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09.05.02, 09:13
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The Economic and Monetary Affairs Commissioner Pedro Solbes’s proposal to
enhance the co-operation of economic policies in the Euro-Zone was rejected by
ministers. The details, which Member States received by letter in mid-April,
were discussed by the Eurogroup on Monday evening.

National Parliaments before Commission
The proposals which included the systematic analysis of the euro areas policy
mix, the issue of quality and sustainability in public finances and most
contentiously the need for common standards for conducting economic polices
were dismissed by the ministers. The most common reason was fear that budget
information would be leaked or that other member state could veto them. Hans
Eichel, the German Finance Minister, complained that governments “could not be
expected” to present their policies to the Commission before having presented
them to their national parliaments. Mr Eichel went on to say that “I know of no
other system where this is the case.” Charlie McCreevy, the Irish finance
minister went even further claiming that such a move to centralise polices
would fuel the far right in Europe.

Committee to re-word Solbes’ letter
Ministers decided that the text of the letter had to be reworked. To this end,
a special economic and financial committee has been set up to reword the text.
They are to complete this task by Spring, 2003. Solbes claimed that his letter
was misinterpreted, insisting that the common standards proposed in the
letter “won’t change things fundamentally but will raise our growth potential.”

Debate more on form than substance
Giving an indication of how the discussions had gone during the council
meeting, Solbes suggested that the debate was “more on form than substance” and
that the issue had obviously “got mixed up with enlargement.” This was a
reference to the fact that Solbes had asked that such co-ordinated decision in
economic policy should be in place by enlargement.

Answering Member State accusations that he expected governments to inform
Europe before their own parliaments of budgetary decisions, he stated that
whereas the national parliaments should obviously be informed first, the
general ideas should be presented to the Commission to ensure that they did not
adversely affect the euro

Two series of proposals
The European Commission is set to present two series of proposals for enhancing
the economic policy coordination within the EU: proposals for improving the
coordination within the present Treaty framework, and proposal requiring Treaty
changes. The second set of proposals will be tabled through the Convention on
the EU future, which is set to draft a new Treaty. The Commission is expected
to make its first contribution to the Convention on May 22, and ideas on
enhanced economic policy coordination are set to be included in this paper.

Another issue of content concerns the general role of the Commission in the
process of economic policy coordination. Commissioner Solbes is set to fight
for giving the Commission the right to present proposals to the ministers and
not only recommendations, as the Treaties provide for at present. A
Commission's recommendation can be easily bypassed, as it was seen in February,
when the finance ministers failed to follow a Commission's recommendation to
reprimand Germany and Portugal over their budget policies.
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