Council waters down conclusions on researchers mobility

I have already commented on the first draft of the "Council conclusions on mobility and career of European researchers" in January and my verdict was very negative.

But now the Council plans to water down the issue I thought was one of the most important parts for mobile researchers - the portability of (supplementary) pensions - as we can see in the second version of the draft (highlights in the original):

WELCOMES TAKES NOTE of the intention of the European Commission to launch a Green Paper on developing a European Framework for adequate and sustainable pensions, and the ongoing work on the portability of supplementary pensions, including those of researchers, that will now be taken forward in this wider context on this issue [...]

INVITES the Commission, in particular, to drawing on the Green Paper process, to examine the need for a new proposal of a Directive initiative on portability of supplementary pensions, taking into account, among other considerations, the specific problems and needs of researchers as highly mobile workers as well as the experiences acquired by supplementary pension providers to overcome mobility disincentives.

Well, Council, why do you draw any conclusion if you don't welcome moves towards transferable pensions or support a concrete directive, erasing the only practical solution included in the original draft conclusions?

Read also: A pan-European pension fund for researchers

The financial crisis: French EU-Council Presidency on the financial architecture

The French EU-Council Presidency proposes to EU countries the setting-up of a specific global financial architecture that would be proposed during the World Summit in Washington on November 15.

In its Presidency note (PDF) published on Friday, 31 October 2008, the French presidency starts with complimenting the work of the European Union:

[T]he European Union displayed decisive leadership. It should remain proactive and ambitious so as to enhance the present financial architecture, in international fora and dialogues, as well as in the prospect of the Summit called for by our Heads of states and governments.

Then, it continues with the list of principles that the international financial architecture should follow:

1. Ensure that our frameworks are not excessively biased towards the short-term
   


2. Ensure increased responsibility of all the financial actors, notably along the credit chain,
   


3. Work towards properly enforced and extended transparency on all the segments of financial markets
   
4. Ensure more consistency across standard setters and across regulatory and oversight frameworks with a common aim to promote financial stability
   


5. Better anticipate risks and appropriate risk management based on an enhanced cooperation between institutions
   

Based on these principles ("values"), France is proposing the following objectives ("orientations"):

1. Strengthening and broadening the scope of global oversight of financial markets
   


2. Promoting a global approach of risks
   


3. Reinforcing the legitimacy of the global financial architecture so as to better promote coordination and crisis prevention
   


4. Addressing global challenges of the 21st century
   

And along these "orientations", a number of possible shortcomings are mentioned - inter alia, that financial mechanism in some countries are not appropriately adapted to the needs of the 21st century, and that in some countries oversight mechanisms do not cover all sectors of the economic and financial markets.

On the last page of the document, the French EU-Council Presidency proposes 11 possible commitments EU leaders could (!) agree on during their informal meeting on 7 November.

These draft commitments would then be proposed to the G20 world financial summit in Washington on 15 November:

1. Increase transparency on financial markets and take the necessary steps not to let any financial institution, market or jurisdiction outside the scope of regulation or oversight
   


2. Submit rating agencies that provide public ratings to registration and to governance rules and to appropriate monitoring of their activities
   


3. Draw up codes of conducts to address incentives to excessive risk taking in the financial industry, including through compensation schemes
   


4. Reconsider accounting and prudential standards where necessary to improve their mutual consistency, facilitate coordinated supervision and control, raise the margins of safety of the system and mitigate pro-cyclical effects
   


5. Regarding capital adequacy standards, harmonising capital definition to ensure an homogenous quality of capital
   


6. Promote proper risk-magement incentives regarding securitization, including considering the impact and effectiveness of requiring originators to retain a share of their issuances
   


7. Reinforce cross-border cooperation between supervisors and regulatory authorities, especially to oversee activities of cross-border groups
   


8. Promote a change of culture in the governance of financial institutions towards sustainable value creation. Risk control mechanisms in financial institutions should be enhanced and placed under direct responsibility of senior management, notably to prevent significant operational incidents in market operations
   


9. Review improvements in liquidity risk management and promote a consistent approach for cross-border groups
   


10. Encourage an internationally coordinated response to the macroeconomic challenges to come
    


11. Formulate concrete solutions to improve the international economic governance
    

These conclusions are too far reaching and too general at the same time. Although most of these do not really include legally binding instruments, they reach quite far and concern a wide range of market regulation, something many countries will not agree to, while other will demand even more concrete regulatory steps.

Taking into account the results of previous European Councils, we will end up with two or three main commitments and some weaker conclusions. Additionally, a number of working groups might be proposed, leaving results open.

On 15 November at the World Summit, these will be further watered down, and instead of commitments we will get conclusions of good will, non-binding, leading to further discussions that will bring results long after the crisis or way too late to have any influence on its outcome.

But the heads of states and governments will sell it as a big success - some will say they saved the market economy, others will tell their populations they contained the ambitions of uncontrollable markets.

Standard procedure. So, I am really looking forward to the evenings of November 7 and November 15...

A coordinated EU response to the economic slowdown (supplemented and updated)

Aparently, the Council of the European Union is preparing "Conclusions on a coordinated EU response to the economic slowdown".

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

That is something that will solve our problems... (Maybe not.)

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.

EU Council on Georgia: Weak conclusions (updated, 2x)

So far I only have the French version of the conclusions of the EU Council on Georgia [update: now they have been published also in English]. But they are massively weak. They are the smallest common denominator, as I have expected.

Georgia and Russia are barely mentioned in the text: The Russians shall go back to where they were before and the Georgians, too. The crisis is humanitarian in first place and the EU has to think about the reconstruction. There has to be an unspecified international mechanism to resolve the conflict. But no direct criticism of either side.

And Georgia's territorial integrity is referred to without directly mentioning Georgia (and/or its breakaway regions) in the same sub-clause with "territorial integrity":

"Une solution pacifique et durable des conflits en Georgie doit être fondée sur le plein respect des principes d'indépendance, de souveraineté et d'intégrité territoriale reconnus par le droit international et les résolutions du Conseil de Sécurité des Nations Unies."

From my own experience in diplomatic negotiations, this paragraph looks like a clear compromise between Eastern and Western EU countries, the former asking for a strong wording and the latter weakening this by putting the name to a place without direct linguistic connection, arguing that everybody knows what is meant by this.

And while some sources write that the EU wants to send a monitoring mission to Georgia, the conclusions only state that "the Council considers to engage, also on the ground, to support the efforts of the UNO and OSCE". "Considering" in diplomatic terms means that this issue remains on the agenda, not more and not less.

Altogether, this whole things looks pretty worthless as the result of an urgent EU Council meeting.

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Update

If you look at the participation list, it is interesting to see that, as the only country, the United Kinddom participated with two ministers (David Miliband and Jim Murphy) in the meeting. Malta only sent a diplomat, which usually indicates that members of the government or their deputes had better things to do...