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The European Semester, rule of law and process of federalization of the EU system

One of the most visible trends in the development of the European Union is the process of establishing and consolidating its political system, which has been ongoing for decades. By introducing and modifying subsequent institutions, the Union is acquiring newer features in this area and is becoming an entity with increasingly clear characteristics of a state entity. This is done gradually, through subsequent changes to the applicable law, but also under the influence of political phenomena accompanying European integration. The result is an increasing degree of integration of the Union as a political body and, at the same time, an expansion of the scope of authority vested in its bodies. This is how an entity is formed. Several years ago Henry Kissinger rightly wrote that from a constitutional point of view it is something between a state and a confederation operating through meetings of ministers and a common bureaucracy[1].

Recalling this fact, it should be remembered that the idea of federalization of Europe had supporters long before the creation of the European Union. The concept of establishing a European state was already formulated in European salons by the Austrian politician Richard von Coudenhove-Kalergie, who presented the main theses of thinking about this political project in his famous book entitled „Paneuropa”[2]. This author was followed by many outstanding representatives of the era, including French Prime Minister Artysicides Briand, an adamant enthusiast of this direction of change[3]. During the post-war unification of Europe, federalization was considered by the founding fathers of the European Communities, including Jean Monet, and later, in the 1980s, politicians associated with Altiero Spinelli tried to implement this concept[4]. Although the efforts undertaken in this field did not bring the expected results, they were also, especially in the case of Spinelli, irrelevant for further reforms of the EU’s institutional system. As is commonly known, their results were subsequent treaties that bonded the Union and tightened the bonds of the states constituting it. As a result of the adoption of these acts, there was a process of shifting the center of gravity of power from the Member States to the European Union, which automatically resulted in the strengthening of the community management mechanisms at the central level. This was combined with the gradual appropriation of Member States’ competencies, which was not supported by treaties, known as „competence creep”. These activities – let us recall – were a common phenomenon in the functioning of the European Union and concerned various spheres of the institutional activity of this organization. The scope of their occurrence meant pro-federal changes in many areas and resulted in a multi-faceted deepening of integration processes within the Union.

European literature indicates several basic forms of „competence creep” and thus highlights the scale of the phenomenon. According to the findings, these are:

  1. adopting indirect legislation, i.e. adopting EU acts in areas where direct EU legislative competences are limited;
  2. shaping judicial decisions, i.e. issuing judgments of a law-making nature, including judgments declaring national provisions inconsistent with EU law in situations where these provisions fall within the scope of the autonomy of a Member State;
  3. concluding international agreements that have a profound impact, especially in the area of ​​trade relations, on the rights of Member States in areas where the legislative competences of the European Union remain limited;
  4. creating and applying soft law in implementing European policies towards member countries;
  5. shaping the process of parallel integration, consisting in the conclusion by individual governments of international agreements that do not formally fit into the institutional framework of the European Union, but due to their content facilitate the implementation of EU policies and the use of EU instruments, and also – from the point of view of our considerations – are of key importance; 5) economic management, which allows for the creation of EU policies and, thanks to them, exerting influence on these spheres[5].

Indeed, economic governance was and still is perceived as one of the factors contributing to the federalization of the European Union system. Basically, the federalization processes taking place in this context have their origins in the adoption of the Maastricht Treaty of 1992. It was this treaty that „(…) established the architecture of the Economic and Monetary Union as a prelude to the creation of the „euro”, accepting on the one hand the creation of the monetary union with the centralized monetary policy and euro as the single currency, and on the other hand leaving the implementation of the economic policy within the competence of the Member States of the EU”[6]. Economic governance understood in this way was to refer to „(….) the system of institutions and procedures established to coordinate economic policies to achieve Union objectives in the economic field”, and was also to include „(…) an elaborate system of policy coordination and surveillance of Member States’ economic policies. By default, the purpose of its establishment was related to the creation of „(…) the principles of monitoring, prevention and the correction of imbalances that could pose risks for Member States’ economies”[7].

Recognizing the real possibilities of expanding the Union’s power and building its system within the framework of economic governance, EU decision-makers later introduced further instruments to strengthen this mechanism. This trend was also reflected in the decision to establish the European Semester, which – as is widely known – arose against the background of the financial and banking crisis of 2009 and was the result of reflection by Brussels decision-making circles that Member States do not have sufficient resistance to the emerging global economic threats and that strong tools are therefore needed at the EU level to monitor national progress on economic and fiscal policies. Let us recall here that the European Semester – as a mechanism aimed at preventing or at least mitigating the effects of similar shocks in the future – is an annual cycle of macro-economic, budgetary and structural policy coordination and surveillance taking place at the EU level that was adopted in 2010 and started in 2011. “The Semester aims to tackle economic imbalances by giving European Union (EU) Member States country-specific recommendations (CSRs) regarding their public budgets as well as their wider economic and social policies with a view to enabling better policy coordination among Euro Area member states „. It brings ” (…) together and synchronized several procedures into an integrated annual framework to surveil and coordinate fiscal, macroeconomic and structural policies across the Economic and Monetary Union (EMU)” [8]  and ” (…) aims to tackle economic imbalances by giving European Union (EU) member states country-specific recommendations (CSRs) regarding their public budgets as well as their wider economic and social policies with a view to enabling better policy coordination among Euro Area member states” [9].

The instruments for influencing Member States from the EU level are the above-mentioned recommendations. Thanks to them, the Union gains the opportunity to impose its concepts in the field of economic governance on national authorities, thus assuming the role of an entity co-shaping national policies in this area. Interestingly, it does so without strictly adhering to the thematic framework resulting from the documents adopted in this regard. The recommendations include not only comments on economic and social policy but also suggestions aimed at drawing attention to problems with the so-called rule of law. The latter – as previous experience shows – refer to countries that Brussels believes have problems with systemic respect for this principle.

The practice of the political system determines that the recommendations in question are considered an effective tool for exerting influence by EU institutions. Numerous studies demonstrate quite well that these recommendations are implemented by Member States to a certain extent, although not to the full extent[10]. If so, it is probably impossible to talk about maintaining full national sovereignty in the field of economic policy[11], but on the contrary – the statement about strong interference in this sovereignty is justified. This is especially true given that these recommendations have no clearly defined subject boundaries and can relate to basically any issue in the area of economic and social policies. Sasha Garben writes eloquently about this, and she is not fooled by the non-binding nature of the recommendations in question. The author says: “The CSRs, adopted by the European Council on the proposal of the Commission, are non-binding and thus formally leave the final decision to the national level. Nevertheless, the political pressure they exert on national standards should not be underestimated, especially as they take place in a structured framework with an eventual possibility for sanctions. Admittedly, CSRs are followed only in a minority of cases, perhaps because national parliaments can indeed refuse to implement them legally. Nevertheless, governments can play into a lack of transparency and sense of urgency to (selectively) push through the implementation of the reforms, arguing that <<international obligations>> have to be met, perhaps pointing at the threat of sanctions or reduced EU-level funding”[12].

Reference

[1] H. Kissinger, Porządek światowy, Wołowiec 2017, p. 93.

[2] R. von Coudenhove-Kalergie, Pan-Europa, Racibórz 2005.

[3] See: S. Cat-Mackiewicz, Polityka Becka, Kraków 2009.

[4] See: D. Matusik, Koncepcje federacji europejskiej a europejskie procesy integracji (maszynopis rozprawy doktorskiej), Katowice 2009, p. 117.

[5] S. Garben, Competence Creep Revisited, „Journal of Common Market Studies” 2017, p. 206-213

[6] Economic governance framework, European Council/Council of the European Union, https://www.consilium.europa.eu/en/policies/economic-governance-framework/, (available: 12.09.2023).

[7] Ibidem, (available: 12.10.2023).

[8] F. Mollet, Rethinking EU economic governance: The European Semester, Policy Brief. Europe’s Political Economy Programme, p. 1; https://www.epc.eu/content/PDF/2021/EU-Governance_PB_v4.pdf (available: 15.09.2023).

[9] V. D’Erman and others, Measuring economic reform recommendations under the European semester : ‘one size fits all’ or tailoring to member states?, „Journal of contemporary European Research” 2019, vol. 15, no. 2, p. 194.

[10] G. Wronkowska, J. Rosiek, A. Witoń, op. cit., p. 67-70.

[11] O zachowaniu suwerenności narodowej państw członkowskich w sferze gospodarczej pisano w kontekście rozwiązań i instytucji economic governance wprowadzonych jeszcze przez pojawieniem się Semestru Europejskiego: S. Deroose, D. Hodson, J. Kuhlmann, The Broad Economic Policy Guidelines: Past, Present and Future, International Economics Programme 2005, IEP WP 05/02 , p. 1; file:///C:/Users/Grzegorz/Downloads/The_Broad_Economic_Policy_Guidelines_Past_Present_.pdf (available: 31.10.2023).

[12] S. Garben, Competence Creep Revisited, „Journal of Common Market Studies” 2017, vol. 57, no. 2, p. 217.

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