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'Governance challenges and administrative capacities in Europe'

European Commission - SPEECH/14/316   10/04/2014

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European Commission

[Check Against Delivery]

Maroš Šefčovič

Vice-President for Inter-institutional relations and administration

'Governance challenges and administrative capacities in Europe'

Hertie School of Governance,

Berlin, 10 April 2014

Sehr geehrte Damen,

Sehr geehrte Herren,

es ist mir eine große Ehre, heute vor Ihnen – hier an der renommierten Hertie School of Governance – sprechen zu dürfen.

Die Welt, in der wir heute leben, hat sich durch die ökonomische Krise grundlegend geändert.

Although its roots were in the US banking sector, the crisis soon revealed structural flaws in the economic architecture here in Europe as well.

It exposed the inherent fragility of the Eurozone in particular and the wider EU economy in general, and proved a stark reminder that our efforts to improve education levels and access to labour markets still had a long way to go to achieve success.

In short, the EU has had five difficult years, when our efforts have been focused on strengthening our economic governance framework to ensure that we will never again be vulnerable to crises over which we have little or no control.

These measures have been far-reaching and in many ways ground-breaking.

It is perhaps ironic that it has taken a devastating economic crisis to show us that we in Europe are far stronger and more effective in everything we do if we do it together.

At a time when Euroscepticism and nationalism are on the rise, and some governments (not to mention citizens) are questioning the true value of the EU, the crisis has revealed the extent to which we are now dependent on each other.

Economic difficulties in one country are felt in many others, and not simply among those countries within the Eurozone.

The level of economic integration in the EU is far higher than anyone had really given it credit for prior to the crisis.

And this level of integration necessarily requires a pan-European approach, even in areas such as budgets and economic governance where national authorities had previously held the sole responsibility.

That is why we have introduced a number of checks and balances into the economic governance regime that involve a pooling and sharing of sovereignty on the part of the member states that is truly unprecedented.

Tougher sanctions on countries with excessive deficits, 'debt brakes' written into national constitutions, European level oversight of national budget proposals…these are just a few of the significant governance changes undertaken over the last five years.

The crisis has also of course been the catalyst for overhauling the wider banking sector in Europe, with the establishment of a banking union, complete with single supervisory and single resolution capacities.

And it has forced all of us, at national and European levels, to think long and hard about our wider governance models – their cost, their effectiveness, their responsiveness to the new challenges we face.

This of course covers public administrations, but it has wider repercussions as well.

Should we look more closely at the way our judiciaries work?

At our efforts to tackle corruption?

At our respect for the rule of law?

Do we need new rules governing the media?

There are plenty of questions – but what about the answers?

Well, first, I think it's important to stress that we have no need to reinvent the wheel.

While it is good to question if what we are doing can indeed be done better, the answer need not always be 'yes'.

In many areas, the current systems we have in place are more than fit for purpose, and have the necessary flexibility to adapt to the changing circumstances that the 'new normal' has brought.

But in others, it is clear, that we do have to find new ways of working, new responses to new challenges.

And that is what we have done, as I've already mentioned, for example in the area of economic governance.

We needed to adapt our governance methods to take into account the fact that the challenges we face are now largely borderless.

Where once there was a clear distinction to be made between EU and national levels, now the lines are far more blurred.

And even when issues can seem to be purely national – the collapse of a national bank, or excessive public debt, for example – they are now far more likely to have a spill-over effect into other countries as well.

Banks have long since stopped respecting national borders, and often have subsidiaries and offices across many member states.

National governments struggling to keep their debt under control and defaulting on their payments, especially if they are within the Eurozone, are not only risking their own economic future but also those of their neighbours.

The time for unilateral action is over; we have to find a better balance between protecting national interests and defending the common European good.

That is why we need more dialogue, more common action.

The assessment of Eurozone countries' budget proposals that I mentioned earlier is a good example of this.

The ability to set their own budget priorities is a long-standing right of the member states, and that of course is right and proper: they are by far the best placed to know what is needed where.

But there is also now a tradition at the European level of coordinating certain aspects of national budget programming.

This is particularly the case when it comes to specific investments in programmes and policies, notably those designed to boost economic growth and create jobs.

Every single member state has backed the EU's growth strategy, known as Europe 2020, and all of them already participate in the European Semester, the annual economic policy coordination programme designed to facilitate the implementation of that strategy.

Working together with the Commission, they have agreed to set annual reform and investment priorities tailored to their national requirements.

These are not priorities that can be imposed by Europe, even if the Commission had the power to do so, which it does not.

Because for investments and reforms to be successful, they need national ownership – they need to be seen to be responding to the direct needs of citizens in each member state, and of course these differ greatly.

That's why it has to be – and indeed is – a collaborative process.

And it is not just a dialogue between the Commission and national governments.

The challenge with any significant change to governance and policy coordination is to ensure true democratic legitimacy, and that of course means that we need a far greater role for parliaments, both national and European.

Since the adoption of the Lisbon Treaty five years ago, the role of national parliaments in the European governance system has been significantly boosted, in response to need to ensure that increased European action is seen to be democratic and transparent.

By supporting reform programmes agreed at European level, and by agreeing to share the oversight of budget proposals with the Commission, national parliaments are not simply ensuring that European actions are better tailored to national needs.

They are also effectively rubber-stamping those actions, showing the citizens of Europe that working together with their EU partners towards a shared goal can be beneficial for every member state.

And it reinforces the sense of national ownership of agreed reforms and investments – a vital part of ensuring that these reforms are carried out and investments made.

So much for the challenges, but what about our ability to respond to them?

Your report stresses the four administrative capacities necessary for good governance, and I think it's clear that in the new economic governance framework for the EU we have focused clearly on all four.

In terms of delivery capacity, we are clear about what needs to be done: a stronger Eurozone and general EU economy that will allow us ride out future economic storms and continue to generate wealth and jobs.

In terms of regulatory capacity, we've stepped up the shared oversight of the measures we need to introduce to achieve these goals, through the European Semester, through the new budget assessment procedure, through new sanctions for excessive deficits…

In terms of coordination capacity, we have not only agreed to a common approach to the problems we face – the Europe 2020 strategy – but we have also agreed to coordinate our efforts at the institutional level: the European Semester involves Commission, European Parliament, European Council, Council and national parliaments, all agreeing on the same issues.

And finally, in terms of analytical capacity, we have shown ourselves capable of identifying the issues at stake – through the Annual Growth Survey produced each year by the Commission, for example – and also of respecting national priorities when it comes to tackling those priorities – through the Country Specific Recommendations tailored to each country's individual needs. And of course we’ve also shown that we respect the need to ensure political legitimacy for these actions, through the greater involvement of national and European parliaments.

The crisis has also of course forced us to rethink the way we organise our public administrations.

Budgets are under pressure, austerity measures are necessary in some countries to get public finances back under control. In short, we all now need to do better with less.

The Commission has certainly not been spared this need. We have agreed to reduce staff levels by 5%, increase the retirement age, to extend the working week to 40 hours with no increase in salary, to freeze salaries for two years…all of which will lead to savings in excess of €5bn.

Yet this is the dichotomy at the heart of the European governance model: we are being asked to do more and more, both independently and in partnership with the member states, at the same time as we are expected to reduce staff numbers and lower administrative costs.

This is a challenge that we all share – but it can also be seen as an opportunity, a chance to change the way we do what we do.

Should we in the Commission, for example, do more to break out of our silos?

Like most public administrations, the Commission is run along policy lines, with each directorate general covering a specific policy area or areas.

But as the Europe 2020 strategy shows us, the lines between these areas are becoming increasingly blurred. The goals we set ourselves are interconnected: for example, Europe 2020 sets environmental goals (a 20% reduction in greenhouse gas emissions by 2020, for example) alongside educational (a 10% reduction in school drop-out rates) and scientific ones (investing 3% of EU GDP in R&D).

As the policies become more interconnected, so should the administrations behind them, for example through greater mobility of staff between DGs to ensure that knowledge learned in one post can be put to good use in another.

Or perhaps we need 'super DGs' to coordinate policies across a variety of areas?

Or a more country-specific focus within our existing set-up that allows policies to be more specifically focused along national requirements, as is the case already with the CSRs?

These are issues that may or may not be dealt with by the next Commission President, but they are certainly worth reflecting upon as we face the challenge of doing better with less.

At the same time, we need to ask ourselves what can we do to continue to attract the best talents that Europe has to offer – to compete effectively on the job market for the best lawyers, economists, statisticians, communicators, policy officers?

And how can the EU help national administrations be better organised to ensure that they have the capacity to use all the €352bn set aside for investment in regions and cities over the next seven years?

But we can also take up the challenge to create a public administration at the European level that better meets the demands of the people we are meant to serve – the citizens of Europe.

What kind of administration do they want to see?

One that allows them to have a greater say in the design and implementation of policies, for example through tools such as the European Citizens' Initiative (in essence a million-signature petition from citizens across the EU asking the Commission to act on a particular policy issue)?

One that allows them to see more clearly how proposed EU rules might affect their daily lives though pre-legislative impact assessments, and allows them to respond through public consultations?

One that meets their demand to make the most of the modern tools at our disposal by promoting e-democracy and e-government or by giving citizens the chance to share their thoughts and concerns with the decision-makers through social media?

One that is democratic but not bureaucratic, that continues to find ways to cut red-tape and reduce the cost of EU legislation on companies and individuals, that continuously looks at the usefulness and appropriateness of its laws and is not afraid to scrap them if they are no longer fit for purpose, as the Commission does regularly through its REFIT programme?

One that makes it easier for them to understand how the EU really works, to see more clearly who deals with what, in particular when it comes to making and implementing laws?

One that respects concerns about democratic legitimacy and transparency, for example through boosting the role of national parliaments, as the Lisbon Treaty did, or through establishing a register of lobbyists, as the Commission and Parliament have done?

As you can see, we are already some way down the road towards achieving this sort of European public administration – but we still have much more to do.

Polls indicate that next month's European elections will see a rise in the number of Eurosceptic or nationalist MEPs, responding to a growing disillusionment among voters about the real value of the EU.

Reforming our administrations, responding more effectively to the concerns of citizens, showing the real added-value of what we do at the European level, is a vital part of restoring faith in the EU project, of dispelling that disillusionment.

Ja, es ist eine Herausforderung. Aber auch eine Chance, die es zu nutzen gilt!

Haben Sie vielen Dank für Ihre Aufmerksamkeit!

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