Conference report on the Workshop ‘Socio-Economic Governance in the EU since the Crisis: The European Semester in Theory and Practice’

The EU’s institutional architecture for economic and social governance has undergone a series of far-reaching changes since the onset of the euro crisis. The ‘European Semester’ – a single annual cycle of policy coordination – lies at the heart of this new architecture. It provides a governance schedule based on which the Commission, the Council and the European Council set priorities for the European Union and monitor corresponding policy action within a comprehensive framework of socio-economic governance. ¹ Against the backdrop of the broader strategic orientations of the Europe 2020 strategy, ² the European Semester thus brings together a wide range of EU governance instruments with different legal bases (including the Stability and Growth Pact (SGP), the Macroeconomic Imbalance Procedure (MIP), the Fiscal Compact/Treaty and the Integrated Guidelines for the coordination of economic and employment policies). Through this process, EU institutions have gained a more visible and intrusive role than ever before in scrutinizing and guiding national economic, fiscal and social policies, especially for those in the eurozone, but also for those of the EU-28 at large. In this context, 2015 has been a time of reflection for policy-makers and administrators. It saw the mid-term review of the EU’s multi-annual strategic framework Europe 2020 and further adjustments of the European system of economic governance. ³ These reflective endeavours by practitioners, including the social partners, ⁴ have been complemented by corresponding evaluations in the academic field. ⁵

In a similar spirit, the Amsterdam Centre for Contemporary European Studies (ACCESS EUROPE) hosted a workshop on ‘Socio-Economic Governance in the EU since the Crisis: The European Semester in Theory and Practice’ on 11–12 December 2015. ⁶ It was co-organized by Professor Jonathan Zeitlin (Scientific Director of ACCESS EUROPE) and Professor Amy Verdun (University of Victoria, Canada, and ACCESS EUROPE Visiting Scholar). The workshop formed part of an ongoing research cooperation (follow-up to an earlier event in April 2014). ⁷

The aim of the workshop was both to enhance an in-depth understanding of the complex institutional arrangements and governance processes assembled under the European Semester and to promote outreach through information-sharing and increasing dissemination among the wider public. For that purpose, three sets of questions were tabled that structured the discussions of the two-day event. A first set of questions concerned the relationship between EU institutions and the Member States (‘intergovernmentalism versus supranationalism’). Another set addressed the nature of the European Semester as a governance process and its implications for democratic politics (‘technocracy versus democracy’). A third and final series of questions dealt with the nature and dynamics of the EU’s emerging socio-economic governance architecture (‘economic versus social Europe’). The workshop provided an interactive set-up involving scholars and students from various disciplines (including politics, law and sociology), as well as policy practitioners (including high-level representatives of the European Commission Directorates-General for Employment, Social Affairs and Inclusion (DG EMPL) and Economic and Financial Affairs (DG ECFIN)). The working method generously allowed for constructive discussions and mutual learning exchanges between scholars and practitioners. This report provides an overview of the topics addressed and some of the highlights of the discussion.

The deliberations started off by exploring the dynamics and implications of multi-level decision-making in the EU in the context of socio-economic governance. Dermot Hodson (Birkbeck, University of London, UK) analysed the MIP in light of the evolution of EU economic policy coordination. He pondered the question whether the MIP provided a threat to EU integration by focusing his assessment on the criterion of ‘legalization’ as developed in international relations theory and EU integration studies. James Savage (University of Virginia, USA) examined – on the basis of three case studies – how the politics of asymmetric information affected the enforcement of the European Semester through the MIP and the Excessive Deficit Procedure (EDP). One case study in particular, the Spanish case concerning Valencia’s misrepresentation of statistics that provoked the imposition of the first financial sanction in the history of the Economic and Monetary Union (EMU), sparked vivid discussion of the extent to which it could serve as a precedent. ⁸ Another important asymmetry was observed by Uwe Puetter (Central European University, Hungary) who analysed the leadership functions assumed by the European Council and the Council in the context of increasing high-level EU policy coordination of socio-economic issues. Debate ensued regarding the uneven institutional development within different formations of the Council which promoted the selective empowerment of certain national actors at domestic level (for example, finance ministers). Also, the problem of horizontal coordination – integrating policy recommendations and implementation across different issue areas (cross-sectoral) – was recognized, while its relevance was highlighted in particular for the eurozone (for example, the limited constellation of the Employment, Social Policy, Health and Consumer Affairs (EPSCO) Council in this respect). Finally, Amy Verdun examined the role and potential of the Five Presidents’ Report in deepening and enhancing EMU. While the report demonstrated ‘bold leadership’ potential in terms of putting forward specific policy priorities, it was considered to have failed (so far) in providing a concrete roadmap for further reform.

Another theme was the tension between technocracy and democracy in the operation of the European Semester. Three thought-provoking contributions were presented which met with lively debate. Kenneth Armstrong (University of Cambridge, UK) presented an initial research design for the study of national independent fiscal bodies, considered an important institutional innovation of the EU socio-economic governance framework. Could such (new) domestic institutions – based on the (institutional) incentives from European level – provide leverage for ‘social messaging’ capable of enhancing democratic decision-making on socio-economic issues? Further questions, such as those raised by Professor and former Belgian Social Affairs Minister Frank Vandenbroucke, concerned this innovation’s implications for the broad variety of existing national structures delivering independent fiscal and (socio-)economic advice. Moreover, the role of national parliaments and the European Parliament in euro governance, and the European Semester in particular, was critically illuminated from various angles. Ben Crum (Free University of Amsterdam, the Netherlands) considered the difficulties of establishing political accountability in this context, pointing to the risks of depoliticization. And Mark Hallerberg (and co-authors, ⁹ Bruegel, Brussels) pointed to the peculiar strength and alertness of eurosceptic national parliaments as factors that may actually enhance national (parliamentary) awareness of and engagement with the European Semester and its domestic impacts.

Finally, two more contributions dealt with the workshop’s third dimension, the tension between the ‘economic’ and the ‘social’ in EU governance. Sonja Bekker (ReflecT, Tilburg University, the Netherlands) questioned the evolving content and role of the EU’s country-specific recommendations (CSRs) in the European Semester. Meanwhile, Jonathan Zeitlin (University of Amsterdam, the Netherlands) and Bart Vanhercke (European Social Observatory, Brussels) intimated – as maintained in the past – both the ‘socialized’ nature of EU economic governance and the socializing impact of the European Semester. They consider that the European Semester has never been ‘more social’ than it is today. From a historical perspective, that is certainly true given the amount of novel features and social references in the EU’s enhanced infrastructure of policy coordination and multilateral surveillance. At the same time, however, doubts may arise concerning the extent to which the social elements of EU socio-economic governance are merely a reflection of ‘symbolic politics’. ¹⁰ Indeed, apprehensions about ‘competence creep’ may, on the one hand, be justified considering the expansive practice of supranational policy steering in pursuit of fiscal rules and economic objectives that seems to be encroaching upon national (more democratically legitimate) prerogatives to regulate social and employment matters. On the other hand, on that view the problem seems more exacerbated rather than amenable to solution. Such a perception, too, may omit important nuances that characterize today’s dynamic relationship between the EU institutions and the Member States in regulating socio-economic matters. ¹¹ As maintained by practitioners and scholars present, the EU’s social competences have developed considerably over the past 25 years and, in principle, do provide room for manoeuvre/policy improvement within the existing constitutional framework – even (at least, to some extent) without legal reform. ¹² The key question, of course, is how these dynamic structures can be improved upon in order to (further) resuscitate the ‘social’ vis-à-vis the ‘economic’ in European governance and whether current endeavours are enough.

Indeed, several participants expressed optimism about the existence of a palpable ‘window of opportunity’ that has emerged from the current state of affairs in EU socio-economic governance that should not be allowed to go to waste, ‘especially by actors favouring the enhancement of Social Europe’. Compared with 1992, Verdun maintained, the EU’s contemporary context – including the ongoing euro crisis – appeared more favourable (than ever) with regard to generating ‘real convergence’ and the social benefits this would entail. Undoubtedly, the proposed development of a ‘European pillar of social rights’ that the European Commission is currently working on bears some promise in that regard. ¹³ That such a promise will indeed be realized also depends – as the Amsterdam workshop has demonstrated – on the impact of the EU’s complex institutional processes, in which various political dynamics may frequently lead to compromise or unintended policy outcomes. In that context, it was furthermore proposed that more insights could be gained from extending the research agenda – for example, by paying more attention to the concrete role that social partners (may) play in the ex ante and ex post implementation of the European Semester. ¹⁴