A draft forwarded by the EU Council Secretariat to COREPER has been issued on 30 September 2008.
The substance is close to zero. One of the few "programmatic" statements in the text is the following:
In order to ensure a prudent fiscal stance throughout the cycle, recent experience suggests that work is needed to better take into account the effects of economic cycles, and of the related cycles in asset prices, on tax revenues.However, if this is what the Union plans to do, then one might ask what they have done so far? Ignored the fact that there are economic cycles?
But it becomes even worse when you read completely empty sentences like this:
[S]tructural reforms are key to all Member states. Recommendations made in this respect should be prioritized to fully take into account the economic situation. As structural reforms have an added value for the euro area as a whole, Ministers from the euro area also agree to devote specific attention to euro area recommendations.I wonder why ministers and diplomats spend time with such phrases, without any added value to the political process neither of the European Union nor for the member states. If you ask me whether this glass is half-empty or half-full, I need to answer: "There is no glass!"
When it comes to practical implications of the whole "coordinated EU response", I can almost only find that:
The EIB [the European Investment Bank] is proposing to raise its level of lending to SMEs to up to 15bn euros (+50%) in 2008/2009, including with a new product line allowing risk sharing with banks.For the rest, it is a useless piece of paper. Not that this is the only one, but it reminds me of my assessment of European leadership in financial questions made in yesterday's article on European leaders looking to the US.
Meanwhile, in another draft conclusion (update: link to revised version), the Council is discussing a new framework for executive pay. The draft conclusions say on the objective of a new regulatory framework on that issue (quote):
- The governance framework should be conducive to an effective control by shareholders
- Performance should be properly and comprehensibly reflected in executives' pay
- Performance criteria should provide the right incentives
- Care should be taken to prevent potential conflicts of interest for executives conducting mergers and acquisitions
But again, ministers will be able to pat themselves on the back, providing some useless framework which will make the people happy. And this is much better than solving actual problems, because solved problems don't vote.