The Amsterdam Summit in retrospect: Maastricht II and corporate lobby successes
he Treaty of Amsterdam is a messy one, reflecting the extensive horse-trading that took place during the Amsterdam Summit. At the closing press conference of the Summit, Dutch Prime Minister Wim Kok talked of successes and improvements in areas like democracy, employment and environment, but a closer look at the
Amsterdam Treaty shows that it is seriously questionable whether improvements have been made in these fields. Even more disturbing, the new treaty contains a large number of successes for corporate lobby groups such as the European Roundtable of Industrialists (ERT) and the European employers' federation UNICE. Their intensive lobby campaigns during the one and a half year of negotiations on the new treaty have not been in vain.
The claimed improvements in the field of environmental legislation may turn out to be only words. And the Employment Chapter is surely no more than just that. The majority of other changes in the new treaty pose absolutely no threat to the corporate agenda of cuts in public expenditure, deregulation, privatization, infrastructure expansion, global trade liberalization, and so forth.
This lead article is a preliminary analysis of some of the changes brought about in the new treaty, concentrating on those issues that have been most subject to corporate lobbying. The second part of the article gives an overview of other June Summit decisions which are of importance to corporate Europe.
Corporate demands for a new treaty
During the Maastricht revision process, UNICE and the ERT put forward the following demands for the new treaty:
* strengthening of the EU's decision making power and 'ability to act';
* confirmation of existing commitments, e.g. Economic and Monetary Union (EMU) and Single Market;
* avoidance of any new policies that endanger competitiveness (whether social, environmental or other policies);
* preparation for a rapid expansion eastwards.
Other more specific demands included:
* revision of Article 113 in order to give the EU more authority to negotiate international trade deals on behalf of all member states (this became an increasingly important demand towards the end of the Intergovernmental Conference, and was emphasized by both UNICE and the ERT);
* adoption of competitiveness as an official objective of the EU under the new treaty (UNICE).
And finally, corporate lobby groups had other demands for the Amsterdam Summit which were unrelated to the new treaty:
* proceeding with the Single Market Action Plan (demanded by both the ERT and UNICE)
* establishment of a new Competitiveness Advisory Group (favoured strongly by the ERT)
* moving ahead with introducing benchmarking as a tool in EU decision-making (demanded by both UNICE and the ERT).
In the last weeks before the Amsterdam Summit, UNICE concentrated on lobbying against the two proposals about which it was most worried:
Maastricht revisited; Institutional reforms
There were far fewer changes in the institutional structure of the EU than was intended at the outset of the Intergovernmental Conference (IGC) to revise the Maastricht Treaty. The use of qualified majority decisions in the Council of Ministers was extended on a number of fields, but the areas where qualified majority voting (and the corresponding co-decision procedure) might make a large difference, such as taxation (including environmental taxes) were not included. The European Parliament's powers were strengthened somewhat with the expansion of the co-decision procedure to a number of new areas. The powers of the President of the Commission were strengthened.
One of the main aims of the IGC was to prepare the Union for the accession of new member states by a thorough revision of voting procedures and national representation in all EU institutions. On this point the Amsterdam Summit totally failed, and on 10 September, just a day before the deadline for final changes in the draft treaty, the French, Italian and Belgian governments have submitted a two-paragraph declaration to be appended to the treaty, openly criticizing the lack of institutional reforms and insisting that such a reform is "an indispensable condition for concluding the first round of enlargement negotiations".
Employment and social policy
The Employment Chapter included in the new treaty has been criticized by the large trade unions assembled in the European Trade Unions' Confederation (ETUC) for being "too limited in scope" and only paying lip service to solving unemployment. On the other side, UNICE is quite satisfied. UNICE's Zygmunt Tyszkiewicz said: "We never wanted an Employment Chapter in the first place, but if we have to have one, then this version is not too bad."
In the Employment Chapter, EU governments commit themselves to "work towards developing a coordinated strategy for employment and particularly for promoting a skilled, trained and adaptable workforce and labour markets responsive to economic change". The EU is to include job creation in its considerations when it develops policy proposals. The chapter stresses the need for competitiveness, completion of the single market and economic growth. No concrete actions are outlined and there are no sanctions for governments not living up to the commitments of the chapter.
The Social Protocol, that was not signed by the previous conservative UK government and therefore annexed to the Maastricht Treaty, has been signed by the new UK government and is now included in the treaty itself as a chapter on Social Policy. The importance of the Social Chapter is very much open to debate. Until now, the European Works Council Directive and the Parental Leave Directive are the main outcome of the Maastricht Social Protocol.
The Amsterdam Treaty proclaims sustainable development as an official objective of the EU which must be integrated in all EU policies. The formulation of Article 100a, the so-called 'environmental guarantee', was also changed. Stricter national environmental legislation, even if it concerns new national measures which exceed the EU standard, may now be accepted by the European Commission if a country has specific circumstances which require such legislation and if this can be scientifically proven. The Commission has six months to block the national measures.
It is unclear whether the changes in Article 100a in fact allow for national environmental measures overruling Internal Market regulations. The European Environmental Bureau -- the Brussels-based coalition of environment and nature protection organizations -- has asked the member states' governments for a common interpretation of the new paragraph.
The Summit did not fulfill the European Commission's (nor the corporate lobby groups') dreams of changing Article 113 of the treaty. The proposed changes would have given the Commission the power to negotiate on behalf of all Member States in external trade agreements on services and any kind of intellectual property rights (IP), for instance the WTO/TRIPS Agreement (TRIPS -- Trade Related aspects of Intellectual Property Rights) and the upcoming Multilateral Agreement on Investment (MAI).
Due to national resistance against the proposed changes in Article 113, notably by French President Jacques Chirac, deals made by the EU on the aforementioned areas will still have to be ratified by the Council of Ministers and by all 15 EU countries. The final text of Article 113 in the Amsterdam Treaty must have been disappointing for the industry lobbies, although it allows the Council of Ministers the opportunity to transfer national sovereignty over international trade negotiations on services and intellectual property rights to the European Commission without the need for a new treaty revision. As both UNICE and the ERT have been very keen on this extension of the powers of the Commission, one may expect that this issue will continue to be subject to intensive lobbying over the next months.
Corporate lobby reactions to the new treaty
"A mixed result, but generally positive", was the conclusion of UNICE in its initial reaction to the Amsterdam Summit. In a press statement, UNICE president Perigot was particularly pleased that the EU had stuck to its prior commitments and taken a large step towards Economic and Monetary Union (EMU). UNICE is less pleased with the outcome of the revision of Article 113 on international trade negotiations and the 'environmental guarantee' (Article 100(a)4). It also expressed concern about the new Article 7d on public services of general interest, which states that "services of general economic interest [...] operate on the basis of principles and conditions which enable them to fulfil their missions". UNICE fears this article might offer opportunities for protection of state companies and delay the privatisation and deregulation wave.
In an evaluation of the impacts of the new treaty on employment and competitiveness, UNICE Secretary General Tyszkiewicz expresses his satisfaction with the treaty's commitment to the preservation of competitiveness. He concludes that "the new Employment Chapter will neither do good nor harm", but was encouraged by the new Article 3.2 which states that "employment shall be taken into consideration in the formulation and implementation of Community policies and activities". If "applied properly", Tyszkiewicz speculates, it could act as "a brake on initiatives that hurt European competitiveness, such as proposals to increase energy taxes".
ERT Secretary General Keith Richardson's comments on the new treaty give a revealing insight into how European industrialists envisage the reshaping of Europe and its political system: they would see the as a centralized superpower which can defend the interests of TNCs both in Europe and in the rest of the world.
Richardson welcomes the reforms agreed at the Amsterdam Summit, but also states that the IGC failed to deliver "the real need for reform". "The EU economy is in many ways as strong as the American", Richardson explains in his analysis of the treaty, "but we lose out in Europe because our economic structures are still too fragmented and our political system is slow to take decisions and stubbornly resistant to innovation". Richardson goes several steps further when he comments on the discussions about a Citizens' Europe: "what citizens want above all is jobs, which can only come from a dynamic and competitive economy, which our present political system is not geared up to achieve". In regards to the changes in the treaty, Richardson is particularly pleased with the increased authority of the Commission President.
Like UNICE, the ERT is very unhappy with the failed attempt to extend EU powers over external trade (Article 113) and the 'environmental guarantee' (Article 100a). Richardson is also disappointed by "the little progress towards a unified foreign policy to protect Europe's overseas interest and none at all towards the integrated defence which we need if we are to preserve competitive defence industries".
The corporate lobby groups can be rather satisfied with the new treaty. The powers of the EU were strengthened in a number of fields, although less than hoped for by the ERT and UNICE. But then, the Amsterdam Summit came at a time when the accomplishment of Economic and Monetary Union was an absolute priority for the EU. Because of massive cuts in social expenditures to reach the EMU criteria, many national governments find themselves under significant pressure. Therefore, a controversial new treaty, risking a negative popular reactions like the Maastricht Treaty had done five years ago, had to be avoided at all costs.
The expansion towards Central and Eastern Europe, a major demand of the ERT and UNICE, is on track. In July, the Commission proposed to start membership negotiations with Poland, Hungary, the Czech Republic, Estonia and Cyprus, and these countries are now working hard to bring their legislation in line with EU single market rules.
In general, one may conclude that under the Amsterdam Treaty the EU will continue more or less along the lines set out in the Maastricht Treaty. Over the past five years, this regime has proved to be extremely beneficial to the corporate lobby. Social movements dreaming of the IGC turning the EU into "a social and ecological Europe" have every reason to be disappointed.
UNICE and ERT should have no reason to complain about the role played by Commission President Santer in the IGC negotiations. In a letter to the heads of state and government sent just a few days before the Amsterdam Summit, Santer praised the Dutch draft for the treaty and warned against "last-minute attempts to dilute the text". He especially asked attention for Article 113: "Any further weakening", Santer warned, "would cause it to lose all meaning and would even be counterproductive." In his letter, Santer also demanded the European Council to "give a strong signal for the completion of the single market".
Other decisions at the Amsterdam Summit
In case there were any reason for UNICE and the ERT to be dissatisfied with the new treaty, the other decisions made at the Amsterdam Summit should have made them jubilant, as they fulfill the corporate agenda to the fullest.
Stability Pact EU heads of state and government showed no hesitance about continuing along the path towards EMU. They signed the so-called Stability and Growth Pact that was a result of the EU Summit in Dublin (December 1996). With this agreement, member states commit themselves to continued 'budgetary discipline' after the EMU is in place, a discipline that also applies to future EMU members. If a member state's budgetary deficit drops below 3% of GDP and remains at this level, it will be punished with large fines. Exceptions will be made only if a country is in a serious crisis (defined as a decrease in GDP of more than 2% per year). The long term aim of the Stability Pact is budgetary balance, or even surplus. The Council also endorsed the proposed design for Euro coins and notes.
Employment Summit in Luxembourg
The Amsterdam Summit decided to hold a special Employment Summit in Luxembourg this autumn "in order to maintain momentum in fostering economic growth and fighting unemployment". This summit is to "review progress in the implementation of, among others, the initiatives concerning job creating potentials for small and medium-sized enterprises, a new Competitiveness Advisory Group, the study of good practices on employment policies of the Member States, and the initiatives of the European Investment (EIB) in creating employment opportunities".
There is no need to worry about the corporate lobby groups, however, as the vision on unemployment presented in the Presidency Conclusions is almost identical to that promoted by UNICE and the ERT. The Council wants "more attention to be given to improving European competitiveness as a prerequisite for growth and employment". The member states are to "promote a skilled and adaptable workforce and flexible labour markets responsive to economic change" so the EU can "remain globally competitive". Moreover, the European Council recommends a "reduction in the overall tax burden" and "a restrictive restructuring of public expenditure", to "encourage investment in human capital, research and development, innovation and the infrastructure essential to competitiveness". The Council encourages "training and lifelong learning" in order to improve "the employability of workers". The European Investment Bank is to play a more important role in the future, for instance through financing "high technology projects of SMEs" and through "granting very long term loans" for the Trans-European Networks infrastructure projects.
Not surprisingly, the ERT's Keith Richardson is satisfied with the tone during the Amsterdam Summit: "They talked about employment, the top political issue, with a clear focus on the right policies -- competitiveness, innovation, employability and flexible labour markets".
Action Plan for the Single Market
The European Council agreed on the European Commission's proposed Action Plan for the Single Market, which aims to open up full EU-wide competition in a number of new fields including energy, transport and telecommunications. The Council welcomed "the commitment by the next three Presidencies to give priority to the Action Plan" in order to "remove remaining obstacles so as to ensure that the full potential benefit of the Single Market is realized". The aim of the Action Plan is to "remove remaining obstacles" before 1999, and for that purpose the actions to be taken have been divided into three phases. The first phase includes liberalization of the telecommunications and electricity sectors (respectively before January 1998 and February 1999) as well as public procurement and mutual recognition legislation. Phase 2 covers measures already proposed but waiting for approval by the European Parliament, including the directives on protection of biotechnology inventions and on liberalization of gas supply. The third phase consists of measures which are still to be proposed, on areas like taxation, energy taxes, cross-border mergers and much more.
The European Council also confirmed the proposal from the Industry Ministers' Council meeting of 24 April 1997 to organize an annual debate on competitiveness based on a benchmarking programme to be developed by the Commission (see also article on Benchmarking group). "The competitiveness of European industry", the Presidency Conclusions state, "provides the foundation for growth, creating jobs and raising living standards"[fn29].
UNICE Contribution to the Intergovernmental Conference, 15 March 1996
François Perigot, Letter to Irish President John Bruton, 23 September 1996
Opinion on conclusion of the Intergovernmental Conference, UNICE, 30 April 1997.
Message to the Amsterdam Summit, UNICE, 6 June 1997. Press release on the outcome of the Intergovernmental Conference, UNICE, 18 June 1997
See also: "Doing Business at Maastricht II" in Europe, Inc. -- Dangerous Liaisons Between EU Institutions and Industry, Corporate Europe Observatory, Amsterdam, May 1997.
6 The co-decision procedure has been extended to include decisions on employment incentives, customs cooperation, social policy, equal opportunities, public health, transparency and countering fraud. Large policy areas (e.g. harmonization of legislation, agriculture, transport, taxation, industry, cohesion and Common Foreign and Security Policy and Justice and Home Affairs) remain under the consultation procedure, with very limited power for the European Parliament.
8 All references to Amsterdam Treaty articles etc. refer to the Draft Treaty of Amsterdam (SN3111/97), Brussels, 11 July 1997 as printed in Challenge Europe; Making Sense of the Amsterdam Treaty, The European Policy Centre, Brussels, July 1997.
12 Promotion of sustainable development is included in the Preamble of the Treaty. Elsewhere (Article B) it describes the objective of "a high level of protection and improvement of the quality of the environment". The Commission is to "prepare environmental impact assessment studies when making proposals which may have significant environmental implications".
13 One of the many uncertainties concerns the fact that use of the paragraph has to be justified with "new scientific evidence". It seems like a more flexible wording than the one used in the Maastricht Treaty ("scientific facts"), but it is unlikely to be sufficient for instance to argue for stricter national legislation on the ground of the precautionary principle. The Commission's interpretation of what constitutes "new scientific evidence" is crucial and might block any new national environmental measures. The condition that use of the guarantee has to be based on a problem which is "specific to that Member State" seems a clear weakening of the paragraph. This can block efficient use of the paragraph as most environmental problems are the same for industrialized countries like the EU ones. The same goes for the formulation that stricter national rules can only be accepted if they are not an "obstacle to the functioning of the Internal Market".
19 In article 2 of the Amsterdam Treaty, the promotion of "a high degree of competitiveness" is defined as one of the general Community objectives. In article 117 (the first article of the Social Chapter), the "need to maintain competitiveness of the Community economy" is now stated as a premise for EU social policy.
21 In the area of military integration there were fewer changes than first expected. Some further cooperation and coordination will be aimed for, but there will be no merger of EU and the Western European Union (a military cooperation agreement between ten EU countries, concluded in 1954) in the near future. The possible EU-WEU merger will be on the agenda of the next IGC.