitations adopted in accordance with Articles 121, 126 and 148 TFEU and under Articles 6, 7, 8 and 10 of this Regulation, and the economic, social and other important consequences of such recommendations;

Amendment  35

Proposal for a regulation

Article 6 – paragraph 1

Text proposed by the Commission

Amendment

1. If, on the basis of its in-depth review referred to in Article 5 of this Regulation, the Commission considers that a Member State is experiencing imbalances, it shall inform the Council accordingly. The Council, on a recommendation from the Commission, may address the necessary recommendations to the Member State concerned, in accordance with the procedure set out in Article 121(2) of the Treaty.

1. If, on the basis of its in-depth review referred to in Article 5 of this Regulation, the Commission considers that a Member State is experiencing imbalances, it shall inform the European Parliament and the Council accordingly. The Council, on a recommendation from the Commission and after consulting the European Parliament, may address the necessary recommendations to the Member State concerned, in accordance with the procedure set out in Article 121(2) TFEU.

Amendment  36

Proposal for a regulation

Article 6 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. In normal circumstances, the results of the in-depth review shall be presented to the European Parliament and the Council in the context of the European semester for policy coordination.

Amendment  37

Proposal for a regulation

Article 6 – paragraph 2

Text proposed by the Commission

Amendment

2. The Council shall inform the European Parliament of its recommendations. The Council recommendations shall be made public.

2. The Council shall inform the national parliaments of its recommendations. The Council recommendations shall be made public.

Amendment  38

Proposal for a regulation

Article 6 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. The recommendations of the Council and the Commission shall not encroach upon fields such as wage formation which explicitly fall outside the Union’s remit. The Council and the Commission shall assign the utmost importance to national labour market practices and traditions that should be decisive in determining all recommendations which have a bearing on the responsibilities of the social partners or their special position in the social dialogue.

Amendment  39

Proposal for a regulation

Article 7 – paragraph 1

Text proposed by the Commission

Amendment

1. If, on the basis of the in-depth review referred to in Article 5, the Commission considers that the Member State concerned is affected by excessive imbalances, it shall inform the Council accordingly.

1. If, on the basis of the in-depth review referred to in Article 5, the Commission considers that the Member State concerned is affected by excessive imbalances, it shall inform the European Parliament and the Council accordingly.

Amendment  40

Proposal for a regulation

Article 7 – paragraph 2

Text proposed by the Commission

Amendment

2. The Council, on a recommendation from the Commission, may adopt recommendations in accordance with Article 121(4) of the Treaty declaring the existence of an excessive imbalance and recommending the Member State concerned to take corrective action. Those recommendations shall set out the nature of the imbalances and specify the corrective action to be taken in detail and the deadline within which the Member State concerned must take such corrective action. The Council may, as provided for in Article 121(4) of the Treaty, make its recommendations public.

2. The Council, on a recommendation from the Commission after consulting the European Parliament, may adopt recommendations in accordance with Article 121(4) TFEU declaring the existence of an excessive imbalance and recommending the Member State concerned to take corrective action. Those recommendations shall set out the nature of the imbalances and specify the corrective action to be taken in detail and the deadline within which the Member State concerned must take such corrective action. The Council may, as provided for in Article 121(4) TFEU, make its recommendations public.

Amendment  41

Proposal for a regulation

Article 8 – paragraph 1

Text proposed by the Commission

Amendment

1. Any Member State for which an excessive imbalance procedure is opened shall submit a corrective action plan to the Council and the Commission within a deadline to be defined in the recommendations in accordance with Article 7. The corrective action plan shall set out the specific and concrete policy actions the Member State concerned has implemented or intends to implement and shall include a timetable for implementation thereof.

1. Any Member State for which an excessive imbalance procedure is opened shall submit a corrective action plan to the Council and the Commission within a deadline to be defined in the recommendations in accordance with Article 7 TFEU. The corrective action plan shall make use of all relevant policy instruments under the control of public authorities, taking into account the fundamental rights of citizens, social partners and other national stakeholders. The corrective action plan shall set out the specific and concrete policy actions the Member State concerned has implemented or intends to implement and shall include a timetable for implementation thereof.

Amendment 42

Proposal for a regulation

Article 9 – paragraph 4

Text proposed by the Commission

Amendment

4. If economic circumstances change, the Council, on a recommendation from the Commission, may amend the recommendations adopted under Article 7 in accordance with the procedure laid down in the same Article. The Member State concerned shall submit a revised corrective action plan that shall be assessed in accordance with the procedure laid down in Article 8.

4. If economic circumstances change, the Council, on a recommendation from the Commission, after consulting the European Parliament, may amend the recommendations adopted under Article 7 in accordance with the procedure laid down in the same Article. The Member State concerned shall submit a revised corrective action plan that shall be assessed in accordance with the procedure laid down in Article 8.

Amendment  43

Proposal for a regulation

Article -12 (new)

Text proposed by the Commission

Amendment

Article -12

 

Exercise of the delegation

 

1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.

 

2. The delegation of power referred to in Article 3(1) and (4)shall be conferred on the Commission for a period of four years from ….*. The Commission shall draw up a report in respect of the delegation of power not later than nine months before the end of the four-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period.

 

3. The delegation of power referred to in Article 3(1) and (4) may be revoked at any time by the European Parliament or by the Council. A decision of revocation shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.

 

4. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

 

5. A delegated act adopted pursuant to Articles 3(1) and (4) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of three months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by three months at the initiative of the European Parliament or the Council.

 

_____

* Date of entry into force of this Regulation.

Amendment  44

Proposal for a regulation

Article -12 a (new)

Text proposed by the Commission

Amendment

 

Article -12a

 

Review

 

1. By ... * and every three years thereafter, the Commission shall publish a report on the application of this Regulation. That report shall evaluate, inter alia:

 

(a) whether the indicators and thresholds of the scoreboard have managed to detect emerging imbalances and to monitor their development;

 

(b) the progress of effective coordination of economic policies in accordance with the TFEU.

 

2. The report and any accompanying proposals shall be forwarded to the European Parliament and the Council.

 

______

* OJ please insert date: xxx years after the date of entry into force of this Regulation.

Amendment  45

Proposal for a regulation

Annex (new)

Text proposed by the Commission

Amendment

 

ANNEX

 

The list of indicators in the scoreboard referred to in Article 3 may include the following sets of indicators:

 

(1) product and services markets (inflation, current account balance, public and private R&D expenditure, housing, agriculture and energy prices evolution);

 

(2) capital markets (credit growth, public and private debt, public and private investment, FDI- net foreign asset positions);

 

(3) labour markets (employment and unemployment rate by gender and age groups, scale of wages and compensations, investment in education, poverty);

 

(4) taxation (rates of labour and capital taxation);

 

(5) fiscal, economic, social and environmental sustainability;

 

(6) aggregate demand and supply;

 

(7) internal income inequalities;

 

(8) the share of labour income in overall GDP and unit profit rates;

 

(i) asset and energy price developments;

 

(j) evolution of export market shares in Union and third-country markets; and net foreign assets positions;

 

(k) third-country foreign direct investment flows.

PROCEDURE

Title

Prevention and correction of macroeconomic imbalances

References

COM(2010)0527 – C7-0301/2010 – 2010/0281(COD)

Committee responsible

ECON

Opinion by

       Date announced in plenary

EMPL

21.10.2010

 

 

 

Rapporteur

       Date appointed

Pervenche Berès

21.10.2010

 

 

Discussed in committee

1.12.2010

25.1.2011

 

 

Date adopted

16.3.2011

 

 

 

Result of final vote

+:

–:

0:

36

2

8

Members present for the final vote

Regina Bastos, Edit Bauer, Jean-Luc Bennahmias, Pervenche Berès, Mara Bizzotto, Philippe Boulland, David Casa, Alejandro Cercas, Marije Cornelissen, Frédéric Daerden, Karima Delli, Proinsias De Rossa, Frank Engel, Sari Essayah, Richard Falbr, Ilda Figueiredo, Thomas Händel, Nadja Hirsch, Stephen Hughes, Liisa Jaakonsaari, Danuta Jazłowiecka, Martin Kastler, Ádám Kósa, Patrick Le Hyaric, Veronica Lope Fontagné, Olle Ludvigsson, Elizabeth Lynne, Thomas Mann, Elisabeth Morin-Chartier, Csaba Őry, Rovana Plumb, Konstantinos Poupakis, Sylvana Rapti, Licia Ronzulli, Elisabeth Schroedter, Jutta Steinruck, Traian Ungureanu

Substitute(s) present for the final vote

Georges Bach, Raffaele Baldassarre, Sven Giegold, Gesine Meissner, Antigoni Papadopoulou, Evelyn Regner

Substitute(s) under Rule 187(2) present for the final vote

Liam Aylward, Fiona Hall, Jacek Włosowicz


PROCEDURE

Title

Prevention and correction of macroeconomic imbalances

References

COM(2010)0527 – C7-0301/2010 – 2010/0281(COD)

Date submitted to Parliament

29.9.2010

Committee responsible

       Date announced in plenary

ECON

21.10.2010

Committee(s) asked for opinion(s)

       Date announced in plenary

BUDG

21.10.2010

EMPL

21.10.2010

 

 

Not delivering opinions

       Date of decision

BUDG

20.10.2010

 

 

 

Rapporteur(s)

       Date appointed

Elisa Ferreira

21.9.2010

 

 

Legal basis disputed

       Date of JURI opinion

JURI

12.4.2011

 

 

 

Discussed in committee

26.10.2010

24.1.2011

22.3.2011

 

Date adopted

19.4.2011

 

 

 

Result of final vote

+:

–:

0:

42

4

0

Members present for the final vote

Burkhard Balz, Udo Bullmann, Nikolaos Chountis, George Sabin Cutaş, Rachida Dati, Leonardo Domenici, Derk Jan Eppink, Diogo Feio, Markus Ferber, Elisa Ferreira, Vicky Ford, Ildikó Gáll-Pelcz, Jean-Paul Gauzès, Sven Giegold, Sylvie Goulard, Liem Hoang Ngoc, Gunnar Hökmark, Wolf Klinz, Jürgen Klute, Rodi Kratsa-Tsagaropoulou, Philippe Lamberts, Astrid Lulling, Arlene McCarthy, Íñigo Méndez de Vigo, Ivari Padar, Alfredo Pallone, Anni Podimata, Antolín Sánchez Presedo, Olle Schmidt, Edward Scicluna, Peter Simon, Theodor Dumitru Stolojan, Ivo Strejček, Kay Swinburne, Marianne Thyssen, Ramon Tremosa i Balcells, Corien Wortmann-Kool

Substitute(s) present for the final vote

Marta Andreasen, Herbert Dorfmann, Robert Goebbels, Carl Haglund, Krišjānis Kariņš, Barry Madlener, Claudio Morganti, Andreas Schwab

Substitute(s) under Rule 187(2) present for the final vote

Karima Delli, Monika Hohlmeier

Date tabled

6.5.2011

Last updated: 26 May 2011Legal notice