Internal policies II: Economic and Monetary Union and Social Policy

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Internal policies II Economic and Monetary Union
and Social Policy

• Prof. Andreas Bieler

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Structure of lecture

• The History of EMU
• The mechanisms of EMU
• The normative underpinning of EMU
• EU Social Policy

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I. The History of EMU

• First attempts in the 1970s
• The European Monetary System in 1979
• France within the EMS
• Important lesson for assessment of EMS as a
  whole the EMS led to a convergence of national
  economic policies around a neo-liberal economic
  programme, partly due to the direct pressure by
  the EMS, partly due to conscious political
  decisions.

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3. Economic and Monetary Union

• 1991 EMU is adopted as part of the Treaty of
  Maastricht
• Three stages
• Stage 1 preparation
• Stage 2 harmonisation
• Stage 3 implementation
• Final steps towards EMU

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II. The mechanisms of EMU

• 1. The convergence criteria
• the inflation rate is not more than 1.5 per cent
  higher than the average of the three lowest
  inflation rates in the EMS
• the long-term interest rate is not more than 2
  per cent higher than the average observed in the
  three low inflation countries
• a country has not experienced a devaluation
  during two years preceding the entrance in the
  union
• the government budget deficit is not higher than
  3 per cent of its GDP
• the government debt is not higher than 60 per
  cent of its GDP

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The mechanisms of EMU

• 2. The tasks of the European Central Bank (ECB)
• 3. The accountability of the ECB
• 4. 1997 Stability and Growth Pact
• Excessive deficit procedure
• Multilateral surveillance procedure

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III. The normative underpinning of EMU

• loss of national economic policy autonomy
• neo-liberal economic policy is institutionalised
• EMU is part of a disciplinary neo-liberal
  project,
• repercussions for economic and employment
  policies

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The normative underpinning of EMU

• new constitutionalism
• trade unions become sidelined in the economic
  policy-making process
• EMU serves mainly the interests of transnational
  capital

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IV. EU Social Policy

• 1992 Social Protocol attached to the Treaty of
  Maastricht
• extension of Community competence in social
  policy area
• introduction of QMV in these areas
• possibility for Commission to ask social partners
  directly to negotiate a directive on a particular
  issue
• the new British Labour government signed up for
  the Social Chapter as part of the Treaty of
  Amsterdam in 1997

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EU Social Policy Results of social dialogue.

• 1996 Parental Leave Directive
• 1997 Atypical Work/Part-time Directive
• 1999 Fixed-term Work Directive
• 2002 voluntary Agreement on telework between
  social partners
• 2004 voluntary Agreement on work-related stress
• 2007 voluntary Agreement on harassment and
  violence at work

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EU Social Policy Amsterdam Employment chapter.

• focus on labour market flexibility as a result of
  monetary and economic policy focusing on low
  inflation
• co-ordination of national employment schemes
• In sum, common policies in the area of social
  policy and employment are much weaker than in the
  monetary and economic fields.
• Social policy as a part of a market-building
  exercise rather than as protective measures
  against market forces (see role of ECJ)?
  (Leibfried 2006).