system according to which a country or community manages its income and expenditures
Economic and monetary union (EMU) implies close coordination of national economic policies, which have thus become a matter of common concern. In practical terms, the Council, acting by a qualified majority on a recommendation from the Commission, formulates draft guidelines which are sent to the European Council. In the light of the latter's conclusions, the Council, again acting by qualified majority, adopts a recommendation setting out the Broad Economic Policy Guidelines (BEPG) of the of the Member States and the Community and informs the European Parliament (Article 99 of the EC Treaty). These annual broad guidelines are the central element of coordination for the Union's economic policies.
In addition to these broad guidelines, the EC Treaty lays down other economic policy provisions in Title VII, Articles 98 to 104, including:
•multilateral surveillance: the Member States, meeting within the Council, monitor economic developments and the application of the broad economic policy guidelines; they may issue recommendations to the government of a Member State which is failing to comply with the guidelines;
•the excessive-deficit procedure: the Member States must avoid excessive government deficits, and it is up to the Commission to ensure that this principle is complied with; Article 104 lays down the relevant procedure, conditions, exceptions and consequences, which may include fines;
•financial assistance: when a Member State is experiencing severe difficulties , the Council is able, under certain conditions, to grant it financial assistance;
•prohibition against assuming the commitments of other Member States: the Community or the Member States may not assume the commitments of other Member States;
•prohibition of privileged access: it is prohibited to grant public bodies, authorities or undertakings privileged access to finance.
Title VII of the EC Treaty also lays down the institutional provisions applicable to the European Central Bank (Articles 112 to 115) and the transitional provisions necessary for the implementation of the various stages of EMU (Articles 116 to 124).
See:
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Cooperation procedure•
Consultation procedure•
Convergence criteria •
Council of the European Union•
Economic and monetary Union (EMU)•
Employment•
European Central Bank (ECB)•
European Commission •
European Council •
European Parliament •
Monetary policy •
Qualified majority •
Stability and Growth Pact
