On March 11, 2011 the Heads of State or Government of the Eurozone endorsed the Pact for the Euro. At the 24/25 March 2011 European Council, the same Heads of State or Government agreed on the Euro Plus Pact and were joined – hence the ‘Plus’ – by six others: Bulgaria, Denmark, Latvia, Lithuania, Poland, Romania (leaving only the UK, Czech Republic, Sweden and Hungary out).
The objective of the pact is to foster competitiveness, foster employment, contribute to the sustainability of public finances and reinforce financial stability. In the Euro-Plus-Pact the Heads of State or Government have entered into commitments on a number of policy areas, in which member states are competent.
What political/legal difficulties did Finland encounter in the negotiation of the Euro-Plus-Pact, in particular in relation to the implications of the Pact for (budgetary) sovereignty, constitutional law, socio-economic fundamental rights, and the budgetary process.
The matter was debated in the Parliament several times. The Government (memorandum E 146/2010 vp) argued for measures in four areas: increasing employment, rising productivity, reducing debt and improving coordination in taxation. The Government stressed that a majority of these issues fall under national competence and that the envisaged Pact should not involve Treaty changes. Existing procedures, such as the European Semester, Europe 2020 etc) should be fully used.
The most crucial debate in Finland took place in the Parliament’s Grand Committee under Section 97 of the Constitution, which establishes that “[t]he Prime Minister shall provide the Parliament or a Committee with information on matters to be dealt with in a European Council beforehand and without delay after a meeting of the Council. The same applies when amendments are being prepared to the treaties establishing the European Union.” Prime Minister Kiviniemi appeared before the Grand Committee on 10 March 2011 to present the agenda of the European Council. The Committee held a debate and voted on its position before the adoption of statement (SuVX 165/2010 vp) indicating that as far as urgent measures relating to financial stability in the euro area and the European Stability Mechanism were concerned, based on the information available no factual measures could be taken in the European Council. The Committee also pointed out that the Government had not asked for the powers to increase Finnish guarantee commitments. If this matter was to change, the Committee reserved a right to formulate its position prior to decision-making at EU level.
The Committee was convened again on 11 March 2011 in the evening to consider the events in Brussels based on a memorandum with attachments from the Prime Minister’s office, for which confidentiality had been requested and was granted until the end of the European Council meeting. Questions raised during the debate involved questions relating to an increase in financial commitments and the proposed Euro-Plus Pact, which was seen to be problematic since it contained interference with pay policy, opening-up of closed sectors, moving the emphasis of taxation to consumers and the weakening of pensions and social security. Draft Conclusions were also not seen to present clear bail-in provisions or satisfactory obligations for Ireland. Following the debate, the Committee approved Statement (SuVL 171/2010 vp) indicating that the Committee supported the Government position, however, with ten dissenting opinion.
What other information is relevant with regard to Finland and the Euro-Plus-Pact?