The European Commission moves - more than 1 1/2 years after the first signs of the emerging financial crisis - slowly into gear. This week it presented its Communication on the forthcoming meeting of the Heads of state and government on 19th and 20th March in Brussels. Result: a patchwork rug made up of a wide range of individual measures, as usually nicely wrapped and - as it has happened in the past - without great ambitions for the social sector.
After a whole series of summit meetings of the European Heads of State and Government, professional observers are already talking about Europe having “caught the summit bug” and some Member States also voiced their discontent about the frequent meetings, which would not always result in groundbreaking decisions. For a change, a regular meeting is on the agenda on 19th and 20th March, the so-called “Spring meeting” of the Heads of State and Government.

New Communication provides overview of the measures to tackle the financial crisis
In preparation of this meeting, the European Commission has now published a new Communication under the title “Driving European Recovery”. The advantages of this Communication: it gives a very good overview of all initiatives and measures, which the European Commission has taken or is still planning in connection with the financial and economic crisis. And the list is quite long.

Ambitious plans for the financial markets, unfortunately too late
Example financial markets. Only last week, the high calibre group of experts around the Frenchman Jaques de Larosière, which was set up by the Commission, has published a report, which denounces very clearly the inadequate regulation in Europe and proposes a whole catalogue of measures. The Communication of the Commission is now taking up some points from the Larosière Report. The Commission, for example, talks about “unacceptable risks” in the European financial markets and would like to get an “ambitious reform” off the ground in 2009. Apart from the already submitted isolated proposals on rating agencies and capital requirements, regulation of the banks, proposals for hedge funds and private equity (scheduled for April), transparency in the derivative markets (scheduled for June) and improved financial reporting standards should take priority in the coming months. The supervision of the banks should also be improved. Here, the supervisory authority comes to the conclusion that the current system of national supervision has failed and proposes supervisory councils made up of financial supervisors from several Member States. The Commission also adopts the proposal to set up a new committee at the European Central Bank, which collects and evaluates information about all risks in the entire financial sector and serves as an early warning system. The comprehensive package on the financial supervision in Europe will be presented before the end of May and approved by the Heads of State and Government at their meeting in June; any concrete regulatory steps will be taken in autumn of this year. Interesting in this connection is also the issue of manager salaries: in April a (legally non-binding) proposal on remunerations in the financial sector will be passed, followed by a legislative proposal in autumn within the scope of the package on financial regulators.

Lots of packaging concerning the real economy, lots of old ideology regarding structural reforms

The chapter on the real economy has relatively little concrete or new to offer. Once again, the Commission presents itself as a “wrapping artist”, just adding up economic support measures taken by Member States and selling them as a European programme. A relapse into the old market-liberal diction of the Barroso Commission with respect to the internal market. Once again a broad hint is given: structural reforms must be - crisis aside - even more accelerated. The Member States should put no obstacles in the way of companies which restructure or go bust. And “state interventions in our national economies” should after the crisis be pushed back to “normal dimensions”. As if the public authorities had made a conscious choice of pumping tax money in banks on the brink of collapse.

Little new regarding employment and social policy
And finally the labour market and employment sector under the title “Supporting people in the crisis”: unfortunately, placed right at the end of the Commission Communication one can read that the “employment growth will be negative in the next 2 years”. An elegant shrouding of the fact that this year alone 3.5 million jobs will be lost in Europe and that EU-wide employment will rise to 10 % in 2010 - after a rate of 7 % in 2007. Conclusion of the Commission: the “short-term pain” triggered by the crisis will be immense but the “successful structural reforms” on the labour markets will make a speedier recovery after the crisis easier. It does, however, not disclose where this optimism is coming from. The ones who are mostly affected are young people, migrants and people with “short term employment contracts”. True to form, the labour market and socio-political recipes of the Commission then amount to nothing more than a list of measures in the Member States and the promise of promoting “mutual learning and exchanging good practices”.

Next meeting of the Heads of State and Government in May on the subject of employment
Finally the Employment Summit of the Heads of State and Government scheduled for May, which will be prepared in cooperation with the social partners also gets mention. According to the wishes of the Commission, it will take stock of the current situation and decide on concrete measures. It also specifies the targets of the summit: structural reforms for more flexible labour markets; a concerted approach to reduce the social costs of the crisis and a new consensus with the social partners what modern social policy should look like. The Commission plans to arrange some workshops in preparation of the summit until May where the Member states, social partners, NGOs and civil society can come together to discuss these issues.

For further information:

Press Release of the European Commission

Communication Paper of the European Commission on the Spring Meeting of the European Council

Annex to the Communication Paper of the European Commission on the Spring Meeting of the European Council