Corporate Europe Observatory

Exposing the power of corporate lobbying in the EU

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EU's Silent Revolution in Economic Governance Undermines Democratic Control

Brussels, 19 January 2011 -- EU member state parliaments look set to lose important powers to control economic and social policy as a result of the EU’s response to the economic crisis according to a new article from Corporate Europe Observatory which analyses the proposals, likely to come into force in 2011, and warns that they will lead to a reduction in democratic accountability and public influence. [url= EUtopia[/url] also questions the role of big business lobby groups in setting the economic agenda [1].
Billed as a “silent revolution” by European Commission President José Manuel Barroso [2], the proposals include the introduction of the European Semester [3] to monitor national budgets; tough new rules to enforce the Growth and Stability Pact, requiring member states to reduce debts; and a new early warning system which will allow the European Commission to intervene where member states show signs of “macroeconomic imbalance” [4].
Member states may face enormous economic sanctions if they fail to impose the economic ‘cures’ recommended by the EU Commission and Council – including potential fines for countries within the eurozone and the withdrawal of EU funding for non-euro members.
The proposals have been welcomed by big business lobby groups including BusinessEurope and the European Roundtable of Industrialists, which has been promoting this form of economic governance to improve competitiveness for the last decade.
Report author Kenneth Haar said: “The EU Commission and Council, backed by big business, have put forward radical proposals to fundamentally change the way in which EU member states govern their national economies – and European citizens are being given no opportunity to discuss what these changes mean. The proposals are likely to mean EU-imposed austerity measures, without any opportunity for public influence. Member states will be required to cut social spending, slash wages and workers’ rights, while privatising basic services in the name of greater efficiency. These are important issues in a democracy and should be opposed.”
The European Parliament will consider the new proposals in April 2011, with a final vote currently scheduled for June 2011.
Contact: Kenneth Haar, [][/url]
[1] Corporate EUtopia – how new economic governance measures challenge democracy, Corporate Europe Observatory, January 2011, see:
[2] José Manuel Barroso at the European University Institute, Florence, 18 June 2010. Video available at [url=]
[3] The European Semester began on Wednesday 12 January 2011. See: European Commission, COM (2010) 367/2, page 11-14, [url=
[4] European Commission; "Reinforcing economic policy coordination", COM (2010) 250 final, 12 May 2010, [url=

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