Convention Speak - what it means inside the EU

It's one of those times in EU history again - a new vocabulary and buzz words to adapt to and a spate of anti-Brussels messages spread across the UK Sunday tabloids. But what does all this mean in our daily business context? How will the preliminary conclusions on the current state of play on the Convention impact your work?

The Convention on the Future of Europe is the most wide-ranging institutional reform of the European Union since the signing of the EU Treaties in Rome in 1957. Significant changes in the institutional system, legislative procedures and areas of EU competence will impact how industry will take business decisions.

Below we briefly examine certain aspects that seem of significance at this stage.

A more important role for national parliaments - making good the democratic deficit?
National parliaments might be given the right to issue an opinion on the subsidiarity aspects of specific proposals in particular to contest the relevance of a proposal in view of the subsidiarity principle. This impact is likely to be great in such policy areas as Environment. It is clear that more focus will have to centre on national parliaments, which can be a source of information on national government's positions but also act as a stakeholder in a communication campaign.

Economic governance - a new competence ?
Most measures presently available from the Working Group's document seem to allow for greater power to the European Commission or Parliament. The proposal for more qualified majority voting and crucially for taxation could have considerable consequences especially to business in that it might ultimately affect tax harmonization across the EU. So, not only is sovereignty reduced but also businesses operating EU wide will be impacted.

External action - the EU on the international stage
Measures have been included in the Convention which aim to strengthen the voice of the EU on an international stage; e.g. in international fora, conferences etc. There is certainly a need to provide legal clarification to the external competencies of the EU in this regard (though the granting of a legal personality would do away with most stumbling blocks). Overall, the EU will be able to play a greater role in international trade discussions. If the EU achieves enhanced consistency between its role in Common Foreign and Security Policy and that in Trade Policy, a possible extension of this competence is already considered to international diplomacy.

Simplification of the co-decision procedure. again?
Few changes are in fact planned to the procedure though enlargement will increase the complexity of dealings at conciliation stage as the committee will need to bring together 25 representatives of the Council and the equivalent number of MEPs with the Commission playing a mediating role. However, we well know that the conciliation committee formalises agreements reached in trilogies in the wings of the formal procedure. It is expected that the number of trilogues will increase thereby spurring the institutions on to reach consensus earlier: at first reading stage as much as possible. Bear in mind that policy proposals will maybe be increasingly going through the "rapid" adoption procedure.

Classification of and additions to the competencies - a basis to further extension?
Contrary to expectations, the Convention fathers are not planning a momentous expansion of EU competencies. However, employment, industry and public health are to be classified as complementary competencies on which the EU can either adopt nonlegally binding measures or binding measures only for financial support programmes.

The Convention has also examined the possibility of developing a principle of choice of a legal basis in relation to the "centre of gravity" of the action. This principle would lead to the choice of a specific legal basis, although its application might be subject to interpretation. Finally, there is a possibility to derogate by unanimity only from the principle of free movement of goods.

Towards a Social Europe. whatever that means in your culture?
No conclusion has yet been reached by the working group but an extension of QMV and co-decision to certain areas of social legislation has been debated. More importantly an attempt at defining the role of social partners throughout the EU has been made. If enacted this flurry of measures is only likely to underline 'social' disparities between Member States and might lead business to make significant investment decisions.

The above is but a light overview of a very heavy procedure to be applied to an even weightier future new Europe. Overall, for companies it is increasingly important to understand the ever changing features of the "European Entreprise" in order to reduce the risks involved in the planning of future business strategies.

For further information please email: info@kelleneurope.com