EU Budget Deal: Progress, from a Psychological point of View?

The EU institutions (Commission, Council and Parliament) reached a deal on the Multi-annual Financial Framework (MFF) that plans EU budget spending for 2014-2020. The MFF is not absolutely final since it has to pass a Parliamentary vote in September, but the deal does mark the end of the parliamentary revolt against the deal cut by national leaders. Politically, it's been a very charged budget, with arguments for cuts in a time of austerity, the European Parliament flexing its muscles over the budget, and the resignation of the parliamentary rapporteur on the MFF after the Irish Presidency mistakenly announced a deal last week.


So what's in the deal?

The cuts agreed by the Council remain: for the first time, the EU Budget will face a real terms cut of €85 billion, reducing the budget over the next 7 years to €960 billion. The focus on cuts meant that the parts of the budget prized by national governments were protected at the expense of more discretionary spending. The deal softens this by:

- Permitting the front loading of up to €2,543 million in 2014-15 for youth employment, research and Erasmus and apprenticeships and pro-SME policies, to be split as:
            - €2,143 million for youth unemployment;
            - €200 million for Horizon 2020, the EU Framework Programme for Research and Innovation;
            - €150 million for Erasmus; and
            - €50 million for COSME, a programme for the competitiveness of SMEs;
- Allowing for voluntary contributions by Member States by up to €1 billion to the €2.5 billion pot for aid for the most deprived;
- Unspent money will in an annual budget will be retained by the EU for spending on other projects, rather than being returned to the Member States;

- There is a concession to the idea of the MFF being subject to review and revision, but it seems very vague.

Is this, in the words of EP President Martin Schulz, progress "from a psychological point of view"?

The deal has shown that the EP has made some progress in shifting the MFF back towards some spending that is not the preserve of a national carve-up. There are national vetoes behind agricultural spending, cohesion spending and rebates, but no single Member State has a defining interest in EU projects that tackle unemployment, research or competitiveness. Can you imagine a British Prime Minister saying that they've cut some of the rebate in order to protect spending on unemployment programmes? The EP has demonstrated some value in trying to balance the budget more in the direction of spending for programmes that all of Europe benefits from, but that don't deliver specific national receipts of money.

That said, the concessions aren't a major victory for the Parliament - particularly on the aid for the most deprived and on MFF review, where the concessions appear so vague and woolly as to be practically meaningless. However, it is notable that a right-leaning European Parliament has not held out for reducing or eliminating the cuts to the EU budget. Despite the unprecedented level of power over the budget, the Parliament hasn't been as pushy as it might have been. From my point of view on the left, the deal is a defeat: it doesn't really deliver that much in terms of research and employment projects, and it buys into the idea of austerity despite the EU Budget not being in deficit. Cutting from common programmes to symbolically satisfy austerity is daft, and it undercuts further the ability of common European spending to offset, at least to some extent, the economic damage caused by national austerity.

Still, the fact that a right-wing EP largely endorsed the budget direction set by the European People's Party-dominated Council is not surprising, though it's another sign that the Parliament does act along ideological and party lines, which is important for the upcoming elections next year. Party and policy do matter in the EP.


Party Positions

The EP still has to vote in the MFF in September if the Framework is to be passed, so the positions of the European political groups matter. What are they?

Supporters:

The European People's Party (EPP; centre-right) probably support the deal, though they do not have a specific press release at the time of writing. Since they are the largest group in the Parliament and dominate the Council and national governments, they will probably support the deal. EPP parliamentary leader Joseph Daul supports current Eurozone/EU economic policy, but also insists on flexibility and a review clause in the MFF. I think EPP support can be assumed.

The European Conservatives and Reformists group (ECR; centre-right, but further right than the EPP), have welcomed the deal, and have complained that the European Parliament tried to obstruct it. Since they have got the cut in the budget they wanted, and the cut is a big win for David Cameron, they're not likely to vote against.

Qualified Supporters:

The Alliance of Liberals and Democrats (ALDE; centrist, and economically centre-right) have welcomed the deal, but want to secure some of the details before giving support, such as on the legal basis of the MFF (to secure the Parliament's power), on money for the Digital Agenda and on the review clause.

The Socialists and Democrats group (S&D; centre-left) have welcomed the deal as an improvement for youth unemployment schemes and Erasmus, but will discuss their position next week.

Though only qualified support has been given, I imagine that now that the EP has finished its negotiations as a whole and that there have been some concessions, these groups will largely support the MFF.

Opposition:

The European Greens (Green) have condemned the deal as only consisting of cosmetic changes when the overall budget is still being cut.

United Left (GUE-NGL; left-wing) also condemned the cuts to the budget, and hit out against EP President Schulz for only seeking agreement with the two biggest political groups in the Parliament (EPP and S&D), keeping the rest of the groups in the dark.


While these aren't firm voting stances by the political groups, it looks like there will probably be a majority for the MFF, failing any last minute revivals of Parliament-wide opposition.

Who's afraid of the Working Time Directive? - Part 2: NHS

Yesterday I ran through the contents of the Working Time Directive (WTD) and the UK Regulations that implement the law in Britain. With a minimum break of 20 minutes for those who work for 6 hours or longer, and an opt-out-able prohibition on a working week longer than 48 hours (when averaged out over 17 weeks), the rules seem reasonable. In fact, you rarely hear anyone argue against the substance of the Directive in connection with everyday workers. However, the WTD is increasingly linked with the NHS in political debate.

Since the rules apply to doctors, consultants and nurses, concerns have been raised over whether the WTD was impacting on patient care in the National Health Service, with changing doctors breaking the continuity of care and leading to mistakes. Two ECJ rulings – Sindicato de Médicos de Asistencia Pública, which held that “on call” time counted as working time whether or not it was spent at the hospital, and Norbert Jaeger (PDF), which defined when compensatory rest should be taken – are key to this debate. It should be noted that health service workers can opt out of the 48 hour week in their contracts too.

The Royal College of Surgeons is one group of medical professionals against the current rules:

“These on-call arrangements have been scrapped in favour of full-shift rotas. The nature of working a full shift pattern is more tiring when compared to an ‘on-call’ system because of doctors working irregular shift patterns which create a working environment that is impairing patient safety by reducing the number of doctors covering patients and increasing the number of patient handovers between staff, correspondingly reducing continuity of care.

[...]

We believe that proposals to classify on-call time differently and the requirements on the timing of compensatory rest will provide a framework to start to address these concerns for surgeons, but we would also encourage the Commission to look in detail at the sectoral problems for doctors in training with a view to allowing a solution of excluding this group of doctors from the scope of the Directive.”

However, the British Medical Association is in favour of the WTD:

"'The BMA opposes further attempts to renegotiate the [EWTD] or to overturn rulings by the ECJ (European Court of Justice).

'Previous attempts to change legislation have taken many years and securing significant improvements to junior doctor training within the parameters of the EWTD must remain the priority,' the association says.

The BMA also stresses that it strongly supports the ECJ rulings that all time on-call, including inactive time, is considered work."

And the BMA’s Juinor Doctors’ Committee chair, Ben Molyneux has said:

"Tired doctors make mistakes, and we must think of the welfare of doctors and the resultant impact fatigue can have on patient care.

'There is a mounting body of evidence to support the move to reduced working hours in terms of patient safety. While flexibility may be appropriate, scrapping the [EWTD] is not.'"

The Royal College of Nurses supports the rules, pointing out the level of skill and preparedness that needs to be maintained for on-call hours, and call for the definition of on-call time to be included in legislation and for the end of the opt-out (PDF):

“The RCN has called for a phasing out of the opt out on health and safety grounds. There is evidence to support the impact of long working hours on safety and the health and wellbeing of nursing staff. A recent study of the health and wellbeing of 11, 000 health care staff in England found a link between long working hours and increased absenteeism. It also found higher rates of presenteeism (with staff attending work when they didn’t feel well enough to be there). Sleep deprivation was identified as a risk factor for wellbeing.

[...]

The same survey [the RCN’s working well survey] found that 58% of nurses working on call or standby did not receive any compensatory rest. The nature of on call work, particularly in the health sector, often means carrying out safety critical procedures in a relatively unsupervised environment. For this reason, it is essential that compensatory rest is timely and adequate. As mentioned earlier there is a real need for clarity from the Commission around the issue of on call and compensatory rest.”

In this debate there seems to be three different, but related, issues: the protection of workers through regulating working time, protecting patients and care continuity, and the number of healthcare staff. As Molyneux remarked, tired doctors make mistakes, so it’s not self-evident that scrapping WTD rules for healthcare workers – effectively saying that they deserve less rights than other employees – would be to the benefit of healthcare workers or patients. Again, when scrapping the WTD is suggested, there is little to no reference to any policy decision – what this means for the mix of healthcare workers’ rights, patient care, and the shape of the healthcare workforce – so seemingly working doctors and nurses longer is the simple answer to these issues.

Notably, the quotes above are taken from the Commission’s consultation with the industry over how to reform the WTD, and from reaction to debates in the UK Parliament.Currently there are on-going talks between the social partners (employers and employees) in this area, and the Commission is likely to try to introduce reforms for the Council and Parliament to consider if the talks fail. So this isn't necessarily a static area of policy, and it shows that there can be continued policy debates in the EU on existing laws.


Conclusion:

So where does that leave us on the WTD and social and employment matters being a part of the single market? Essentially there are two separate issues when it comes to the WTD and legislation like it: (1) is it a topic for valid debate and legislation at a European level? and (2) is the Directive itself any good?

Since the single market covers an economy of around 500 million people, who are employers, employees, and consumers, how the market is run and regulated affects everyone. The single market isn't some sort of alternate dimension that delivers food and drink from France and Italy to supermarket shelves, but an economy that people work and live in, so social and environmental standards are naturally an issue for consideration. The need for minimum European standards in these areas is a valid topic, and, especially as Member States and citizens want to protect their welfare states, actually important to the legitimacy of the single market that it can recognise these issues.

And the WTD? It's clear from these 2 posts that I'm personally in favour of it, but it's more important that the debate when it comes to this kind of legislation has more substance. If a political party thinks that these minimum standards should be scrapped, then that's a pretty radical proposal and deserves a full debate on the alternatives.

Who is afraid of the Working Time Directive? - Part 1

When it comes to renegotiating the UK’s place in the EU and what Cameron wants to be repatriated in terms of powers, there’s very little to go on. So far Cameron’s statements have been about changes for the whole of the EU if possible, but specific opt-outs for the UK if not – though he has no shopping list of powers, and there are only references to "flexibility" to go by. As the UK will probably choose to opt out of the Justice and Home Affairs area of the EU (and "re-opt-in" to a few of the measures in this area), the Working Time Directive seems to be the most prominent piece of legislation that upsets the Tories, so it might be worth taking a closer look at it.

The Working Time Directive is aimed at regulating the rest periods that workers get in order to ensure health and safety at work (Article 1), and covers daily and weekly rest, annual leave and night shift organisation – you can read an overview of the Directive on Wikipedia here.  In the UK the Directive is implemented via the Working Time Regulations (SI 1998/1833). Note that there are separate rules for workers in the transport sector.

The minimum rules the Directive provides include:

- That workers are entitled to a minimum daily rest of 11 hours per 24 hour period (Article 3) – this means that there’s 11 hours where the worker is not at work, including when the worker’s asleep;

- That workers are entitled to a break where the working day is longer than 6 hours (the period is left to collective agreements or national legislation) – Article 4);

- That workers are entitled to a day off for every 7 day period, though there is a derogation to a minimum rest period of 24 hours if there are technical or work organisation conditions that require it (Article 5). The weekly day off is averaged over a fortnight (Article 16(a));

- That workers work no more than an average of 48 hours per week (Article 6) – there is an opt-out, so that employees can sign a contract opting out of the 48 hour limit (Article 22). This is averaged over 4 months or less, depending on the Member State (Article 16(b));

- That workers are entitled to paid annual leave of at least 4 weeks;

- Night workers are treated separately under the Directive, and are entitled to health assessments and 8 hour work days (Articles 8-12);

- Member States can have higher standards if they choose (Article 15), and Article 17 permits derogations for workers in certain sectors.

The UK Working Time Regulations that are based on this Directive provide for the UK that:

- There is a maximum average weekly working time of 48 hours (Regulation 4) – this can be opted out of under an employment contract (Regulation 5). The average is taken by looking at the last 17 weeks of employment;

- Workers will get the 11 hour daily rest and the weekly day off as set out in the Directive (Regulations 10 & 11), with some flexibility over how they’re used;

- Where the daily working time is more than 6 hours, they are entitled to a minimum of a 20 minute break (30 minutes for 15-18 year olds working over 4.5 hours) – Regulation 12;

- Workers are entitled to 28 days paid holiday annually (Regulation 13).

So the UK Regulations stick strictly to the maximum working time permitted by the Directive per week, and employees are able to opt out of the 48 hour average limit (though they should not suffer detriment for not opting out – Regulation 31). On annual leave, the UK Regulations are more generous, providing for 5.6 weeks holiday per year (though obviously you’ve fewer holidays if you haven’t or won’t have worked a full year). For exceptions to the rules and opting out of the 48 hour working week, see the Government’s website here.

Interestingly, if you work more than 6 hours per day, you’re only entitled to a minimum of 20 minutes break under UK law – a bit less than the traditional lunch hour!

As the law currently stands, the UK Regulations mostly stick closely to the Working Time Directive and do little to build on them. Are they really that much of a burden? How much would business really gain from reducing workers' rest breaks (since the headline 48 hour week can be opted out of anyway)? As Narmanda Thiranagama pointed out in her analysis of UKIP's current economic policy (which currently includes scrapping laws such as the WTD), SMEs have put such regulation last on their list of obstacles to growth:

"In 2012, the SME Barometer found that SMEs thought that the biggest obstacle to growth was the economy. Of the 667 directors and owners they interviewsed, 32% believed that the economy was the biggest obstacle, followed by 13% who blamed taxation. "Regulations" languishes at the bottom of the table along with "competition" at 7%."

When it comes to the UK's economic problems and the reality of regulation, it doesn't seem as if there's much that getting rid of this Directive will actually do for the British economy. And are the Tories campaigning with the message that British people don't work long enough hours? Even if they were, there is a debate to be had over longer hours versus productivity within those hours. While I hesitate to simply call a stance ideological - after all political parties are supposed to give us options from ideological viewpoints - it's hard to see where the practical impetus for policy change is coming from here, except that the WTD has become symbolic of EU regulation in the UK.

If you want to have a single market, then there will have to be some minimum social standards: EU Member States all have their own version of the welfare state, and their own idea of a work-life balance. Without some minimum standards, we would be constantly told that we our being out-competed by our neighbours and therefore have to give up the national standards and protections that people have fought for. How long would a single market survive if people were constantly told that it was the reason why they had to give up their working rights? A single market is deeper than free trade and a political project in itself; and if you want countries with welfare states to buy into it, then you will frankly have to expect common minimum social standards unless the political direction of the community changes.

The Tories in their European Conservatives and Reformists can campaign for more liberalisation and deregulation, either alone or with the Euorpean People's Party and others, but if it doesn't, then it shouldn't use renegotiation as a Trojan horse for its own ill-thought out ideological ends.

Of Red Cards, Democracy and Subsidiarity

When UK Foreign Minister William Hague made his Koenigswinter speech in Germany last week, his Red Card idea caught the media's attention. Currently if enough national parliaments get together, they can give a draft EU bill a "Yellow Card", which sends it back to the Commission to reconsider it on the grounds of subsidiarity (on whether or not the substance of the draft law is appropriate to be decided on the EU level or not). The Red Card idea is essentially an extention of this, with national parliaments being able to block draft legislation for proportionality and subsidiarity reasons.

So is it a good or bad idea? If it means each individual national parliament being able to block EU legislation, then obviously it's ridiculous. You cannot have national vetos for everything - the Single Market Act introduced qualified majority voting to make the project realistic in the first place. Indeed, the poor quality of the legislation from that period, with Member States adding on caveats, exceptions and exemptions to nearly everything means that it's practically much better that the EU operates in a more open and parliamentary manner than before.

Going back to national vetos will increase the emphasis on backroom deals and lead to poor legislation drafted more by diplomats than democrats. But I don't think that's what Hague was going for (after all, all his talk of furthering the single market would flounder in the face of 28 national vetos); it's more likely that he meant that it would take a number of national parliaments to block draft legislation. I both agree and disagree with Hague on the Red Card idea.

Here's a bit of what he said in his speech:

"The European Parliament plays an important role in holding European institutions to account. It can play a very positive role, as it has along with Commissioner Damanaki in the current reforms to the Common Fisheries Policy. But if the European Parliament were the answer to the question of democratic legitimacy we wouldn’t still be asking it

I think instead that the solution lies in promoting the role of national institutions in European decision-making – because ultimately it is national governments and national parliaments that are accountable to our electorates. They are the democratic levers voters know how to pull. I want to offer some thoughts on how we might do that in a moment

This idea of the right balance between national and European decision-making, and respect for the concepts of proportionality and subsidiarity, brings me to my third key challenge. How can we build a European Union that acknowledges and respects the diversity of its Member States? One that recognises that our national approaches to and ambitions for the European Union may sometimes differ?

[...]

We should explore whether the yellow card provision could be strengthened or extended to give our parliaments the right to ask the Commission to start again where legislation is too intrusive, and fails the proportionality test. And we should think about going further still and consider a red card to give national parliaments the right to block legislation that need not be agreed at the European level."

First of all, I disagree with him that strengthening national parliaments is the only way that democratic legitimacy can be increased (bear with me, I will get to the "agree" point eventually). The Eurozone crisis is a key example of this, with political battles going on within national parliaments, but little pan-European structures in which to express these political differences, debate them, and come to a majority approach while honing the policy to take account of criticism, you end up with an incoherent approach.

For the Cypriot bail-out, it was a clash of national parliaments and national leaders. Much of the resentment can be found in the ad hoc nature of the bail-outs, and how the battles are fought along national battle-lines, with little opportunity to be heard on an equal stage, and with no equal and systemic policy that applies fairly to all. This feeling of political inequality, the lack of political leadership at a European level, and the inability to properly debate and influence the central policy is the fundamental basis of disillusionment with the EU (at least in the Eurozone).

You cannot fix the democratic issues with the EU by adding more institutional complexity and blocking mechanisms. To have political accountability, you need a political space that you can influence to create policy that is accountable to voters. The European Parliament and the Commission, if tied closely to the Parliament, would be the best place to start, because it would give a focal point for debating and making policy that can be influenced via direct elections (even with the Council and national parliaments having checks on them).

Because greater instituional complexity and more blocking mechanisms in the system really leads to greater inefficiency and an inability to reach decisions. If the EU cannot make decisions, then that would lead to even greater disillusionment. (And the next European elections can be a good starting point for debating and influencing the big issues with the EU today - see this article by Simon Hix and Christophe Crombez).


That said, increasing the power of the national parliaments can increase democratic legitimacy in the EU when it comes to "...build[ing] a European Union that acknowledges and respects the diversity of its Member States...". At the moment subsidiarity is hard to define - not the idea that power should be exercised as closely to people as possible, but the day-to-day practice of it. The Yellow Card system was a great idea, but it needs reform (a longer time period for national parliaments to object, and national parliaments need to organise greater communication between them to make better use of the procedure).

A "Red Card" system - with, say, a majority or qualified majority of national parliaments being able to block draft legislation - could be a good way of developing a culture of subsidiarity. When the Commission analyses draft laws for subsidiarity and proportionality, it considers the arguments, but there isn't a clear and objective answer to the question, and nor can subsidiarity be effectively defined in a day-to-day way by the courts. There needs to be a political culture of subsidiarity, based on an understanding between national parliaments (and citizens) and the Commission (and the rest of the Union legislature) about what should be done at the EU level and what should be done at a national or more local level. This can really only be done through political debate and contest, and a Red Card system could give national parliaments the tools to start marking that space.

Of course there will be clashes and debates between the EU institutions and the Member States/national parliaments over this - that's the point! But it's a more effective way of building an accepted idea of subsidiarity and decentralisation in the EU over time than relegating the question to impact assessments and wonkish policy documents.


(As a side-note, here's a graphic explaining how EU laws are made [via Kosmopolit]).

IMCO Committee to hold hearing for new Croatian Commissioner today

A new Member State, a new Commissioner. With the EU expanding to 28 Member States on 1st July, the Commission will also be adding a new member to its College. This is in line with the compromise struck with Ireland over the Lisbon Treaty, ensuring that each Member State will have one Commissioner.

The nominated Commissioner for Croatia is Neven Mimica, a member of the ruling Social Democrat Party in Zagreb and former minister for European Integration. Barroso plans to allocate the Consumer Protection portfolio to Mimica, so his European Parliamentary hearing will be before the Internal Market and Consumer Protection committee ("IMCO").

The hearing will take place in 1 hour (9:30-12:30 CET) and can be live streamed on the Parliament's website.

The European Parliament has put together a nice flowchart showing how Commissioners are appointed (outside of when the Commission as a whole is elected) here.