Clash on way as economic governance splits Convention

Date: 07/11/02

By Dana Spinant

THE Convention on the future of the EU is set for a major clash between supporters of a 'social' Europe and those advocating a 'neo-liberal' approach to economy.

Findings of the working group on economic governance, due to be discussed by the Convention's plenary today (7 November), will highlight the forum's first serious failure to put forward proposals to improve existing mechanisms within the EU.

The group, chaired by MEP Klaus Hänsch, a member of the Convention's praesidium, has been split over how best to improve coordination of economic policies, and in particular over the role of the Commission.

It is the first Convention group that has failed to put forward a single project: instead, its conclusions present a majority and a minority view.

The group acknowledges that more coordination between economic policies of member states is needed, but a majority was reluctant to hand over more powers to the Commission.

Hänsch admitted during the last plenary (28-29 October) that the group was unable to propose any 'thorough structural or institutional reform', given the split between those wanting to maintain the status quo and supporters of a stronger Commission role.

Some members suggested that the Commission should be given the right to make a formal proposal rather than a recommendation to the Council of Ministers on 'broad economic policy guidelines'.

However, if a formal proposal is made, unanimity would be required for major changes. Some said this would deprive member states of their powers over the guidelines.

Another battlefield has been taxation, with a split between those in favour of decision-making based on qualified majority voting and those insisting on unanimity.

However, a majority of the group felt that 'minimum standards' for an EU-wide tax should be introduced, without going into details what those standards should be.

The controversial debate on economic governance has also sparked divisions over the need to create a 'social Europe'. Following pressure from Convention members to set up a working group on social matters, a debate will take place today on whether social policy should be considered part of the Union's overall objectives.

Convention members will also address the question of whether current treaty provisions on social issues should be amended and the existing areas of competence extended, and whether the current provisions for the involvement of the 'social partners' - employers and trade unions - need to be amended.

The economic governance/social Europe debate will be the first real test for the Convention's ability to reach compromise.

This is also the first time the forum will address a concrete question of substance, after having discussed principles for eight months.

The Convention on the future of the EU is set for a major clash between supporters of a 'social' Europe and those advocating a 'neo-liberal' approach to economy.

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