Wednesday, 30 June 2010

Project Europe 2030 and Innovation Union

The future prosperity of EU citizens will be decided by our collective choices between reform or witnessing our decline. During the Lisbon strategy decade, we crawled in the slow lane. The new Europe 2020 strategy is now supposed to bring us jobs and growth, but without renewed resolve it will only become another pompous pipe dream.

The European Commission is preparing the flagship initiative Innovation Union, and the governments in the EU member states are drafting their first National Reform Programmes (NRPs) based on the Europe 2020 strategy.

Read on, if you want our leaders to deliver.

Council supportive

With China just ten years from closing the innovation gap with Europe on present trends, the Programme of the Belgian Presidency of the EU Council takes research, development and innovation seriously, at least verbally.

The research communities, innovation systems and other stakeholders have an opportunity to set Innovation Union and the other Europe 2020 flagship initiatives, as well as the first new generation National Reform Programmes on course for success.

Project Europe 2030

The Reflection Group chaired by Felipe González looked at strategic choices for the European Union in a long term perspective. Project Europe 2030 offers valuable ideas and suggestions to official drafters, research and development (R&D) communities and the wider public:

Report from the Reflection Group on the Future of the European Union "Project Europe 2030 - Challenges and Opportunities" (Council document 10559/1/10 REV 1)


The Reflection Group posed two fundamental questions to politicians and EU citizens (page 4):

Will the EU be able to maintain and increase its level of prosperity in this changing world? Will it be able to promote and defend Europe’s values and interests?

Human capital

The Project Europe 2030 report underlined the crucial importance of human capital and the need to catch up (page 7):

Human capital is the key strategic instrument for ensuring success in the global economy. And yet, Europe has lost considerable ground in the race to a knowledge economy. Catching up will require a coordinated effort. Member States must mobilise the resources they agreed to invest in R&D, with the help of the private sector, and reform all aspects of education, including professional training. The Union must also act through its own revised budgetary instruments, while making better use of the European Investment Bank and the European Investment Fund. Finally, we need to consider the possibility of opening up new sources of revenue, for instance through the imposition of a carbon tax.

European Research Area

In a manner comprehensible for a wider public of informed citizens, under Growth through knowledge, the Reflection Group depicts the challenges for the European Research Area (ERA) and argues for increased R&D spending on the way towards Innovation Union (page 24 to 25):

Despite numerous calls for substantial increases in R&D spending, the last decade saw relatively little change – the EU’s expenditure remains at 1.8 per cent of GDP. A concerted effort is needed in Europe to reach the ‘Europe2020’ target of 3 per cent expenditure on R&D and the creation of an “Innovation Union”. This must include budgetary reallocations and greater private sector funding. EU centres for pre-competitive applied research should be developed (public-private partnerships between states, regions and private industry) together with increased support for investigator-driven free research through the European Research Council.

To this end, it will be crucial to simplify the procedures for accessing public funding, including EU funds. This would above all benefit small dynamic businesses, which are often the driving force for forward-looking innovations. Today, SMEs account for half of the EU's GDP although they benefit from only 15 per cent of R&D programmes. New forms of partnership are needed between researchers at publicly-financed universities and researchers at privately-financed companies to ensure a continuous pooling of knowledge throughout the process of research and innovation. In particular, more funding is needed for applied research that would benefit SMEs.

Excellence must be the main criterion for granting public aid both at national and EU levels. The role of the European Research Council must be expanded and strengthened, with funds allocated strictly on the basis of peer reviewed excellence, actual or potential. Likewise, the EU must encourage the development of “European poles of excellence” while ensuring that this process of concentration would not lead to the creation of “intellectual deserts”.

Last but not least, the European Research Area must become a reality – an area without borders where all scientific potential, wherever it is, can be fully tapped thanks to the free movement of researchers, ideas, technologies and capital. This process of “Europeanization” must itself be part of a more general openness to the world. Transfers of knowledge have now become the indispensable complement to the traditional drivers of globalisation based on material and capital flows.

The views of the Reflection Group are not new, but they are presented in a clear and convincing manner.

Regulatory framework for innovation

The Reflection Group states the need for dynamic Europe-wide markets in services in order to unleash innovation and creativity (page 25):

Europe often finds it difficult to translate scientific research into new products, new patents, new entrepreneurial activities and new jobs. A lack of competition in service markets inhibits innovation, raises costs and limits growth. Financial services, next generation digital services, energy solutions and services to promote health and learning have all huge potential. The EU is well placed to become a leader in the new service industries, but only if service providers are supported by a Europe-wide market and a new regulatory environment where innovation and creativity can actually flourish.

Free global markets that respect intellectual property rights are the essential breeding ground for innovation. It is therefore important that Europe remains committed to improving market access both inside and outside Europe, most effectively through the completion of the Single Market, both in regard to services and new technologies. At the same time, the EU must reform the rules on intellectual property, for instance through the creation of a straightforward European patent system that is affordable, quick and reasonable, and offers effective protection on a European scale.

In this context, it will equally be important to put in place the measures needed to reinforce risk capital markets and the availability of seed capital. In particular, SMEs – which are very often at the forefront of innovation – need more adequate support mechanisms, including access to risk capital, to help them compete in the global marketplace.

The creative economy will continue to evolve faster than the political processes intended to support or regulate it. Every day it reveals new horizons and revolutionary prospects. Flexibility and responsiveness must therefore be the backbone of any regulatory framework in this field. Facilitating a culture of risk-taking and entrepreneurship is even more important. Only this will allow the EU to fully reap the rewards of research and experimentation, and with it to create new jobs.

From words to action?

Half a century from the launch of the Common Market, the European Union is still struggling to achieve a functioning internal market (or Single Market) in services.

Just a few examples:

The general Services Directive is a complex and ill digested compromise between European ambitions and tribalist instincts. Many member states have been slow in putting the Services Directive 2006/123 into practice. (See information note 18 May 2010, document 9475/10.)

Businesses and consumers pay the price of fragmented digital markets, as shown by the 15th progress report. Splintered markets do not give birth to world class services at affordable prices.

The “straightforward” European patent system has resisted the efforts of several EU Council presidencies keen to act as midwives.

Project Europe 2030, by the Reflection Group, highlights important challenges and opportunities facing politicians, public officials, business leaders, unions and citizens. Innovation Union needs energetic support, decisive action and high quality communication.

Ralf Grahn

Tuesday, 29 June 2010

Europe 2020 strategy: Belgian EU Council presidency and Innovation Union

Yesterday we looked at the visible preparation and communication by the Commission services of the flagship initiative Innovation Union, in the framework of the Europe 2020 strategy for jobs and growth.

The central Europe 2020 website was (and still is) like an abandoned child rather than the promising heir to Europe’s ambitions. DG Enterprise and Industry may have done a lot of preparatory work last year, but has not taken care to inform stakeholders or the general public about ongoing preparation, if any.

On the other hand, DG Research has shown the way for other Commission services, EU institutions, Council presidencies and member states, by reaching out to stakeholders through interactive means.

If DG Research continues in the same spirit, it can foster informed debate with the research community and the wider public, as Linda Margaret noted in a comment.

Belgian presidency of the EU Council

It is time to turn to how the Council of the European Union prepares for and communicates the coming flagship initiative Innovation Union. Our natural starting point is the work programme for the second half of 2010.

The Programme of the Belgian Presidency of the EU Council presents the wider context (strategic framework) for the work during the coming six months. Here the programme states (page 5):

The EU 2020 strategy for employment and growth aspires to establish an intelligent, sustainable and inclusive economy. This assumes growth in employment, a greater mobilisation in support of innovation and education, as well as making ambitious commitments on climate issues and, lastly, a strengthening of social cohesion. The fulfilment of the major objectives defined by the European Council will underpin the socio-economic priorities of the Belgian Presidency's programme.

December European Council

On page 6, the Belgian presidency adds a note on industrial policy, as well as research and development:

The Belgian Presidency will also seek to lend momentum to a sustainable industrial policy, with the main aim of developing a green European economy, competitive at the global level. It will maintain an integrated approach, covering all facets of innovation and targeting the needs of businesses, in the main, and those of SMEs in particular.

Research, development and innovation will be the subject of in-depth discussions at the European Council in December 2010. As a priority, it must define guidelines for better coordination of Member States' policy in this area. The Belgian Presidency will focus on defining indicators to measure both the extent to which the crucial objective of 3% is being met, as well as the progress achieved through the creation of a European Research Area. Particular attention will be devoted to the free flow of knowledge within this European Research Area and to the simplification of Community programmes.

October European Council

In the operational part of the presidency programme, Belgium turns to the upcoming European Council meeting in October 2010 (page 12):

In accordance with the European Council’s decision of March 2010, the October European Council will focus its attention on research and development and specifically examine the resources required to increase Europe’s innovation potential and competitive capacity in light of the challenges it faces. The Belgian Presidency will ensure that the debate is properly prepared and monitored by all sittings of the Council concerned.

Are both the October and December European Council meetings going to be dedicated to the same subjects?

Intellectual property

Under Competitiveness, the Belgian presidency programme deals with the related area of intellectual property, where the tenor seems to be more supportive of the interests of rights holders and the US administration than of user industries, ordinary users and “digital natives” (page 21 to 22):

Intellectual property

Adequate protection of intellectual property has been identified in the Europe 2020 Strategy as one of the most significant obstacles to successful operation of the internal market. Appropriate innovation and protection of innovative ideas form a whole at a European level. Under the Belgian Presidency, the Council will continue its work on the resolution of questions which remain open, both for the EU patent and for the unified patent litigation system.

Regarding copyright, under the Belgian Presidency, the Commission’s legislative initiative on orphan works will be the subject of an initial policy debate at the Council. Taking into account the digital development of libraries such as Europeana and other private initiatives, the Council will seek to make the most of an opportunity for European legislation on the matter.

Among the various initiatives in progress concerning the respect of intellectual property rights, at both a European and an international level, the Belgian Presidency will give special priority to negotiations on the Anti-Counterfeiting Trade Agreement (ACTA) with a view to their conclusion before the end of 2010.

Industrial policy

Also related to innovation is the coming Europe 2020 flagship initiative for industrial policy (page 22):

The Belgian Presidency will promote the launch of “Industrial policy in the era of globalization” as a flagship initiative of the Europe 2020 Strategy, while ensuring the articulation of the horizontal approach and the dimensions associated with these sectors. In particular, this new industrial strategy seeks to ensure the development of a proactive consultation process concerning the transition of the European economy to a green economy which is competitive on the world stage, and to provide a response to the challenges and opportunities which this poses to European industry.

Innovation Union

The flagship initiative Innovation Union, including various aspects of research, development and innovation are dealt with at length in the Belgian presidency programme (from page 22 to 24):

Research, development and innovation will be highlighted as priorities during the second half of 2010 within the context of the Europe 2020 Strategy through the "Innovation Union" flagship initiative. In compliance with conclusions adopted by the European Council in March 2010, the Council must make a contribution on this subject in preparation for the European Council in December. The Belgian Presidency will focus on formulating guidelines, defining policy objectives and developing indicators which allow progress on the creation of a European Research Area (ERA) to be measured.

On the basis of the Commission communication concerning the plan for research and innovation, the Belgian Presidency will favour an integrated approach covering multiple facets of innovation – technological, non-technological, and social – which promote its distribution throughout the economic fabric and which respond to the current challenges and the needs of businesses, particularly SMEs. In the context of the knowledge triangle, the role of clusters and the relationship between research centres, training and business will be examined.

In light of the development of the 8th Framework Programme, under the Belgian Presidency, the Council will conduct work relating to the simplification of administrative procedures and financial controls from the 7th Framework Programme for Research and Development.

Throughout the Belgian Presidency, particular attention will be given to the development of the following three initiatives relating to free circulation of knowledge within the European Research Area:

• definition of framework conditions for the “joint-programming” initiative with social challenges as the priority;

• continuation of the execution of the European partnership for researchers, in particular to increase their mobility and improve their status;

• promotion of improved integration in universities and research institutes within the knowledge triangle.

Under the Belgian Presidency, the Council will work to develop the role of the regions in the development, implementation and monitoring of research and European Scientific Policy.

Under the Belgian Presidency, the Council will examine the contribution of R&D to a sustainable society through strategic bio-economy initiatives, the plan for the development of low carbon technologies, (SET Plan) and marine and maritime research.

The Council will continue the discussion on the ITER project and examine the possibility of extending the 7th Euratom Framework Programme (scheduled to end in 2011) so that it comes to an end at the same time as the 7th Research Framework Programme due to end in 2013.

In the space sector, the Presidency will seek to ensure progress is made in the definition of a European vision for space exploration in order to allow the European Union's flagship programmes for the space sector to operate sustainably as soon as possible. Finally, the implementation of competence in the space sector, accorded to the EU by the Treaty of Lisbon, will receive the undivided attention of the Belgian Presidency which will seek to bring together existing European expertise and infrastructures in the space sector, in particular those of the European Space Agency.

Innovation is mentioned in other contexts as well, such as health, transport and education.

Verbally, at least, the EU Council takes research, development and innovation seriously, as it should with China just ten years from closing the innovation gap.

Ralf Grahn

Monday, 28 June 2010

Europe 2020 strategy: Innovation Union - preparation and communication

There is a link to the European Council’s conclusions [to be adopted] 17 June 2010, but otherwise the European Commission’s central website for the Europe 2020 strategy for jobs and growth is still as dead as the dodo.

While waiting for the Commission, the Council, the European Parliament and the member states to start communicating the Europe 2020 strategy in earnest, we continue looking for elements of the flagship initiative Innovation Union.

We already looked at Innovation Union in the light of the Commission’s communication on the Europe 2020 strategy: COM(2010) 2020 final.

With China about to close the innovation performance gap in ten years, one would expect the European leaders to be shaken as well as stirred into action. The Commission’s Work Programme (CWP) for 2010, and especially the so called Roadmap published by the Impact Assessment Board (IAB) on the initiative Research and Innovation Plan added useful elements to our knowledge.

DG Enterprise and Industry

The home page of the European Commission’s Directorate-General Enterprise and Industry offers two links to the Europe 2020 strategy.

The text link takes us to a page with a general description, which mentions the European Council 26 March 2010. It offers a further link to the central Europe 2020 web page we already gave a preliminary death certificate.

The graphic link of DG Enterprise takes us directly to the central Europe 2020 web page, but naturally the contents remain the same.

Do we fare any better if we look under Innovation policies? Future EU innovation policies catches our eye.

Yes, we do find materials on preceding public consultations held in 2009, but nothing really new or concrete about the European plan for innovation (Innovation Union) being prepared for presentation in the autumn 2010.

The website of commissioner Antonio Tajani does not add anything on EU2020.

DG Enterprise and Industry should start communicating comprehensively on the preparation of the flagship initiative Innovation Union.

DG Research

The home page of DG Research tells us that commissioner Máire Geoghegan-Quinn arranged a webcast for EU citizens about Innovation Union 17 June 2010. She discussed with participants in an open and convincing manner, and she has promised to post answers to frequently asked questions she was unable to reply to during the webcast.

There is also a frequently updated Innovation Union Facebook page and a group with 318 members.

This is a good start, and the use of interactive communication and social media is promising.

Still, the Press centre and the Facebook group offer mainly disparate news “shrapnel”. The next step could be to create well structured thematic pages for Innovation Union and to contribute to turning the central Europe 2020 web page into a constantly updated website.

Ralf Grahn

Sunday, 27 June 2010

EU Single Market from Mario Monti report to real reform?

If this was the Official Journal of the European Union (OJEU), this would be called a text with EEA relevance.

On Europe Day, 9 May 2010, professor Marion Monti delivered his report to the president of the European Commission, José Manuel Barroso:

A new strategy for the Single Market at the service of Europe’s economy and society (107 pages)

If Project Europe 2030 of the Reflection Group, of which Monti was a member, received faint praise from the European Council, the heads of state or government showed a measure of commitment in their response to the proposals to reform the Single Market.

European Council conclusions

The conclusions of the European Council 17 June 2010 (document EUCO 13/10) mention Monti’s Single Market reform report in the context of a new European strategy for jobs and growth, under Finalising and implementing the Europe 2020 Strategy. Point 6, on page 4 tells us:

6. In particular, Europe's Single Market needs be taken to a new stage, through a comprehensive set of initiatives. The European Council welcomes the report presented by Mr Mario Monti on a new strategy for the Single Market and the Commission's intention to follow it up by presenting concrete proposals. The European Council will revert to this matter in December 2010.

Belgian EU Council presidency

If we look at the Programme of the Belgian Presidency of the EU Council (52 pages), it first mentions the Monti report under the strategic framework (‘Europe in action!’) on page 5:

The Belgian Presidency will continue the work set in motion by the Monti report dedicated to identifying the bottlenecks, missing links and new frontiers of the internal market.

The operational part of the Belgian presidency programme picks up the Monti report when it deals with the work in the Competitiveness Council (Internal Market, Industry and Research). The first paragraph of the section Internal market, on page 21, can be seen as a clear endorsement of future action:

Our primary concern is to strengthen the internal market. The Monti report contains recommendations relating to bottlenecks, missing links and new frontiers within the internal market. Based on this report, and the communication by the Commission referring to it, the Belgian Presidency will reopen the debate on the reinforcement and completion of the internal market, as well as the implementation of and compliance with its rules. This will involve preparing the ground for the Commission’s White Paper.

Future action?

If we believe what the European Council and the Belgian presidency of the Council of the European Union omit to tell us directly, and what they communicate in express terms, Project Europe 2030 languishes in limbo (as useful input), but the European Commission has been given a green light to prepare concrete proposals to reform the internal market (White Paper).

Pro captu lectoris, habent sua fata libelli.

Ralf Grahn

Project Europe 2030: Three stations to oblivion or Europa rediviva?

The first station was the handing over.

On 8 May 2010, the chairman of the EU Reflection Group, Felipe González delivered the report by the Reflection Group the European Council had appointed in December 2007: Project Europe 2030.

President Herman Van Rompuy received the report on behalf of the European Council.

Distributing the report

The second stopping place was that the Reflection Group report was distributed to the heads of state or government:

Project Europe 2030 - Challenges and Opportunities 10559/1/10 REV 1

Ahead of the European Council meeting 17 June 2010, which was going to hear a presentation by González, I wondered if the report was going to get more than a kind nod before being dispatched to the burial ground for high level EU reports, the archives.

European Council conclusions

The third station of the itinerary is pictured in the conclusions of the European Council 17 June 2010 (document EUCO 13/10).

Under Other issues (point 22, on page 9), the heads of state or government used a minimalist formula to acknowledge the 18 month work of twelve Europeans of stature:

22. The European Council expresses its appreciation for the work achieved by the Reflection Group. The Group's report on "Project Europe 2030 - Challenges and Opportunities" will provide useful input for the European Union's work in the future.

Useful input?

How is Project Europe 2030 going to provide “useful input”, or has it already entered afterlife?

Let us turn to the latest programme document for the future work of the Council of the European Union:

Programme of the Belgian Presidency of the EU Council

Seek, and you shall not find any mention of the Reflection Group or Project Europe 2030.

Requiescat in pace?


Even if the European leaders seem to have inscribed the epitaph and sent Project Europe 2030 into limbo, there remains the hope of resurrection.

All the member state governments are busy preparing their macroeconomic stability or convergence programmes, synchronised with the national reform programmes (NRPs), in the framework of the Europe 2020 strategy and the integrated guidelines for economic and employment reform policies.

If ministry officials, national politicians, business groups, unions and EU cohesion policy project hosts keep the Europe 2030 report at hand as a guiding document, the work of the Reflection Group may bear some fruit.

Europa rediviva?

Ralf Grahn

Saturday, 26 June 2010

Belgium’s EU Council presidency website: First impressions

Euroblogger Julien Frisch noted the fresh look of the website of the Council of the European Union, redesigned in a manner similar to the new web pages of the European Council. Julien liked the look, but essentially the navigability had not improved that much. I agree with his remarks:

I want to click on the Agriculture Council and find all meeting documents, news, photos etc. (including the work of the Working Parties) available instead of having to search for them with a lot of efforts in the Council document register.

Speaking about the register that is linked under "Documents" in the main menu, I'd recommend that you don't need to click through four links until you actually can search for documents. Why not having a search right after clicking on "Documents"?, officially Se former à la communication européenne, has analysed (in French) various aspects of how the EU institutions communicate. A few days ago, they assessed the European Commission’s Internet Providers Guide (IPG), the Internet handbook for webmasters, editors, content providers, web developers and contractors, as well as others who publish material on EU websites. After a detailed study, they concluded that there is a deep gap between the recommendations the Commission gives to officials and the advice of social media experts .

Two days ago, Lacomeuropeenne made a quick audit of the usability of new Council website. Despite some signs of progress, there were still confusing aspects and the experiences of users are needed for more definitive conclusions.

Both assessments noted the lack of interactive, user-friendly features.

Belgium’s presidency website

Outwardly the newly launched website of the Belgian presidency of the Council of the European Union is like a sister or brother to the site of the European Council and the redesigned web pages of the Council.

It is clear, well ordered and pleasing to the eye.

A few days before the start of the Belgian presidency, on 1 July 2010, there is mainly basic material to test on, so user experiences will mainly have to be deferred.

A few impressions, though.

If you look, you are able to locate the 18 month programme and the Belgian six month programme.

In my opinion, the Swedish presidency had the best website to date, and they started to interact with users of social media and to monitor blogs. How about the Belgian presidency?

There is not much in the line of interactivity. A poll deep down on the front page asks:

Did you know that Belgium was to take upon the rotating Presidency of the EU on the 1st of July?

I would not expect people to find the Belgian presidency pages without knowing what to look for, but potentially the polls can be used for less inane purposes.

It may be that I lack technical savvy, but I do not know why the EU institutions and presidencies insist on speaking about feed burners but fail to clearly tell us the actual feed URLs, especially ones that actually work.

Test for instance: ? ?

After a process of trial and error, I was finally able to find a feed for my blog.

Somewhere there was an oblique promise of a blog to come (with the potential for interactive use), but I failed to locate it when I visited the website again.

The page on Logo and guidelines fails to make a distinction between official use and use by others of different graphic designs, without wading through a detailed graphic charter or asking for permission.

I would imagine that the Belgian government (if there is one) would be pleased to see its banner all over the place, but public institutions almost always seem to be obsessed by potential abuse and to end up with less than clear and inviting policies.

Is a newspaper or a blogger allowed to use the banner (and other material) freely?

It would be simple to give a clear answer up front, without sending people off to chase wild geese. Now the difference between official and other use is quite unclear.

Only the coming six months will tell if the quality of information is going to improve under the Belgian presidency, after the obvious lapse during the Spanish semester.

I hope that Julien Frisch, Lacomeuropeenne and others more expert in web communications than I, offer their views and user experiences of the Belgian presidency pages. There are still six months to make improvements, if there is a need.

Naturally, it would also require the right kind of attitude.

Ralf Grahn

EU Council presidency primer - Belgium’s website launched

With less than a week to go to the beginning of July, Belgium yesterday launched the website of the Belgian Presidency of the EU Council.

This is primarily a primer or background note on matters relating to the Council presidency under the Lisbon Treaty.

Slimmer presidency

The presidency is still held on the basis of equal rotation (Article 16(9) TEU). If we want to be exact, it is not the presidency of the Council, but of Council configurations other than that of foreign affairs.

The Treaty of Lisbon has limited the scope of the presidency in two respects:

1) The European Council has a full time president (now Herman Van Rompuy), elected for two and a half years according to Article 15(5) TEU.

2) According to Article 18(3) TEU the high representative for foreign affairs and security policy (now Catherine Ashton) presides over the Foreign Affairs Council (FAC).

Presidency trio

According to Article 236(b) TFEU the European Council adopts by qualified majority a decision on the presidency of Council configurations, other than that of foreign affairs.

When the Lisbon Treaty entered into force, the European Council adopted such a decision:

EUROPEAN COUNCIL DECISION 2009/881/EU of 1 December 2009 on the exercise of the Presidency of the Council; OJEU 2.12.2009 L 315/50

Article 1 of the decision lays down the principles of presidency trios and a common programme, both intended to improve continuity (although in practice the system had been introduced earlier):

Article 1

1. The Presidency of the Council, with the exception of the Foreign Affairs configuration, shall be held by pre-established groups of three Member States for a period of 18 months. The groups shall be made up on a basis of equal rotation among the Member States, taking into account their diversity and geographical balance within the Union.

2. Each member of the group shall in turn chair for a six-month period all configurations of the Council, with the exception of the Foreign Affairs configuration. The other members of the group shall assist the Chair in all its responsibilities on the basis of a common programme. Members of the team may decide alternative arrangements among themselves.

What still makes the presidency a big circus appears from the next provision.

The responsibility to chair the Council configurations is not limited to the formal meetings of ministers in the Council. According to Article 2, it entails chairing the (weekly) meetings of the ambassadors and their deputies (Coreper) as well as the preparatory bodies of various Council configurations (with the exception of the Political and Security Committee and expressly made exceptions).

The intended coordinating role of the General Affairs Council (GAC) is stated in Article 3.

Exercising the presidency

An implementing decision sheds more light on the order of the presidency trios until 2020, the chairing of the preparatory bodies of the FAC, and the chairing of the other Council preparatory bodies (fixed chairs):

COUNCIL DECISION 2009/908/EU of 1 December 2009 laying down measures for the implementation of the European Council Decision on the exercise of the Presidency of the Council, and on the chairmanship of preparatory bodies of the Council; OJEU 9.12.2009 L 322/28

Current presidency trio

Spain during the first half of 2010, soon Belgium from July to December and thereafter Hungary during the first six months of 2011. These EU member states constitute the current 18 month presidency trio responsible for chairing the Council of the European Union.

The 18 month programme of the Spanish, Belgian and Hungarian presidencies is still available.

Council work

More information on the work of the Council is found in the Rules of Procedure (see Annex), which have been adapted to the Lisbon Treaty:

COUNCIL DECISION 2009/937/EU of 1 December 2009 adopting the Council's Rules of Procedure (consolidated version)

Council configurations

Annexed to the Council’s Rules of Procedure, we find a list of Council configurations. Nine of them are expected to be chaired by the rotating presidency, but the trio can agree to share responsibilities:

1. General affairs;
2. Foreign affairs (chaired by the high representative);
3. Economic and financial affairs (including the EU budget);
4. Justice and home affairs (including civil protection);
5. Employment, social policy, health and consumer affairs;
6. Competitiveness (internal market, industry and research) (including tourism);
7. Transport, telecommunications and energy;
8. Agriculture and fisheries;
9. Environment;
10. Education, youth and culture (including audiovisual affairs).

List of preparatory bodies

The list of preparatory bodies (16 pages) published by the General secretariat offers additional information about the variety of areas where experts from the member states lay the groundwork for the formal Council meetings, which are only the tip of the iceberg:

List of Council preparatory bodies; Brussels, 11 February 2010, document 5869/1/10 REV 1

Belgium’s presidency programme

The programme of the Belgian Presidency of the EU Council (52 pages) offers an updated view of the EU Council’s work during the coming months.

News feed on Grahnlaw

Grahnlaw has added a news feed in the right hand margin. Scroll down until you find the headline

Ralf Grahn

Friday, 25 June 2010

Trichet writes to Van Rompuy on economic governance

When the president of the European Central Bank, Jean-Claude Trichet, spoke at the hearing of the Economic and Monetary Affairs Committee of the European Parliament 21 June 2010, he was not prattling on as a free thinker.

On the eve of the European Council 17 June 2010, Trichet had sent a letter to its president Herman Van Rompuy, who chairs the task force on economic governance. Enclosed were the proposals by the ECB to strengthen decisively the governance and enforcement structures in the economic policy framework of the euro area:

I trust that the proposals will be useful for the deliberations of the Task Force.

On 14 pages the Governing Council of the ECB details its proposals for

(1) strengthening surveillance over budgetary policies and more effective prevention/correction of excessive deficits and debts;

(2) an improved framework for competitiveness surveillance and the correction of economic imbalances and

(3) the design of an appropriate euro area framework for crisis management.

The Governing Council of the European Central Bank is the main decision-making body of the ECB. It consists of the six members of the Executive Board and the governors of the national central banks of the 16 euro area countries.

A heavyweight contribution, I would say.

Ralf Grahn

ECB’s Trichet on economic governance in EMU

The EU heads of state or government have stowed away the discussions about improving European Union and eurozone economic governance into the finance minister task force chaired by Herman Van Rompuy. The task force is expected to report in October.

For the sake of transparency and informed public debate, it is therefore important that these crucial matters are debated elsewhere as well. One welcome intervention was made by the president of the European Central Bank, Jean-Claude Trichet, at the hearing of the Economic and Monetary Affairs Committee of the European Parliament 21 June 2010.

EMU responsibility

According to Trichet, policy makers have to understand the requirements of the Economic and Monetary Union (EMU):

A single market of 500 million citizens and an Economic and Monetary Union of 330 million citizens – which are among the largest and most advanced economies in the world and which are built on solid foundations in terms of human and social capital – cannot and should not be measured according to the strengths or weaknesses of their individual components alone. Particularly as regards Economic and Monetary Union, policy-makers need to internalise what it means to be part of a monetary union, in words and in deeds.

Quantum leap for economic governance needed

Economic governance must be radically improved. Benefits and responsibilities of EMU go together. Solidarity runs both ways:

The ECB believes that a true quantum leap is needed in the framework for surveillance and adjustment of fiscal policies, as well as broader macroeconomic policies concerned with Europe’s competitiveness.

“ La solidarité de fait” that Robert Schuman called for 60 years ago is reflected in the degree of economic integration and interdependence already achieved in Monetary Union. But solidarity is a two-way street. The benefits and protection that are derived from membership of Monetary Union bring with them responsibilities and obligations. This is the fundamental contract which forms the basis for our currency. We now have to turn it into a more effective structure for fiscal and macroeconomic surveillance and adjustment.

Budget surveillance

Trichet outlined the strengthening of budgetary surveillance, including prevention, correction, a wider range of quasi-automatic sanctions and formal Commission proposals:

First, it is of the essence that the surveillance of budgetary policies be strengthened. I am pleased to note that the European Council confirmed this assessment at its meeting last Thursday.

At the level of the EU27, and in particular within the euro area, we must have effective instruments to prevent – and, where necessary, correct – excessive deficits and debt levels. A more stringent implementation of rules and procedures is essential, among other things by increasing the automaticity and speed of procedural steps. The initiation of sanctions also needs to be quasi-automatic.

Fiscal surveillance must be more direct and effective. It must also be based on more independent monitoring and assessment. We may need a differentiated approach to surveillance depending on the fiscal performance of countries. The Commission should have greater responsibility by making proposals, which can only be modified with unanimity in the Council, rather than mere recommendations under the Stability and Growth Pact.

In the event of non-compliance, sanctions need to be applied much earlier and to be broader in scope. They should not only address excessive debt ratios, but also apply when countries are not making sufficient progress towards medium-term budgetary objectives. A wider spectrum of financial sanctions needs to be considered, along with non-financial and procedural sanctions, such as more stringent reporting requirements or even a limitation or suspension of voting rights.


Broader economic reforms and surveillance of macroeconomic policies are needed to enhance competitiveness and prevent imbalances:

The second area may appear more novel, both at the level of the European Union and at the level of the euro area, but the ECB has in fact been stressing it in the Eurogroup since at least 2005: the surveillance of policies to maintain Europe’s internal and external competitiveness – policies to raise productivity, to enhance people’s skills and to improve firms’ competitiveness. These policies go well beyond the tradable sector. They must also encompass the non-tradable sector, including the public sector, since it too is decisive for the competitiveness of an economy as a whole.

Conscious management of wages and costs in order to maintain a healthy position for the economy within a competitive environment – this should be the core focus of such broader macroeconomic surveillance. The reason why competitiveness should be the main focus is not that countries should pursue export-oriented policies or boost international market share. The reason is that within a monetary union, the relative competitiveness of economies captures very well the sustainability of price and cost developments.

I am pleased that last Thursday’s European Council confirmed the need for an effective surveillance framework in this area. Experience has shown that persistent divergence in this regard is detrimental both for Member States and for Monetary Union as a whole.

As with fiscal surveillance, this framework needs to allow for targeted and differentiated surveillance and follow-up measures. For countries that experience significant losses of competitiveness, surveillance should become increasingly deep and detailed. More ad hoc reporting and dedicated country missions, policy recommendations, compliance requirements, public peer pressure and gradual financial steps to encourage compliance could all be part of that process.

For this to work, we need a transparent and effective trigger mechanism to determine the intensity of vulnerabilities and surveillance. This should be based on close monitoring and reporting by both the Commission and the ECB. Experts are currently developing ways to best capture the complexity of the issue, as well as procedures by which indicators could be used in a surveillance and adjustment framework.

If we can put in place effective surveillance and adjustment frameworks for both fiscal and competitiveness policies – and if we can ensure through appropriate regulation that our financial system serves the real economy and not the other way around – our European Union and our Economic and Monetary Union will exit this crisis much stronger than before and will be very well placed in the global economy.

Wise public spending and growth oriented reforms are needed, but the Economic and Monetary Union is far from over, if our political leaders grasp the nettle.

Ralf Grahn

Van Rompuy’s dilemma

How often are the ones who caused the problems the right bunch to solve them?

The European Council on 17 June 2010 drew some preliminary conclusions regarding fiscal consolidation and economic governance (document EUCO 13/10). In principle, the heads of state or government are prepared to strengthen the preventive and the corrective arms of the Stability and Growth Pact (SGP). They are also willing to assess competitiveness and imbalances, as well as to create a surveillance framework for the eurozone.

The task force on economic governance is expected to report to the European Council meeting in October.

Chairman Herman Van Rompuy’s dilemma is that he has to work with the same groups of people (if not individuals) who caused the problems in the first place.

First, the national leaders created a monetary union, without economic union.

Then, Jacques Chirac and Gerhard Schröder shredded the original Stability and Growth Pact, and offered many national leaders an excuse to postpone structural reforms and stray from fiscal prudence.

The national leaders, who sit in the European Council, are the ones to determine the shape and the fate of the coming proposals.

The task force pondering improved economic governance consists of the finance ministers, who until now have never used the existing SGP sanctions, let alone proposed new ones.

In the past, the political leaders and the ministers of finance were at the root of the problem. Can they become part of the solution?

Ralf Grahn

Thursday, 24 June 2010

Funding for Europarties and their foundations 2011: Misleading calls for proposals

Europarties and their political foundations are going to receive 28.8 million euros in subsidies in 2011 from the European Parliament (and EU taxpayers).

Even if the established political parties at European level, represented in strength in the European Parliament, are insiders who know the applicable rules, it is disconcerting to read the calls for proposals.

First of all, the announcements refer to a defunct Treaty.

Second, they to refer to a Bureau Decision of 29 March 2004, replaced by a later Decision, which does not acknowledge the fact that it is an amending Decision. Thus, both the Decision and the calls for proposals are misleading.

Third, it would have added a nice touch, if the calls for proposals had mentioned that Regulation No 2004/2003 applies as amended.

Given this sad state of affairs, I am not sure that I have got things right, but here is an effort to offer correct and updated information, which should have been given by the European Parliament, especially when this is one area of EU law where the EP is in pole position.

Calls for proposals

For 2011 the European Parliament is going to award an estimated EUR 17,400,000 in operating grants to political parties at European level, colloquially Europarties. The call for proposals has been published in the Official Journal of the European Union:

Call for proposals IX-2011/01 — ‘Grants to political parties at European level’; OJEU 24.6.2010 C 164/12

The EP will award an estimated EUR 11,400,000 to the political foundations of the political parties at European level for 2011. Further details regarding the Eurofoundations are found in:

Call for proposals IX-2011/02 — ‘Grants to political foundations at European level’; OJEU 24.6.2010 C 164/17

In both cases 85 per cent of the subsidies will be distributed in proportion to the number of MEPs of parties eligible for these European level grants.

The closing date for applications is 1 November 2010.

Embarrasing Treaty miss

It is somewhat embarrassing that the European Parliament – at the centre of EU level democratic life – shows such lack of attention to detail that the very first sentence of both announcements refers to the defunct Treaty:

Article 191 of the Treaty establishing the European Community says that the political parties at European level are an important factor for integration within the Union.

Copy-pasting is wonderful, but there is always the risk of errors.

Let us try to give guidance to the potential applicants and other interested parties.

After the entry into force of the Lisbon Treaty, Article 10 of the Treaty on European Union (TEU) deals with the democratic life of the union. The political parties at European level (Europarties) are mentioned in the fourth paragraph (consolidated version, OJEU 30.3.2010 C 83):

Article 10 TEU

1. The functioning of the Union shall be founded on representative democracy.

2. Citizens are directly represented at Union level in the European Parliament.

Member States are represented in the European Council by their Heads of State or Government and in the Council by their governments, themselves democratically accountable either to their national Parliaments, or to their citizens.

3. Every citizen shall have the right to participate in the democratic life of the Union. Decisions shall be taken as openly and as closely as possible to the citizen.

4. Political parties at European level contribute to forming European political awareness and to expressing the will of citizens of the Union.

The legal base concerning political parties at European level and funding for them is provided by Article 224 of the Treaty on the Functioning of the European Union (TFEU):

Article 224 TFEU
(ex Article 191, second subparagraph, TEC)

The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, by means of regulations, shall lay down the regulations governing political parties at European level referred to in Article 10(4) of the Treaty on European Union and in particular the rules regarding their funding.

Amended Regulation No 2004/2003

The calls for proposals mention Regulation No 2004/2003, which has been amended. It would have added a nice touch to mention the amendment, so here is a link to the consolidated version of 27 December 2007:

REGULATION (EC) No 2004/2003 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 4 November 2003 on the regulations governing political parties at European level and the rules regarding their funding

Europarty and Eurofoundation

The crucial bar to eligibility for Europarties is found in Article 3(1)(b) of Regulation No 2004/2003:

it must be represented, in at least one quarter of Member States, by Members of the European Parliament or in the national Parliaments or regional Parliaments or in the regional assemblies, or

it must have received, in at least one quarter of the Member States, at least three per cent of the votes cast in each of those Member States at the most recent European Parliament elections;

Misleading EP Bureau Decision

The calls for proposals refer to the Decision of the Bureau of the European Parliament of 29 March 2004 laying down the procedures for implementing Regulation (EC) No 2004/2003, published OJEU 12.6.2004 C 155/1.

However, while misleadingly keeping the name unchanged, the European Parliament has published a new and amended decision, at least in 2008:

DECISION OF THE BUREAU OF THE EUROPEAN PARLIAMENT of 29 March 2004 laying down the procedures for implementing Regulation (EC) No 2004/2003 of the European Parliament and of the Council on the regulations governing political parties at European level and the rules regarding their funding; OJEU 3.10.2008 C 252/1.

The Decision does not even mention that it replaced or amended the preceding Decision, so there is no guarantee that this is the final word on the subject. The amendments can only be inferred by comparing the contents.

Roughly, the later Decision incorporates the changes caused by the financing of Eurofoundations.


Given the state of affairs, I cannot be sure that my searches have been able to locate the applicable rules, but these examples suffice to show the need for improvement by the European Parliament.

Ralf Grahn

Wednesday, 23 June 2010

Olli Rehn on improving EU and eurozone economic policy coordination

Olli Rehn, the commissioner for economic and monetary policy, outlined the reform steps the European Union needs, in a speech in Brussels 22 June 2010 (SPEECH/10/329):

Beyond consolidation, we need to act in two further areas: economic governance and structural reform, especially including reform of the financial system.

On 12 May, the Commission made substantial proposals to improve economic policy coordination in the EU. The fiscal framework of the EU, defined by the Stability and Growth Pact, has sound rules. But we can improve it with three main building blocks for reform:

Firstly, we need to synchronise EU surveillance with the national budgetary processes with a "European Semester". Member States should submit their Stability and Convergence Programmes and National Reform Programmes timely, so that they can benefit from early coordination at European level as they prepare their national budgets. We must also put more force behind the Pact – both when there is an Excessive Deficit but also earlier. The Pact must have sufficient teeth to ensure that all Member States exercise fiscal discipline that is not only good individually for the MS but a necessary condition for a smooth functioning of the common currency area.

Secondly, we must look beyond the budget and address macro-economic imbalances between Member States. Both strong exports, based on competitiveness, and domestic demand are important for our prosperity. Strong divergences between Member States can undermine cohesion, especially within the euro area. This must be tackled before it becomes a costly problem for all.

Thirdly, in the medium-to-long term we need to build a crisis resolution mechanism that is permanent. It is better to be safe than sorry.

Moreover, fiscal consolidation should be embedded in a strategy to lift productivity growth and employment rate. In our rapidly ageing societies, this is only possible through significant structural reforms in all areas of economic activity. Last week, the European Council adopted the "Europe 2020" growth strategy to this end.

Proposal on economic policy coordination

The 12 May 2010 proposal Rehn referred to contains analysis and suggested reforms regarding eurozone countries as a group and EU member states as a whole. It is the starting point for the various discussions taking place with a view to finding solutions to common challenges:

Commission Communication: Reinforcing economic policy coordination; Brussels, 12.5.2010 COM(2010) 250 final

Ralf Grahn

China closes the innovation gap in ten years (Innovation Union in Europe 2020 strategy)

With regard to innovation performance, China is showing a rapid rate of relative improvement, which points to a possible closing of the performance gap with the EU in the near future (10 years under a business-as-usual simple linear extrapolation), says an assessment by European Commission experts.

For an inspired tour of antiquated European mindsets versus real world challenges, you can read the blog post by Jason O’Mahony: As Europeans slowly shuffle off history’s pages...

Time for Europeans to wake up?

Innovation Union

The blog post Europe 2020 strategy: Flagship initiative Innovation Union presented the outline of coming action promised by the European Commission in the Europe 2020 communication COM(2010) 2020 final.

We find no updated information on the Commission’s central Europe 2020 web page yet, in general or with regard to the flagship initiative Innovation Union.

Commission Work Programme

Under the headline Advancing the Europe 2020 flagship initiatives, the Commission’s Work Programme (CWP) for 2010 promises (page 5):

Concrete steps will be taken in the coming months to flesh out the Europe 2020 flagship initiatives, in close cooperation with relevant Council formations and stakeholders. The Commission will set out its proposals by way of the following communications:


– “A European plan for research and innovation” (strategic initiative 11): This "Innovation Union" flagship will set out priorities to improve framework conditions for Europe's research and its capacities for creativity and innovation, including eco-innovation. This will contribute to the planned autumn discussion of the European Council.



Commission Work Programme 2010: Time to act Brussels, Volume I; 31.3.2010 COM(2010) 135 final (13 pages)

In Annex I (Volume II) a Communication on a European Plan for Research and Innovation is promised during the third quarter of 2010 (page 3), in:

Commission Work Programme 2010 Time to act, Volume II Annexes; Brussels, 31.3.2010 COM(2010) 135 final (44 pages)

European plan for research and innovation assessed

The Impact Assessment Board (IAB) has published a so called Roadmap, a preliminary assessment of the Commission Work Programme initiative Research and Innovation Plan (10 pages). The Commission is expected to adopt the Communication on 7 September 2010.

The Roadmap describes the context, including the long term vision for the European Research Area (ERA).

The main problems are laid out in a matter-of-fact way, including the introductory quote of this blog post, which is found on page 2 of the Roadmap.

The Roadmap then presents the objectives of the Innovation Union initiative, the expected impacts of the European plan for research and innovation, evaluations of previous policies and accomplished impact assessment work, as well as plans for further impact assessment work.

The Roadmap is detailed and full of references to sources, in short, an excellent introduction to the state of research and innovation in Europe, and the need for energetic action.

Ralf Grahn

Tuesday, 22 June 2010

Communicating Europe 2020 strategy: Time to act

The previous blog post, Europe 2020 strategy asleep?, remarked on the paucity of information and lack of inspirational character of the European Commission’s central web page on the Europe 2020 strategy for growth and jobs.

Commission Work Programme

If we look at the substance, the first of four strands of Commission action in 2010 is: Tackling the crisis and sustaining Europe’s social market economy (page 3).

The Commission goes on to describe how it will advance its centrepiece initiative, the Europe 2020 strategy, under the following headings (pages 4 to 7):

• Exiting from the crisis
• Advancing the Europe 2020 flagship initiatives
• Tackling Europe’s bottlenecks and missing links


Commission Work Programme 2010: Time to act, Volume I; Brussels 31.3.2010 COM(2010) 135 final (13 pages)

The strategic Europe 2020 flagship initiatives in 2010 and probable later priority proposals are then listed individually in the Annexes to the Commission Work Programme 2010:

Commission Work Programme 2010 Time to act, Volume II Annexes; Brussels, 31.3.2010 COM(2010) 135 final (44 pages)

Commission’s communication priorities

Even if the name of the Europe 2020 strategy is not mentioned, the Commission’s Work Programme 2010 could hardly be clearer about its crucial role among the communication priorities (page 11):

Communicating Europe in a transparent and accessible manner is a prerequisite for citizens' participation in the democratic life of the Union and for Europeans to be fully aware of the opportunities provided by EU policies. This is a shared responsibility of all actors at different levels, with the Commission willingly taking up its part. In addition to general information and communication activities, the Commission will put particular emphasis on three joint communication priorities: driving the economic recovery and mobilising new sources of growth; climate action and energy; making the Lisbon Treaty work for citizens.

According to president José Manuel Barroso’s mission letter, he and vice-president Viviane Reding are in charge of the communication policy of the European Commission.

However, if you look at the web page of commissioner Reding or of DG Communication, you may be forgiven for asking if anyone takes responsibility for communication policy in the new Commission.

Common communication priorities

The Council’s Working Party on Information (WPI) has essentially endorsed the partnership approach between the EU institutions and the member states, including the theme on driving the economic recovery and mobilising new sources of growth.

The remarks (on page 4) specifically targeted issues relevant to the Europe 2020 strategy (economic crisis and Digital Agenda), in:

EU common communication priorities for 2010; Brussels, 2 June 2010, Council document 10531/10


There can be little “ownership” of the Europe 2020 strategy among citizens and so called stakeholders before the EU institutions and the member states start communicating in earnest.

In this, turning the dormant Commission web page on the Europe 2020 strategy into a dynamic and comprehensive website is a crucial and urgent first step.

Ralf Grahn

Europe 2020 strategy asleep?

As Commission president José Manuel Barroso said in the preface to the Europe 2020 proposal:

This is Europe's moment of truth. It is the time to be bold and ambitious.

Well said.

How about well done?

Europe 2020 web page

Look at the central Europe 2020 web page for the European Commission’s grand project: the strategy for jobs and growth.

In essence, we find links to the Commission’s March proposal and the conclusions of two meetings of the European Council. A few dusty links to canned contents in the margin.

No original or fresh content. Nothing to explain what is going on. No effort to raise interest or to engage.

Where are the reports on progress?
Where are the links to the ongoing work of the Commission services?
Where are the latest Council conclusions on various building blocks?
Where are the preparatory documents by Council working groups?
Where is the information about the dialogue between the national administrations and the Commission?
Where are the links to the national web pages?

Where is the feeling that anybody cares?

Ralf Grahn

Monday, 21 June 2010

European Financial Stability Facility Framework Agreement

The English version of the European Financial Stability Facility (EFSF) Framework Agreement is found in the bilingual annex to the Finnish government bill HE 95/2010 vp mentioned in the previous blog post and below (from about page 11; no numbering in this version):

EFSF FRAMEWORK AGREEMENT between: (A) Kingdom of Belgium, Federal Republic of Germany, Ireland, Kingdom of Spain, French Republic, Italian Republic, Republic of Cyprus, Grand Duchy of Luxembourg, Republic of Malta, Kingdom of the Netherlands, Republic of Austria, Portuguese Republic, Republic of Slovenia, Slovak Republic, Republic of Finland and the Hellenic Republic (the "euro-area Member States" or "EFSF Shareholders "); and (B) European Financial Stability Facility ("EFSF"), a société anonyme incorporated in Luxembourg, with its registered office at 3, rue de la Congrégation, L-1352 Luxembourg (R.C.S. Luxembourg B153.414).

Hallituksen esitys Eduskunnalle Belgian, Saksan, Irlannin, Ranskan, Italian, Kyproksen, Luxemburgin, Maltan, Alankomaiden, Itävallan, Portugalin, Slovenian, Slovakian, Suomen, Kreikan ja Euroopan rahoitusvakausvälineen välisen ERVV-puitesopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten hyväksymisestä HE 95/2010 vp (49 pages)

Ralf Grahn

European Financial Stability Facility in Finland

I have wondered why, day after day, the greatest number of visitors on Grahnlaw comes from people looking for information about the European Financial Stability Facility (EFSF).

The reason, as I see it, is the lack of credible and detailed official information available about this potentially huge defence arrangement for the common currency.

Three blog posts on 8 June 2010 summed up the available information: European Financial Stability Facility EFSF, Where democracy and transparency in eurozone rescue? and Commission tasks: European Financial Stability Facility (EFSF).

As in the case of the Greek rescue package, little improvement has been seen since then.

Factually, we have witnessed momentous pan-eurozone operations of collective defence, in the framework of the European Union.

Despite this, with the exception of a few press releases, the matters have been dealt with as bilateral and intergovernmental financial agreements, subject to unconnected national procedures.


European Financial Stability Facility

Let us turn to the national level to find some transparency.

According to a press release dated 3 June 2010, the Finnish government proposed the approval of the EFSF commitments.

The government bill, sent to parliament the following day, is available in Finnish and Swedish:

Hallituksen esitys Eduskunnalle laiksi Euroopan rahoitusvakausvälineelle annettavista valtiontakauksista HE 71/2010 vp (10 pages)

Regeringens proposition till Riksdagen med förslag till lag om statsborgen för ett europeiskt finansiellt stabiliseringsinstrument RP 71/2010 rd (10 pages)

The proposal has passed the committee stage, where its scope was widened (after the Euro Group meeting), and its contents have been approved by the plenary. It is waiting for the final vote.


According to a press release of 17 June 2010, available in Finnish and Swedish, the government of Finland has proposed the approval of the framework agreement between the eurozone countries and the European financial [stabilisation mechanism, based on: Correction] stability facility


The government bill is available in Finnish and Swedish:

Hallituksen esitys Eduskunnalle Belgian, Saksan, Irlannin, Ranskan, Italian, Kyproksen, Luxemburgin, Maltan, Alankomaiden, Itävallan, Portugalin, Slovenian, Slovakian, Suomen, Kreikan ja Euroopan rahoitusvakausvälineen välisen ERVV-puitesopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten hyväksymisestä HE 95/2010 vp (49 pages)

Regeringens proposition till Riksdagen om godkännande av ett ramavtal mellan Belgien, Tyskland, Irland, Frankrike, Italien, Cypern, Luxemburg, Malta, Nederländerna, Österrike, Portugal, Slovenien, Slovakien, Finland, Grekland och det europeiska finansiella stabiliseringsinstrumentet samt med förslag till lag om sättande i kraft av de bestämmelser i ramavtalet som hör till området för lagstiftningen RP 95/2010 (53 pages)

Readers may know how these matters have been dealt with in other countries.

Ralf Grahn

Europe 2020 strategy: Flagship initiative Innovation Union

This blog post presents the European Commission’s proposed flagship initiative Innovation Union.


In the blog entry Europe 2020 strategy: Barroso’s reform flotilla (flagship initiatives), we saw the seven thematic reform programmes proposed by the Commission to promote the strategic aims of the Europe 2020 strategy: jobs and growth.

The European Council 17 June 2010 welcomed the Digital Agenda for Europe and called for the rest of the planned flagship initiatives before the end of 2010:

Conclusions of the European Council 17 June 2010 (document 4 EUCO 13/10; points 7 and 8, page 4).

The main description of the future flagship initiatives is the proposal from the Commission:

Commission: EUROPE 2020 - A strategy for smart, sustainable and inclusive growth; Brussels, 3.3.2010 COM(2010) 2020 final (35 pages)

Innovation Union

The first flagship initiative mentioned in the Commission’s Europe 2020 communication is:

"Innovation Union" to improve framework conditions and access to finance for research and innovation so as to ensure that innovative ideas can be turned into products and services that create growth and jobs.

Innovation Union is sorted under the priority Smart growth. The relevant headline target is reiterated in short form in Annex 1 (page 32):

Achieve the target of investing 3% of GDP in R&D in particular by improving the conditions for R&D investment by the private sector, and develop a new indicator to track innovation.

The Commission described the aim of the flagship initiative Innovation Union like this (page 12):

The aim of this is to re-focus R&D and innovation policy on the challenges facing our society, such as climate change, energy and resource efficiency, health and demographic change. Every link should be strengthened in the innovation chain, from 'blue sky' research to commercialisation.

EU level action

At EU level, the Commission promised to work on multiple fronts (page 12 to 13):

– To complete the European Research Area, to develop a strategic research agenda focused on challenges such as energy security, transport, climate change and resource efficiency, health and ageing, environmentally-friendly production methods and land management, and to enhance joint programming with Member States and regions;

– To improve framework conditions for business to innovate (i.e. create the single EU Patent and a specialised Patent Court, modernise the framework of copyright and trademarks, improve access of SMEs to Intellectual Property Protection, speed up setting of interoperable standards; improve access to capital and make full use of demand side policies, e.g. through public procurement and smart regulation);

– To launch 'European Innovation Partnerships' between the EU and national levels to speed up the development and deployment of the technologies needed to meet the challenges identified. The first will include: 'building the bio-economy by 2020', 'the key enabling technologies to shape Europe's industrial future' and 'technologies to allow older people to live independently and be active in society';

– To strengthen and further develop the role of EU instruments to support innovation (e.g. structural funds, rural development funds, R&D framework programme, CIP, SET plan), including through closer work with the EIB and streamline administrative procedures to facilitate access to funding, particularly for SMEs and to bring in innovative incentive mechanisms linked to the carbon market, namely for fast-movers;

– To promote knowledge partnerships and strengthen links between education, business, research and innovation, including through the EIT, and to promote entrepreneurship by supporting Young Innovative Companies.

National level action

At national level, the Commission saw the need for action by the member states (page 13):

– To reform national (and regional) R&D and innovation systems to foster excellence and smart specialisation, reinforce cooperation between universities, research and business, implement joint programming and enhance cross-border co-operation in areas with EU value added and adjust national funding procedures accordingly, to ensure the diffusion of technology across the EU territory;

– To ensure a sufficient supply of science, maths and engineering graduates and to focus school curricula on creativity, innovation, and entrepreneurship;

– To prioritise knowledge expenditure, including by using tax incentives and other financial instruments to promote greater private R&D investments.

As we see, a plethora of actions is proposed under the flagship initiative Innovation Union. They concern different Commission services and Council configurations.

Ralf Grahn

Sunday, 20 June 2010

Europe 2020 strategy: Barroso’s reform flotilla (flagship initiatives)

EU 2020 reform delivery of three priorities and five headline targets is promised through seven flagship initiatives.

The spring European Council gave the Commission green light to prepare the thematic programmes of the Europe 2020 strategy for jobs and growth:

The Commission will further develop and submit to the Council the actions it proposes to take at the EU level, notably through the flagship initiatives.

Conclusions of the European Council 25/26 March 2010 (document EUCO 7/10; point 5(f), page 3)

The first flagship to cast off was the Digital Agenda, which was given a favourable nod by the summer European Council (point 7, page 4):

7. Further to the presentation by the Commission of the first flagship initiative on a 'Digital Agenda for Europe', the European Council endorses the establishment of an ambitious action agenda based on concrete proposals and calls upon all institutions to engage in its full implementation, including the creation of a fully functioning digital single market by 2015. The Commission is invited to report on progress achieved by the end of 2011.

A fully functioning digital single market in five years echoes the TTE Council conclusions, but if the European Council really intends to replace 27 national markets by a single European one in five years, it is dynamite.

The June European Council also called for the rest of the planned flagship initiatives before the end of 2010 (point 8, page 4):

8. The European Council looks forward to the presentation of the other flagship initiatives before the end of the year.

See the conclusions of the European Council 17 June 2010 (document 4 EUCO 13/10).

Commission flotilla

Let us not be too harsh on commander José Manuel Barroso, if his flotilla has been endowed with seven flagships. We all tend to be carried over board, at times.

The main thing is that the thematic reform vessels deliver the goods.

Let us inspect the fleet, as briefly presented in the executive summary of (pages 5 to 6):

Commission: EUROPE 2020 - A strategy for smart, sustainable and inclusive growth; Brussels, 3.3.2010 COM(2010) 2020 final (35 pages)

Seven flagships

Christopher Columbus had only three small ships to discover the New World, so at least we can be numerically impressed by seven flagships, presented like this:

The Commission is putting forward seven flagship initiatives to catalyse progress under each priority theme:

– "Innovation Union" to improve framework conditions and access to finance for research and innovation so as to ensure that innovative ideas can be turned into products and services that create growth and jobs.

– "Youth on the move" to enhance the performance of education systems and to facilitate the entry of young people to the labour market.

– "A digital agenda for Europe" to speed up the roll-out of high-speed internet and reap the benefits of a digital single market for households and firms.

– "Resource efficient Europe" to help decouple economic growth from the use of resources, support the shift towards a low carbon economy, increase the use of renewable energy sources, modernise our transport sector and promote energy efficiency.

– "An industrial policy for the globalisation era" to improve the business environment, notably for SMEs, and to support the development of a strong and sustainable industrial base able to compete globally.

– "An agenda for new skills and jobs" to modernise labour markets and empower people by developing their of skills throughout the lifecycle with a view to increase labour participation and better match labour supply and demand, including through labour mobility.

– "European platform against poverty" to ensure social and territorial cohesion such that the benefits of growth and jobs are widely shared and people experiencing poverty and social exclusion are enabled to live in dignity and take an active part in society.

Not content with its flagship flotilla, the Commission wants shipyards to mushroom all over Europe, with the European Council as the naval architect and master shipbuilder (page 6):

The European Council will have full ownership and be the focal point of the new strategy. The Commission will monitor progress towards the targets, facilitate policy exchange and make the necessary proposals to steer action and advance the EU flagship initiatives. The European Parliament will be a driving force to mobilise citizens and act as co-legislator on key initiatives. This partnership approach should extend to EU committees, to national parliaments and national, local and regional authorities, to social partners and to stakeholders and civil society so that everyone is involved in delivering on the vision.

The Europe 2020 priorities, headline targets and flagship initiatives were then presented in detail from page 10 in the Commission proposal.

Will the flagship flotilla deliver the goods, or is it going to going to run aground like the Lisbon armada?

Ralf Grahn

Europe 2020 strategy: Three flavours of growth (priorities)

Like Phoenix, from the ashes of the Lisbon strategy Europe rises on the wings of the EU 2020 strategy, we are told. The European Council, which in today’s Europe has taken the place of the Delphic oracle, endorsed the following priorities at its spring meeting:

The new strategy will focus on the key areas where action is needed: knowledge and innovation, a more sustainable economy, high employment and social inclusion.

Conclusions of the European Council 25/26 March 2010 (document EUCO 7/10; page 2)

The Commission proposal used a few more words in its summary to describe the three flavours on its growth menu (page 5):

Europe 2020 puts forward three mutually reinforcing priorities:

– Smart growth: developing an economy based on knowledge and innovation.

– Sustainable growth: promoting a more resource efficient, greener and more competitive economy.

– Inclusive growth: fostering a high-employment economy delivering social and territorial cohesion.

Commission: EUROPE 2020 - A strategy for smart, sustainable and inclusive growth; Brussels, 3.3.2010 COM(2010) 2020 final (35 pages)

At least this far, kitchen chef Barroso had succeeded in designing a menu modern in outlook and pleasing to each palate.

The priorities, together with the headline targets and promised flagship initiatives, were then presented in more detail from page 10.

Ralf Grahn

Saturday, 19 June 2010

Excessive deficit procedure: Finland

The previous blog post, Excessive deficit procedure: Denmark, looked at the relevant summaries of EU legislation and found that they need to be updated.

We check if the Directorate-General for Economic and Financial Affairs (DG ECFIN) offers updated introductory materials.

The European Union is about to start an excessive deficit procedure (EDP) concerning Finland, one of the three countries in the latest batch.

We offer links to the relevant documents, and assess the timely publication of legal materials on the Eur-Lex portal in this case.


The European Commission’s Directorate-General for Economic and Financial Affairs (DG ECFIN) offers a number of web pages:

The web page Stability and Growth Pact describes the basic features, and it explains the meaning of the preventive arm and the dissuasive arm (the excessive deficit procedure, EDP) of the SGP, including possible sanctions for euro area members.

The web page Stability and convergence programmes offers an overview of the annual programmes and how they are monitored. It could be clearer with regard to the different programmes: Eurozone countries prepare stability programmes (to maintain fiscal balance), whereas the other member states are seen as on a course towards fulfilment of the criteria for euro adoption, and they submit convergence programmes.

Excessive deficit procedure is a web page, which briefly explains the EDP and mentions the trigger (reference) values: the deficit-to-GDP ratio of 3% and the debt-to-GDP ratio of 60%. The possibility to impose sanctions on euro area members, but not on countries still on the convergence path, could have been explained more clearly.

There is also a web page Relevant legal texts and guidelines, which is helpful for those who want to dig deeper.


Subject to the remarks already made, my impression is that the introductory web pages offered by DG ECFIN are adequate to the needs of the general reader, who wants information at a glance. The pages have been updated fairly recently, and they take account of the Lisbon Treaty.

ECFIN offers few thrills of web design, but those who want to find news and more detailed factual information are fairly well served.

Excessive deficit procedure Finland

We can find updated information about the excessive deficit procedure initiated against Finland and two other countries on the ECFIN web pages.

However, for the sake of clarity and transparency, this blog argues that legal information concerning the European Union should be published centrally and in a timely manner on the legal portal Eur-Lex.

Formally, the Commission decided to institute the EDP regarding Finland on 15 June 2010. Three SEC documents have already been published on Eur-Lex (in the working languages of the Commission: English, French and German):

COMMISSION OPINION on the existence of an excessive deficit in Finland; Brussels, 15.6.2010 SEC(2010) 745 final

Proposal for a COUNCIL DECISION on the existence of an excessive deficit in Finland; Brussels, 15.6.2010 SEC(2010) 746 final

Recommendation for a COUNCIL RECOMMENDATION with a view to bringing an end to the situation of an excessive government deficit in Finland; Brussels, 15.6.2010 SEC(2010) 747 final


The Commission recommends that the Council adopts the following recommendation addressed to the Republic of Finland:

(1) Recognising that Finland’s budgetary position in 2010 resulted from measures amounting to 1.8% of GDP in 2009 and 1.1% in 2010, which is an adequate response to the downturn and were in line with the European Economic Recovery Plan principles, as well as from the free play of automatic stabilisers, the Finnish authorities should put an end to the present excessive deficit situation at the latest by 2011.

(2) The Finnish authorities should bring the general government deficit below 3% of GDP in a credible and sustainable manner. Specifically, to this end, the Finnish authorities should:

(a) implement the fiscal measures in 2010 as envisaged in the latest update of the stability programme, while ensuring that the planned breach of the 3%-of-GDP reference value would remain contained and temporary;

(b) ensure a fiscal effort of at least ½% of GDP in 2011;

(c) specify measures to ensure that the planned correction of the excessive deficit in 2011 is secured.

(3) The Council establishes the deadline of [13 January 2011] for the Finnish government to take effective action to specify the measures that will be necessary to progress towards the correction of the excessive deficit. The assessment of effective action will take into account economic developments compared with the economic outlook in the Commission services' spring 2010 forecast.

The Finnish authorities should report on progress made in the implementation of these recommendations in a separate chapter in the forthcoming updates of the stability programme until the abrogation of the excessive deficit procedure.

Ralf Grahn