Select Committee on European Union Fourteenth Report


20.  At the Lisbon European Council in March 2000, the EU set itself the goal of becoming "the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion".[28] To carry forward the social policy part of the strategy, the European Council formally introduced a new policy process termed the Open Method of Co-ordination, which attempts to assure a degree of commonality in policy approaches between Member States. In this process the Member States set out guidelines and quantitative or qualitative targets with common indicators to establish medium-term goals. Progress towards these goals is assessed against agreed targets by the Commission or the Council, on the basis of regular progress reports from the Member States. The Open Method of Co-ordination does not include coercive mechanisms other than peer group review and benchmarking. The process allows Member States to use national approaches to work towards common goals.[29]

21.  Most of our witnesses saw the Open Method of Co-ordination as an appropriate method of achieving policy co-ordination in areas where competence has not been assigned to the Union by the Treaties, or where the policy issues are sensitive and complex. It has been used extensively in the area of social policy, in particular in developing the European Employment Strategy, and has also been applied to other areas of social policy, such as pensions, health, social inclusion and immigration. The CBI noted that in many areas of social policy "benchmarking, exchanges of experience and peer review are more valuable and effective tools than legislation because they recognise that different countries face different problems that are not susceptible to top-down solutions".[30] On the other hand, several witnesses argued that the Open Method of Co-ordination should not be used as a substitute for EU legislation when this is required.[31]

22.  Experience suggests that the Open Method of Co-ordination can be successful in co-ordinating Member States' policies in the sensitive area of social policy. It allows social policy to complement and facilitate the aims of economic integration, without extending Union competence fully into areas where it may be difficult to reach consensus on EU regulation. This "lighter touch" approach is useful, and leaves open the possibility of translating policies agreed under the Open Method of Co-ordination into Community law at a later date when there is sufficient convergence and agreement over appropriate social policies. At the same time the Open Method of Co-ordination allows the Member States to maintain a high degree of control in sensitive social policy areas.

23.  The main issue in relation to the draft Treaty is whether the Open Method of Co-ordination should be given a specific Treaty base. In agreement with the Working Groups on Economic Governance[32] and on Simplification,[33] the "Social Europe" Working Group recommended conferring constitutional status on the Open Method of Co-ordination. This has also been welcomed by most of our witnesses.

24.  The argument for including the Open Method of Co-ordination in the Treaty is that in its current form it fits uneasily with the constitutional premises of democracy, transparency and accountability which underpin the Union. At present it is not easy to determine how policies are developed or who has influenced decision-making under the Open Method of Co-ordination. We endorse the Working Group's proposal to include the Open Method of Co-ordination in the Treaty as this would undoubtedly improve transparency and democratic accountability by identifying more clearly the parties involved in the various policy decision-making processes and by providing more detail of their respective roles.

25.  The Working Group further suggests that to increase accountability the Commission could discuss its analysis of Member State Action Plans with national parliaments and the European Parliament. The TUC called for more parliamentary scrutiny of this activity,[34] and we would welcome the involvement of national parliaments in the process. However, we believe that in addition national parliaments should have the opportunity to scrutinise any proposal for policy co-ordination at an earlier stage of the process. In order for national parliaments to fulfil their role of scrutiny effectively, it is important that they are able to take up any issues of concern with their governments before Action Plans are sent to Brussels. We believe that a procedure should be developed to enable this to take place. Such a process would significantly enhance democratic accountability of decision-making and bring national parliamentary scrutiny of decisions made through the Open Method of Co-ordination up to the scrutiny level of those made in accordance with more traditional procedures. The Local Government International Board drew attention to the importance of consultation during the formulation of policy as well as during the implementation phase, and this would fit in well with a procedure that enabled scrutiny at an earlier stage of the process.[35]

26.  The argument against making specific provision in the Treaty for the Open Method of Co-ordination is that undue formalisation would undermine its practical effectiveness. The Government point out that the Open Method of Co-ordination is a flexible tool which is used in different ways in different circumstances.[36] We believe this flexibility has contributed considerably to its effectiveness. Too much rigidity imposed on the rules of the process through Treaty inclusion could diminish its usefulness. However, Articles 125-130 EC, introduced by the Treaty of Amsterdam in 1997, which set out the legal base for employment policy in the EU, have provided a successful model for a formalised Open Method of Co-ordination. We therefore believe that inclusion of the Open Method of Co-ordination in the Constitutional Treaty need not limit its flexible application. It would be sufficient for the Treaty to include a clause setting out only general principles for the application of the Open Method of Co-ordination, allowing more detailed arrangements regarding institutions, participants and the legal status of outcomes to be determined on the basis of what would be most appropriate for specific policy areas. We believe that this would strike the right balance.

28   Presidency Conclusions: Back

29   E. Szyszczak, "The New Social Policy Paradigm: A Virtuous Circle?" 38 Common Market Law Review p 1125; and "Social Policy In the Post-Nice Era" in A. Arnull and D. Wincott, (eds) Accountability and Legitimacy in the European Union, Oxford, OUP, 2002. Back

30   p 10. Back

31   Including the Equal Opportunities Commission in relation to gender equality (p 11), the Commission (p 13), and the TUC (p 17). Back

32   CONV 357/02. Back

33   CONV 424/02. Back

34   p 17. Back

35   p 16. Back

36   p 2. Back

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