133 Committee

8/8/2019 133 Committee

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3. The EP also has the right to approve the way in which the Commission has discharged(i.e. spent) the budget, which falls under its third area of powers: scrutiny and control of

the executive. In addition to its right of discharge, the EP has the power to ask questionsof the Commission and Council, as well as to convene Committees of Inquiry to

investigate maladministration in the implementation of Community law (Shackleton

1998).4. Fourth, the Parliament has powers of appointment in relation to a number of institutionsincluding the Commission.

5. Finally, the EP is the only EU institution that has the right to dismiss the Commission, apower formally known as the right of censure.

Legislative power: The European Parliament shares legislative power equally with the Councilof the European Union. This means it is empowered to adopt European laws (directives,

regulations etc,).It can accept, amend or reject the content of European legislation.

Budgetary power: The European Parliament and the Council of the European Union togetherconstitute the Unions budgetary authority, which decides each year on its expenditure andrevenue. The procedure of examining, then adopting, the budget takes place between June and

late December. In the case of compulsory expenditure (e.g. agricultural expenditure andexpenditure linked to international agreements) it is the Council that has the last word. In the

case of non-compulsory expenditure (other expenditure) Parliament decides in closecollaboration with the Council. The European Parliament and the Council must adhere to the

annual spending limits laid down in the multiannual financial perspective.

European Union: Powers and Policy making, page 125,By Jeremy John Richardson


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Supervisory power: The European Parliament has major supervisory powers over the

activities of the European Union. Ways of exercising control are: Citizens right of petition withappointing ombudsman, inquiry by setting up a commission to inquire violation of laws,

Parliaments right of recourse before the Court of Justice of the European Communities,

financial control power of control in economic and monetary domain.The legislative role has developed from mere consultation at first, through the co-operation

procedure initiated by the Single Act, to the co-decision introduced by the Maastricht Treaty andextended at Amsterdam to the point where it now applies to over half the legislation. Already in

1989 the Parliament could use its influence under the co-operation procedure to secure resultssuch as stricter standards for exhaust emissions from small cars. With co-decision it has been

able, among other things, to limit the Councils tendency to extend control of its committees ofnational officials over the Commissions execution of Community policies. It has used its power

of assent over association agreements as a sanction against human rights abuse in Turkey, and toensure better conditions for Palestinians exporting to the Community from the occupied

territories. European Union A brief introduction

Voting:Majority of the vote castsIn some cases, majority of members

2. The Council of the European Union

The Council is the main decision-making body of the European Union.The ministers of the Member States meet within the Council of the European Union. Dependingon the issue on the agenda, each country will be represented by the minister responsible for that

subject (foreign affairs, finance, social affairs, transport, agriculture, etc.).The presidency of the Council is held for six months by each Member State on a rotational basis.

The Council is responsible for decision-making and co-ordinationy The Council of the European Union passes laws, usually legislating jointly with the

European Parliament.

y The Council co-ordinates the broad economic policies of the Member States.y The Council defines and implements the EUs common foreign and security policy, based

on guidelines set by the European Council.y The Council concludes, on behalf of the Community and the Union, international

agreements between the EU and one or more states or international organisations.y The Council co-ordinates the actions of Member States and adopts measures in the area of

police and judicial co-operation in criminal matters.y The Council and the European Parliament constitute the budgetary authority that adopts the

Communitys budget.


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Council decisions are taken by unanimous, simple or qualified majority voting (QMV), withQMV being the most common. When QMV is used, each member nation is endowed with a number ofvotes. The votes are weighted so that at least some of the smaller member nations must assent. For

the EU of twelve, the total number of votes was seventy-six (France, Germany, Italy and the UK

ten each; Spain eight; Belgium, Greece, the Netherlands and Portugal five each; Denmark and

Ireland three each; and two for Luxembourg), with fifty-four votes needed for a decision. Thus the large

countries could not impose their wishes on the rest; indeed, the weights favour the smaller countries. Forthe EU of fifteen, it was agreed that sixty-two votes, out of a total of eighty-seven (France,Germany, Italy and the UK ten each; Spain eight; Belgium, Greece, the Netherlands and Portugal

five each; Austria and Sweden four each; Denmark, Finland and Ireland three each; and two forLuxembourg), would be needed for a decision, but if twenty-six votes are recorded against a

decision, reasonable time should be allowed for further discussion. The UK suggested that itshould be indefinite, but the others believe that it should be no more than three months.

This general picture remains basically true after the Nice Treaty and the accession of the twelvenew members in 2004 and 2007, in spite of increased votes for the larger member nations

(twenty-nine for each of France, Germany, Italy and the UK; twenty-seven for Poland and Spain;fourteen for Romania; thirteen for the Netherlands; twelve each for Belgium, the Czech

Republic, Greece, Hungary and Portugal; ten each for Austria, Bulgaria and Sweden; seven eachfor Denmark, Finland, Ireland, Lithuania and Slovakia; four each for Cyprus, Estonia, Latvia,

Luxembourg and Slovenia; and three for Malta). A decision requires a majority of member

states and a minimum of 255 votes (73.9 per cent of the total of 355) and the blocking

minority is ninety-one votes. The provison is added that a member of Council can requestverification on whether the member nations constituting the 255 votes represented at least 62 per

cent of the total EU population; if not, the decision cannot be adopted. Thus a decision requires atriple majority.

As a final word on QMV, one should add that its proponents often claim that it is a device meantto ensure that the large countries cannot impose their wishes on the smaller member nations

since the largest six countries need another sixty two to secure the needed 232 votes. However, it

can equally be claimed that it is a system whichprevents majority opinion from being stymied by a few smaller nations, which is what couldhappen in the case of a decision requiring a simple majority of the EU nations, i.e. thirteen

out of twenty-five: hence the intricate play with figures.

Unanimous: consensusQualified Majority Voting:

a)For a Proposal from Commission or High Representative of the Union for ForeignAffairs and Security Policy: 55% of Weighted voting with 65 percent representations of

Total population and approval of majority of member states;b) for a proposal not from Commission or High Representative of the Union for Foreign

Affairs and Security Policy: 255 out of 345 (72% ) of weighted voting with 65 percentrepresentation of Total EU population and approval of majority of member states. Article

238Simple Majority 14 out of 27 members.


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The acts of the CouncilThe acts of the Council can take the form of regulations, directives, decisions, common actions

or common positions, recommendations or opinions.The Council can also adopt conclusions, declarations or resolutions.

When the Council acts as a legislator, in principle it is the European Commission that makes

proposals. These are examined within the Council, which can make modifications beforeadopting them.The European Parliament is an active participant in this legislative process. On a broad range of

issues, Community legislation is adopted jointly by the Parliament and the Council usinga procedure known as co-decision.

The number of votes each Member State can cast is set by the Treaties. The Treaties also

define cases in which a simple majority, qualified majority or unanimity are required.A qualified majority will be reached if the following two conditions are met:

y if a majority of Member States approve (in some cases a two-thirds majority);y a minimum of 255 votes is cast in favour of the proposal, out of a total of 345 votes.

In addition, a Member State may ask for confirmation that the votes in favour represent atleast 62% of the total population of the Union. If this is found not to be the case, the

decision will not be adopted.

Distribution of votes for each Member State

Germany, France, Italy, United Kingdom 29Spain, Poland 27

Romania 14 Netherlands

Belgium, Czech Republic, Greece, Hungary, Portugal 12Austria, Bulgaria, Sweden 10

Denmark, Ireland, Lithuania, Slovakia, Finland 7Cyprus, Estonia, Latvia, Luxembourg, Slovenia 4

Malta 3

TOTAL 345

Voting in the CouncilThere are three ways in which the Council of European Unioncan vote to take a decision: by

unanimous vote, by simple majority or by qualified majority. Originally, decisions of the Councilneeded to be unanimous, in effect giving a dissenting state the veto, a fact exploited by de Gaulle

in the 1960s. the Luxembourg Compromise of 1966 reduced the need for unanimity, extendingthe number of issues that could be settled by qualified majority. Since then there has been a stady

extension of qualified majority voting (QMV), most significantly as a result of the SingleEuropean Act.

In pillar one the the TEU, unanimity is still required for;

y all new policies

y amendments to the policy issues of taxation and industry;

y matters relating to regional and social funds;


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y where the council wishes to agree or amend a policy against the wishes of theCommission.

For the other two pillars created by the Maastricht Treay foreign and security policy (pillartwo) and justice and home affairs (pillar three) the Council was give the sole right to act as

decision-maker and unanimity was the rule.

Simple majority voting, with each state allowed one vote, is not permitted on policy orlegislative proposals. Its use is mainly confined to procedural matters.

QMV except stated above matters. (110 print)

3. The European CommissionThe European Commission is the executive body of the European Union. The body isresponsible for proposing legislation, implementing decisions, upholding the Union's treaties and

the general day-to-day running of the Union. The Commission operates as a cabinet government,with 27 Commissioners. There is one Commissioner per member state, though Commissioners

are bound to represent the interests of the EU as a whole rather than their home state. One of the27 is the Commission President appointed by the European Council. The Council then appoints

the other 26 Commissioners in agreement with the nominated President, and then the 27Commissioners as a single body are subject to a vote of approval by the European Parliament.

Legislative Procedure in EU the EU page 76-, 97- 104

Legislative Process within the Union1. The commission proposes new legislation;2. The Council consults on the proposal with the Parliament which scrutinizes (and may

suggest amendments) and with the Economic and Social Committee which advises;

3. The Council decides whether to go ahead;

4. The Commission implements the proposal;5. The Court of Justice arbitrates on any infringement of the law and resolves any disputes.

There are four main procedures, other than that for handling budgetary matters.

1. Consultation procedureThe consultation procedure involves Parliament giving an opinion on Commission proposals.

Use of this method of policy-making has gradually been reduced with the introduction of thecooperation and co-decision procedures, but it still covers important fields such as the CAP,

taxation and certain aspects of economic and monetary union.

2. the Cooperation procedurethe passage of the Single European Act extended the role of the Parliament although the Council

still has the final stay. In the TEU, cooperation was taken further, and now only covers somelimited aspects of EMU. Again, the Commission initiates a proposal, as described in the section

above. However, under this procedure, rather than being allowed merely consultation (the firstreading), it acquired more of a legislative role; it was given a second opportunity to examine any

proposal. The agreed position of the Council was to be submitted to it for scrutiny during a


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second reading. For up to three months or four if the period is extended by the Council Parliament can discuss the proposal. Parliament has a number of options:

Accept the proposal; Amend it or reject it.

3. Assent Procedure

The SEA also introduced another device: the assent procedure. On any proposed enlargement ofthe EC or on any association agreements, the assent of Parliament is needed. Parliament maygive or withhold its agreement on the proposal laid before it, but it has no power to amend it.

4. Co-decision procedure:

Under the co-decision procedure, Parliament and the Council adopt legislative initiatives o nthebasis of joint agreement. Parliament has an absolute right of veto if it rejects the approved

position of the Council, though in a conciliation stage a committee made up of representativesfrom the Parliament and the Commission can look for a compromise satisfactory to both

institutions.


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133 Committee

The 133 Committee is the real power behind and decision-making centre for the European

Unions trade policy. EU trade policy is decided in the Article 133 Committee. It takes itsname from Article 133 of the Treaty of Amsterdam. That article provides for the establishment

of a special committee appointed by the Council to assist the European Commission. It iscomprised of representatives (trade experts) from each Member State and chaired bywhichever Member State holds the EU Presidency. The 133 Committee constitutes the linkbetween the European Commission and the Council. The European Commission, which carriesout international trade negotiations on behalf of the Union, regularly consults the Article 133

committee and acts upon its recommendations.

The Committee meets on a weekly basis, usually on a Friday. It discusses the full rangeof trade policy issues affecting the Community, from the strategic issues surroundingthe launch of rounds of trade negotiations at the WTO to specific difficulties with theexport of individual products, and considers the trade aspects of wider Community

policies in order to ensure consistency of policy. Specialist meetings of the Article 133Committee also meet separately to consider such complex issues as trade in servicesand textiles in greater depth than is usually possible.

Article 133 (ex Article 113)1. The common commercial policy shall be based on uniform principles, particularly in regard to

changes in tariff rates, the conclusion of tariff and trade agreements, the achievement ofuniformity in measures of liberalisation, export policy and measures to protect trade such as

those to be taken in the event of dumping or subsidies.

2. The Commission shall submit proposals to the Council for implementing the commoncommercial policy.

3. Where agreements with one or more States or international organisations need to be

negotiated, the Commission shall make recommendations to the Council, which shall authorisethe Commission to open the necessary negotiations.

The Commission shall conduct these negotiations in consultation with a special committee

appointed by the Council to assist the Commission in this task and within the framework of suchdirectives as the Council may issue to it.

The relevant provisions of Article 300 shall apply.

4. In exercising the powers conferred upon it by this Article, the Council shall act by a qualified

majority.

5. The Council, acting unanimously on a proposal from the Commission and after consulting theEuropean Parliament, may extend the application of paragraphs 1 to 4 to international


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negotiations and agreements on services and intellectual property insofar as they are not coveredby these paragraphs.


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Decision Making Procedure in EUDecision-making at European Union level involves various European institutions, in particular

the European Commission, the European Parliament (EP),

the Council of the European Union.

In general, it is the European Commission that proposes new legislation, but it is the Council andParliament that pass the laws. In some cases, the Council can act alone. Other institutions also

have roles to play.The main forms of EU law are directives and regulations. The rules and procedures for

EU decision-making are laid down in the treaties. Every proposal for a new European law isbased on a specific treaty article, referred to as the legal basis of the proposal. This determines

which legislative procedure must be followed. The three main procedures are consultation,assent and co-decision.

1. Co-decision

As defined in Article 294 of the TFEU, the co-decision procedure is the legislative process whichis central to the Community's decision-making system. It is based on the principle of parity and

means that neither institution (European Parliament or Council) may adopt legislation withoutthe other's assent.

One of the important changes introduced by the Lisbon Treaty (or the Treaty of the EuropeanUnion (TEU) and the Treaty of the Functioning of the European Union (TFEU)) is the fact that

co-decision becomes the "ordinary legislative procedure", i.e. what used to be the exception indecision-making has become the norm for most policy areas.

In the codecision procedure, Parliament does not merely give its opinion: it shares legislative

power equally with the Council. If Council and Parliament cannot agree on a piece of proposed

legislation, it is put before a conciliation committee, composed of equal numbers of Council andParliament representatives. Once this committee has reached an agreement, the text is sent onceagain to Parliament and the Council so that they can finally adopt it as law. Conciliation is

becoming increasingly rare. Most laws passed in co-decision are, in fact, adopted either at thefirst or second reading as a result of good cooperation between the three institutions.

2. Assent

The assent procedure means that the Council has to obtain the European Parliament's assentbefore certain very important decisions are taken.

The procedure is the same as in the case of consultation, except that Parliament cannot amend aproposal: it must either accept or reject it. Acceptance (assent) requires an absolute majority

1of

the vote cast.

1Absolute majority (in the European Parliament): Majority of the members who comprise Parliament. In its

present configuration (with 736 MEPs), the threshold for an absolute majority is 369 votes (Note: In the elections in

June 2009 which took place on the basis of the Nice Treaty, the number of MEPs was reduced to 736. With the entry

into force of the Lisbon Treaty on 1/12/2009, the number will be increased to 754 once the new arrangements have

been completed and reduced to 751 for the elections in 2014. Consequently, the numbers necessary to reach an

absolute majority will thus change to 378 and 376 respectively). Under the co-decision procedure, an absolute


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The assent procedure is mostly used for agreements with other countries, including theagreements allowing new countries to join the EU.

3. Consultation

The consultation procedure is used in areas such as agriculture, taxation and competition. Basedon a proposal from the Commission, the Council consults Parliament, the European Economicand Social Committee and the Committee of the Regions.

Parliament can: approve the Commission proposal,

reject it, or ask for amendments.

If Parliament asks for amendments, the Commission will consider all the changes Parliamentsuggests. If it accepts any of these suggestions it will send the Council an amended proposal.

The Council examines the amended proposal and either adopts it or amends it further. In thisprocedure, as in all others, if the Council amends a Commission proposal it must do so

unanimously.

majority is necessary in plenary session when voting on a second reading in order to reject the Council position at

first reading or to adopt amendments.


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1. Stages of Economic IntegrationFound this while trying to clear a doubt aby the diff between PTA and FTA......

The objective of World Trade Agreement (WTA) is to establish a multi-lateral trading system. However, it permits regional and preferential or freetrade agreements as per the enabling clauses. Trade agreements differ widely depending on their objectives, coverage of products/services, rules of

origin, negative lists/sensitive lists, investment related measures and coverage of other diverse aspects of agreement. Depending on the degree ofregional integration brought about by them, trade agreements are broadly classified in to five types.

1.Preferential Trade Agreements (PTAs) regional agreement in which members of the PTA impose a preferential tariff or lower customsduty on the products originating from the member countries.

2.Free Trade Agreements (FTAs) FTA is a special case of PTA where all tariff and non-tariff barriers are abolished and free access is allowed

to the products of member countries. In both PTA and FTA, each member is free to maintain different most-favoured-nation (MFN) barrierson non-members. Rules of Origin between the members of FTA is agreed to ensure that genuine products of the FTA partners alone aregiven duty-free access (World Bank 2005).

3.Customs Unions (CUs) A Customs Union moves beyond a free trade area by establishing a common external tariff on all trade between,members and non-members. Customs Unions typically contain mechanisms to redistribute tariff revenue among members.

4.Common Markets (CMs) A Common Market deepens a customs union by providing free flow of factors of production such as labour andcapital in addition to the flow of outputs.

5.Economic Unions (EUs) In an Economic and Monetary Union, members share a common currency and macro-economic policies (ExampleEuropean Union).


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The European Central Bank

The European Central Bank is the central bank for Europe's single currency, the euro. The

European Central Bank (ECB) was set up in 1 June 1998, under the Treaty on European Union,

and it is based in Frankfurt (Germany). Its job is

y to manage the euro - the EU's single currency, and

y to safeguard price stability for the more than two-thirds of the EU's citizens who use theeuro.

y The ECB is also responsible for framing and implementing the EUs economic andmonetary policy (Treaty article 105.1).

According to the Treaty establishing the European Community (Article 105.2), the basic tasks

are:

the definition and implementation of monetary policy for the euro area; the conduct of foreign exchange operations;

the holding and management of the official foreign reserves of the euro area countries(portfolio management).

the promotion of the smooth operation of payment systems.

The ECB, as the core of the newly established central banking system called the European

System of Central Banks (ESCB), has taken on responsibility for the monetary policy in the euroarea. Under the EC Treaty, the ESCB is entrusted with carrying out central banking functions for

the euro. However, as the ESCB has no legal personality of its own and because of differentiatedlevels of integration in EMU, the real actors are the ECB and the NCBs of the euro area

countries. They exercise the core functions of the ESCB under the name Eurosystem. TheESCB is made up of the ECB and the NCBs of the 27 EU Member States. Its organic law is

the Protocol on the Statute of the European System of Central Banks and of the European CentralBank (Statute of the ESCB), which is annexed to the EC Treaty.

The ESCB includes the NCBs of all EU Member States, even those which have not adopted theeuro because of their special status (Denmark and the United Kingdom) or because of derogation

(Sweden and the ten new EU Member States). As the non-participating Member States havemaintained their monetary sovereignty, their respective central banks are not involved in

carrying out the Systems core functions. Therefore, to help the public to understand the complexstructure of the European central banking system more easily, the Governing Council of the ECB

decided in November 1998 to adopt the term Eurosystem. This term refers to the composition the ECB and the NCBs of the Member States that have adopted the euro in which the ESCB

performs its basic tasks.

There are three main political and economic reasons why a system was established to carry outcentral bank functions for the euro, and not a single central bank:


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1. The establishment of a single central bank for the whole euro area would not have beenacceptable on political grounds.

2. The Eurosystem approach builds on the experience of the NCBs, preserves theirinstitutional set-up, infrastructure and operational capabilities and expertise; moreover,

NCBs continue to perform some non-Eurosystem-related tasks.

3. Given the large geographic area of the euro area, it was deemed appropriate to give creditinstitutions an access point to central banking in each participating Member State. Given

the large number of nations and cultures in the euro area, domestic institutions (ratherthan a supranational one) were considered best placed to serve as points of access to the

Eurosystem.

The ECB works in complete independence. Neither the ECB, the national central banks of the

Eurosystem, nor any member of their decision-making bodies can ask for or accept instructionsfrom any other body. The EU institutions and member state governments must respect this

principle and must not seek to influence the ECB or the national central banks.

To join the euro area, the 16 countries had to fulfil the convergence criteria, as will other EU

Member States prior to adopting the euro. The criteria set out the economic and legalpreconditions for countries to participate successfully in Economic and Monetary Union.

Decision Making Bodies in ECB

1. The Governing Council - 22

The Governing Council is the main decision-making body of the ECB and is entitled to take themost important and strategically significant decisions for the Eurosystem.

Members:

Convergence criteria: Article 121(1)

1. Price developments: the achievement of a high degree of price stability, does not exceed more than 1percentage points;

2.F

iscal developments: the sustainability of the government financial position; this will be apparent from havingachieved a government budgetary position without a deficit that is excessive;

3. Exchange rate developments: the observance of the normal fluctuation margins provided for by the exchange-rate mechanism of the European Monetary System, for at least two years, without devaluing against the currencyof any other Member State.

4. Long-term interest rate developments: the durability of convergence achieved by the Member State and of itsparticipation in the exchange-rate mechanism of the European Monetary System being reflected in the long-terminterest-rate levels.


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y Members of the Executive Board (6) and

y The governors of the national central banks of the euro area countries (16).

Responsibilities:In line with Article 12.1 of the Statute of the ESCB, the Governing Council is responsible for all

decisions except for those explicitly reserved to the Executive Board . With regard to theobjectives and tasks entrusted to the Eurosystem, it is in particular responsible for formulating

the monetary policy of the euro area. In this context, the Governing Council defines the ECBsmonetary policy strategy and the operational framework, takes the necessary decisions (for

instance on the key ECB interest rates) and adopts the guidelines to be followed by theEurosystem NCBs for the execution of monetary policy operations.

Other competences include:

issuing guidelines for all other operations of the NCBs as well as for the transactions ofeuro area countries in their foreign exchange working balances;

adopting the regulations which the ECB may enact in application of the Treaty or by

delegation from the EU Council; authorizing the issue of euro banknotes and the volume of issue of euro coins for the euro

area;

establishing the rules to standardize the accounting and reporting of NCB operations; initiating Community legislation and fulfilling the advisory function of the ECB and

deciding on the international representation of the Eurosystem; deciding on the allocation of financial resources to the ECB and the appropriation of its

financial results, and adopting the rules governing the allocation of monetary incomeamong the euro area NCBs;

adopting the Annual Report and Annual Accounts of the ECB.

In addition, the Governing Council is the supreme decision-making body for theadministration of the ECB itself. It adopts the Rules of Procedure of the ECB, determines

the conditions of employment of the members of the Executive Board and the ECB staff andsets the ECBs budget.

General voting rulesThe Governing Council acts as a collegiate body in line with the one member, one voteprinciple.

This means that except for decisions on certain financial matters, the votes are not weighted.The principle reflects

the fact that all themembers, including

the NCB governors,are appointed in their

personal capacityand not as

representatives oftheir countries or

their NCBs. Instead, they have to act in the interest of, and with due regard to the situation in, theeuro area as a whole.

Financial matters requiring weighted votingaccording to the NCBss share

in the subscribed capital of the ECB are: the paying-up and increases in the ECBs capital (Article 28);

revisions of the ECBs key for capital subscription (Article 29); transfers of foreign reserve assets to the ECB (Article 30); the allocation of NCBs monetary income (Articles 32 and 51); and the allocation of the ECBs net profits and losses (Article 33).


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The Governing Council normally acts by a simple majority of the votes cast by the members

who are present in person. In the event of a tie, the President has the deciding vote. These rulesensure that decisions cannot be blocked by a minority of Governing Council members and that

the ECB preserves its capacity to act at any point in time.

In two specific cases, a two-thirds majority of the votes cast is required:1. if the Governing Council finds that non-Eurosystem functions performed by an NCB

interfere with the respective objectives and tasks of the Eurosystem;2. if the Governing Council decides on the use of operational methods of monetary control

other than those specified in the Statute of the ESCB.

Unanimity is required to recommend an amendment to the Statute of the ESCB through thesimplified amendment procedure (Article 41 of the Statute) or the enabling clause (Article 10.6

of the Statute).

The EuropeanS

ystem of Central Bank: ES

CBS

tructure

2. Executive Board 6The Executive Board is the operational decision-making body of the ECB. It is responsible for

all the decisions that have to be taken on a day-to-day basis. Given the nature of monetarypolicy, the ECB is required to react and adapt to rapidly changing conditions in the money and

capital markets, to address specific cases and to deal with matters of urgency. This function can

only be performed by a body whose members are involved permanently and exclusively in theimplementation of the ECBs policies.

Members:

y The President of the ECB,

y The Vice-President and

y Four other members,


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All members are appointed by common accord of the Heads of State or Government of the euro

area countries.

Responsibilities:

y

to exercise certain powers delegated to it by the Governing Council. These includesome of a regulatory nature.

y to manage the day-to-day business of the ECB;

y to prepare Governing Council meetings;

y to implement monetary policy for the euro area in accordance with the guidelinesspecified and decisions taken by the Governing Council. In so doing, it gives the

necessary instructions to the euro area NCBs;

The Executive Board currently meets at least once a week. It normally acts by a simple majorityof the votes cast by the members who are present in person. In the event of a tie, the President

has the casting vote.

3. The General Council 29The General Council ensures an institutional link between the Eurosystem and the NCBs of thenon-euro area Member States. Its existence, composition and responsibilities are a consequence

of the different levels of integration in EMU. As such, the General Council will be dissolvedwhen all EU Member States have adopted the euro as their currency.

Members:

y President and Vice-President of the ECB, plus

y The governors of the national central banks (NCBs) of the 27 EU Member States

Responsibilities:y It carries out the tasks taken over from the European Monetary Institute which the ECB is

required to perform in Stage Three of Economic and Monetary Union (EMU) on account

of the fact that not all EU Member States have adopted the euro yet.

y The General Council also contributes to

the ECB's advisory functions; the collection of statistical information; the preparation of the ECB's annual reports; the establishment of the necessary rules for standardizing the accounting and

reporting of operations undertaken by the NCBs; the taking of measures relating to the establishment of the key for the ECB's

capital subscription other than those already laid down in the Treaty; the laying-down of the conditions of employment of the members of staff of the

ECB; and the necessary preparations for irrevocably fixing the exchange rates ofthe currencies of the EU Member States with a derogation against the euro.


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Co-decision procedure

The co-decision procedure is a legislative process introduced by the Treaty of Maastricht (Treaty

on European Union) 1991 and now enshrined in Article 251 of the EC Treaty. In the co-decision

procedure, the European Parliament and the Council jointly adopt (i.e. co-decide) legislation.The Parliament now shares legislative authority with the Council. Co-decision requires

consensus to be reached between the Council and the Parliament for legislation to be adopted.

The co-decision procedure has been applied to most Directives adopted since the Maastricht

Treaty and has given Parliament a much greater role and influence in the formulation of EUlegislation in the field of employment and industrial relations.

By virtue of its co-decision power, the legislative power of the Parliament is greatly

strengthened. Where the Council and Parliament cannot agree on proposed legislation, acompromise is sought through the establishment of a Conciliation Committee. If agreement

cannot be reached, the proposed legislation shall be deemed not to have been adopted.Effectively, the Parliament has a veto power: it is able, by absolute majority vote, to block a

proposed legislative measure. The Parliament remains powerless, however, to enact legislationby itself.

The outcome is that the EU institutional framework resembles a dual legislative system, albeit

with certain important specific qualities: the Council reflects national interests; Parliament isdivided along party political lines; decisions in the Council may require unanimity, whereas in

Parliament a majority will suffice; Parliament can veto but cannot initiate or enact legislation byitself. In practice, Parliament can exercise greater influence over EU legislation, through the

process whereby it scrutinises legislative proposals more closely, is able to propose amendments,

and may exercise a veto.

The Maastricht Treaty (1991) and the Nice Treaty (2000) extended the co-decision procedure tolegislative proposals in some of the areas of employment and industrial relations. The Maastricht

Treaty allowed qualified majority voting in some of the areas listed in Article 137(1) EC:

y improvement of the working environment to protect workers health and safety;

y working conditions;

y information and consultation of workers;

y the integration of persons excluded from the labour market;

y equality between men and women;

y the combating of social exclusion;

y the modernisation of social protection systems.

The Treaty of Nice 2000 extended co-decision procedures applicable to further areas listed inArticle 137(1) EC:

y protection of workers where their employment contract is terminated;


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y representation and collective defence of the interests of workers and employers, including co-

determination;

y conditions of employment for third country nationals legally residing in Community territory.

However, such extension requires a unanimous vote in the Council (Article 137(2) paragraph 3

EC). A requirement of unanimity means that such procedures are less used and less successful.The co-decision procedure, when combined with qualified majority voting in the Council, is the

formula most likely to produce EU legislative action in the field of employment and industrialrelations.

In practice, the co-decision procedure affects not only the dynamics of the legislative process butalso has a potential effect on EU social dialogue. Coupled with qualified majority voting, the co-

decision procedure makes it easier for the Parliament to promote or block legislation. This mayprovide an indirect incentive to the social partners to negotiate and conclude agreements in the

social dialogue.

Legislature: where laws are made. In most countries, the legislature is likely to be the nationallyelected body. In the UK this is Parliament (of which the elected and most powerful

component is the House of Commons); in the United States this is Congress (the House ofRepresentatives and the Senate), although there is also a directly elected Executive in the form of

the president.

In the European Union, however, this is something of a problem. The directly elected body is the

European Parliament, but it is not a law-making body. Originally if could be argued that the

Council of European Unionwas the legislature. Laws were proposed by the Commission butneeded the imprimatur of the Council of Ministers. Over time, this responsibility has been shared

with the European parliament, to the extent that both bodies are now co-decision makers.However, unlike most legislatures, the European Parliament cannot initiate legislation.


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Legislative Procedure1. Consultation procedureThis process enables the European Parliament to give opinion on a policy proposal from theCommission. The Council of European Union must consult with the European parliament but is

under no obligation to follow the Parliaments position. It had been initiated from Treaty of

Rome. Today, this is the first step in the legislative process. Subsequently there is co-operationand co-decision.

2. Cooperation procedureThis was introduced by the Single European Act. It increased the influence of the Europeanparliament in the legislative process, by giving it, in effect, a second reading. If the opinions of

the European parliament, as expressed in the consultation procedure, are not accepted, the co-operation procedure enables the Parliament to express their opinion about the position of the

Council of European Union. To amend or reject proposals from the Council of European Union,the European Parliament requires the support of an absolute majority of its members. However,

the Council of European Unionmay still veto the proposals of the Parliament. After this process,

there is now a third reading the co-decision process.

3. Assent ProcedureIt is particular power given to the European Parliament over particular policy areas, for

example enlargement. The power was granted under the Single European Act in 1987.Ultimately, the assent procedure gives the European Parliament a Yes/No option, which places

it on a par with the other institutions. Acceptance (assent) requires an absolute majority2 of thevote cast.Thus the European parliament, by refusing to give assent, could block any further

enlargements of the European Union. There is no option to amend any proposals.

4. Co-decisionThe power of co-decision was introduced through the Treaty on European Union. It means thatthe European Parliament and the Council of European Union have become almost equal partners

in the legislative process of the European Union. If effect, the European Parliament is consultedon three occasions (similar to the three readings of a bill in the British House of Commons) on

legislative proposals. The steps are consultation, co-operation and co-decision. If the options ofthe European Parliament are not accepted, the Council of European Union in now compelled to

explain its reasoning. The Council of European Union must also be unanimous in its rejection ofthe advice of the European Parliament.










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Voting System1. Simple Majority VotingA method of voting used in the Council of European Union. It is employed for the least

contentious of policies, such as procedural issues.Within the Council of European Union, each member state normally receives a set number of

votes in relation to its population size (see Table C3). With simple majority voting, however,each member state gets a single vote. Currently, 14 votes out of the 27 are required to be cast in

favour of a policy for it to be passed.

2. Qualified majority voting (QMV)This system is used for much decision-making in the Council of Ministers. Each member state isgiven a specified number of votes, dependent upon the population size of the country. Table C3

details the weights of votes for each member states.

From 1 January 2007, with the enlargement of the European Union (EU) to include Bulgaria andRomania, the weightings of QMV changed. Two conditions have to be met. The first is that amajority of members must support the motion (often it has to be two-thirds of members states.

Second, 255 votes (out of the total of 345) have to support the motion (which is about 74 percentof the total votes). Added to this, there could be a further requirements that the votes must

represent at least 62 per cent of the EU population (in the treaty 65%). Failure to do so would seethe decision not being adopted.

There were proposals within the draft European constitution to reform the system of QMV, as

well as to broaden the number of policy areas governed by this particular method of votingwithin the Council of Ministers. The proposal was to have a minimum of 55 percent of member

states (and 65 percent of the EU population) to support a particular proposal for it to be accepted.For proposals to be blocked, at least fourm member states would need to vote against them. This

would prevent the most populous states from blocking almost any legislation. Note that thelargest four countries (Germany, UK, France and Italy) comprise over half of the EU population

collectively they make up 259 million out of the total EU population of 492 million, or 52.5percent of the EU population.

3. Double majority voting:This system of voting has been utilized by the Council of European Union since November 2004

(although it was agreed at the Treaty of Nice in 2001). In effect, it takes qualified majority voting(QMV) one step further. Under QMV, it is possible for a majority of votes to be achieved

without a majority of countries or a majority of the European Union population actuallysupporting the legislative proposals. Double majority voting aims to prevent such a situation

from occurring. A member state can request verification that a vote that is passed under QMValso represents at least 62 per cent of the EU population. If it does not then the legislative

proposals may not be ratified. The draft European constitution had proposed to amend bothQMV weightings which build in the double majority requirements. (see also unanimous decision

making).


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Homework: Comparative Trade Policy

Name: Moti Shrees

Prof. S.H. Shin

1. Article 113 of Treaty ofRome 1957

ARTICLE 113

1. After the transitional period has ended, the common commercial policy shall be based onuniform principles, particularly in regard to changes in tariff rates, the conclusion of tariff and

trade agreements, the achievement of uniformity in measures of liberalisation, export policy andmeasures to protect trade such as those to be taken in case of dumping or subsidies.

2. The Commission shall submit proposals to the Council for implementing the commoncommercial policy.

3. Where agreements with third countries need to be negotiated, the Commission shall makerecommendations to the Council, which shall authorise the Commission to open the necessary

negotiations.

The Commission shall conduct these negotiations in consultation with a special committeeappointed by the Council to assist the Commission in this task and within the framework of

such directives as the Council may issue to it.

4. In exercising the powers conferred upon it by this Article, the Council shall act by a qualifiedmajority.

ARTICLE 114

The agreements referred to in Article 111(2) and in Article 113 shall be concluded by theCouncil on behalf of the Community, acting unanimously during the first two stages and by a

qualified majority thereafter.


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2. Monnet, Jean (1888-1979)

Jean Monnet is often seen as the founding father of the European Union. He was not a politicianbut rather an official. He drew up plans for a form of federal Europe during the interwar period.

These were shelved but Monnet came to the forefront of the next Eurupean project after WorldWar Two, influencing the then French Foreign Minister Robert Schuman. Monnet became the

first President of the High Authority of the European Coal and Steel Community (the precursorto the current President of the Commission).

1n 1953, Monnet was awarded the Charlernagne Award (or Karlspreis) for his outstanding

contributions to the process of European integration. Schuman also received the award, in 1958.Monnet was keen for Britain to be involved in the European project. However, he did note:

there is one thing you Brithish will never understand: an idea. And there is one thing you aresupremely good at grasping: a hard fact. We will have to make Europe without you but then

you will come in and join us. This was a profound observation, although the enthusiasm with

which Britain joined the then European Economic Community (EEC) and its participation sincedid not live up to Monnets hopes and dreams.


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Legislative Procedure1. Consultation procedureThis process enables the European Parliament to give opinion on a policy proposal from theCommission. The Council of European Union must consult with the European parliament but is

under no obligation to follow the Parliaments position. It had been initiated from Treaty of

Rome. Today, this is the first step in the legislative process. Subsequently there is co-operationand co-decision.

2. Cooperation procedureThis was introduced by the Single European Act. It increased the influence of the Europeanparliament in the legislative process, by giving it, in effect, a second reading. If the opinions of

the European parliament, as expressed in the consultation procedure, are not accepted, the co-operation procedure enables the Parliament to express their opinion about the position of the

Council of European Union. To amend or reject proposals from the Council of European Union,the European Parliament requires the support of an absolute majority of its members. However,

the Council of European Unionmay still veto the proposals of the Parliament. After this process,

there is now a third reading the co-decision process.

3. Assent ProcedureIt is particular power given to the European Parliament over particular policy areas, for

example enlargement. The power was granted under the Single European Act in 1987.Ultimately, the assent procedure gives the European Parliament a Yes/No option, which places

it on a par with the other institutions. Acceptance (assent) requires an absolute majority3 of thevote cast.Thus the European parliament, by refusing to give assent, could block any further

enlargements of the European Union. There is no option to amend any proposals.

4. Co-decisionThe power of co-decision was introduced through the Treaty on European Union. It means thatthe European Parliament and the Council of European Union have become almost equal partners

in the legislative process of the European Union. If effect, the European Parliament is consultedon three occasions (similar to the three readings of a bill in the British House of Commons) on

legislative proposals. The steps are consultation, co-operation and co-decision. If the options ofthe European Parliament are not accepted, the Council of European Union in now compelled to

explain its reasoning. The Council of European Union must also be unanimous in its rejection ofthe advice of the European Parliament.










28/29

Voting System1. Simple Majority VotingA method of voting used in the Council of European Union. It is employed for the least

contentious of policies, such as procedural issues.Within the Council of European Union, each member state normally receives a set number of

votes in relation to its population size (see Table C3). With simple majority voting, however,each member state gets a single vote. Currently, 14 votes out of the 27 are required to be cast in

favour of a policy for it to be passed.

2. Qualified majority voting (QMV)This system is used for much decision-making in the Council of Ministers. Each member state isgiven a specified number of votes, dependent upon the population size of the country. Table C3

details the weights of votes for each member states.

From 1 January 2007, with the enlargement of the European Union (EU) to include Bulgaria andRomania, the weightings of QMV changed. Two conditions have to be met. The first is that amajority of members must support the motion (often it has to be two-thirds of members states.

Second, 255 votes (out of the total of 345) have to support the motion (which is about 74 percentof the total votes). Added to this, there could be a further requirements that the votes must

represent at least 62 per cent of the EU population (in the treaty 65%). Failure to do so would seethe decision not being adopted.

There were proposals within the draft European constitution to reform the system of QMV, as

well as to broaden the number of policy areas governed by this particular method of votingwithin the Council of Ministers. The proposal was to have a minimum of 55 percent of member

states (and 65 percent of the EU population) to support a particular proposal for it to be accepted.For proposals to be blocked, at least fourm member states would need to vote against them. This

would prevent the most populous states from blocking almost any legislation. Note that thelargest four countries (Germany, UK, France and Italy) comprise over half of the EU population

collectively they make up 259 million out of the total EU population of 492 million, or 52.5percent of the EU population.

3. Double majority voting:This system of voting has been utilized by the Council of European Union since November 2004

(although it was agreed at the Treaty of Nice in 2001). In effect, it takes qualified majority voting(QMV) one step further. Under QMV, it is possible for a majority of votes to be achieved

without a majority of countries or a majority of the European Union population actuallysupporting the legislative proposals. Double majority voting aims to prevent such a situation

from occurring. A member state can request verification that a vote that is passed under QMValso represents at least 62 per cent of the EU population. If it does not then the legislative

proposals may not be ratified. The draft European constitution had proposed to amend bothQMV weightings which build in the double majority requirements. (see also unanimous decision

making).


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4. Unanimous decision-makingUnanimous decision-making, or unanimity, was a result of the Luxembourg Compromise. In

effect, it means that all member states must be in support of a policy proposal in the Council ofEuropean Unionfor it to go ahead.

There was a reduction in the number of decisions subject to unanimity as a result of the Single

European Act. After that particular piece of legislation, many more decisions became subject otqualified majority voting (QMV). The number of areas which are now subject ot QMV hasgrown. There are, however, specific areas where unanimity is still required. One of the most

prominent of these is enlargement. For a new member to accede to the European Union, allmember states must be in support. An example of where unanimous support did not occur is the

Treaty of Nice. The Irish had to subject this treaty to a national referendum. It was defeated,which meant that the proposed enlargement of 2004 could not proceed. A second referendum

was held at a later date which enabled the enlargement to go ahead.

5. Absolute majority (in the European Parliament): Majority of the members who compriseParliament. In its present configuration (with 736 MEPs), the threshold for an absolute majority

is 369 votes (Note: In the elections in June 2009 which took place on the basis of the NiceTreaty, the number of MEPs was reduced to 736. With the entry into force of the Lisbon Treatyon 1/12/2009, the number will be increased to 754 once the new arrangements have been

completedand reduced to 751 for the elections in 2014. Consequently, the numbersnecessary toreach anabsolute majority will thus change to 378 and 376 respectively). Under the co-decision

procedure, an absolute majority is necessary in plenary session when voting on a second readingin order to reject the Council position at first reading or to adopt amendments.

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