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Human Resource Development (HRM-627)

Lesson 43

COORDINATION IN GOVERNANCE: AN EXAMPLE OF EU

The open method of coordination or OMC is a relatively new and intergovernmental means of governance

in the European Union, based on the voluntary cooperation of its member states

Overview

The open method rests on soft law mechanisms such as guidelines and indicators, benchmarking and sharing

of best practice. This means that there are no official sanctions for laggards. Rather, the method's effectiveness

relies on a form of peer pressure and naming and shaming, as no member states wants to be seen as the worst

in a given policy area.

Generally, the OMC works in stages. First, the Council of Ministers agrees on (often very broad) policy goals.

Member states then transpose guidelines into national and regional policies. Thirdly, specific benchmarks and

indicators to measure best practice are agreed upon. Finally, results are monitored and evaluated. However, the

OMC differs significantly across the various policy areas to which it has been applied: there may be shorter or

longer reporting periods, guidelines may be set at EU or member state level and enforcement mechanisms may

be harder or softer.

Generally, the OMC is more intergovernmental in nature than the traditional means of policy-making in the

EU, the so-called community method. Because it is a decentralised approach through which agreed policies are

largely implemented by the member states and supervised by the Council of the European Union, the

involvement of the European Parliament and the European Court of Justice is very weak indeed. Formally, at

least, the European Commission has primarily a monitoring role; in practice, however, there is considerable

scope for it to help set the policy agenda and persuade reluctant Member States to implement agreed policies.

Although the OMC was devised as a tool in policy areas which remain the responsibility of national

governments (and where the EU itself has no, or few, legislative powers) it is sometimes seen as a way for the

Commission to "get a foot in the door" of a national policy area.

The OMC was first applied in EU employment policy, as defined in the Amsterdam Treaty of 1997, although it

was not called by this name at the time. It was officially named, defined and endorsed at the Lisbon Council for

the realm of social policy. Since then it has been applied in the European employment strategy, social inclusion,

pensions, immigration, education and culture and asylum and its use has also been suggested for health as well

as environmental affairs. The OMC was also frequently debated in the European Convention.

Historically, the OMC can be seen as a reaction to the EU's economic integration in the 1990s. This process

reduced the member states' options in the field of employment policy. But they were also weary of delegating

more powers to the European institutions and thus designed the OMC as an alternative to the existing EU

modes of governance.

In the following, the OMCs in the areas of employment and social protection will be analysed because they are

usually considered the most developed ones. A brief introduction to the "upcoming" OMC in health is also

given. However, bear in mind that the open method seems to become more and more widespread, including

areas such as immigration and asylum which are not discussed here.

Development of the OMC: from EMU to the EES

EMU and in particular the Stability and Growth Pact as well as the Broad Economic Policy Guidelines (which

were introduced as an instrument to realise the goals set down in the Lisbon Agenda) can be considered a sort

of "proto-OMC" with comparatively hard sanctioning mechanisms. As a reaction to the economic integration

of Europe, the European Employment strategy (EES) evolved in the 1990s with the rationale of rebalancing

monetary and economic integration. The original EES thus consisted in more or less replicating the EMU

process with mid-term objectives, indicators and pressure for convergence. Legitimised through the

Amsterdam treaty, the EES then became a process in its own right. As mentioned above, its' principles were

generalized and christened "Open Method of Coordination" at the Lisbon Summit (2000). Finally, the third

phase of the EES began with the five year review in 2003 where the EES was repoliticised, due to the growing

dominance of right wing governments in the EU. Nowadays the EES is a political compromise aimed to

exclude both pure neo-liberal and social democratic approaches.

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Human Resource Development (HRM-627)

The OMC in Social Inclusion

The social inclusion OMC, by contrast, was not directly linked to the EMU debate. Social inclusion was for

many years a controversial topic to address at the European level due to the subsidiarity concept. In 1999 the

Commission finally adopted a communication for a concerted strategy on social protection, proposing a Social

Protection Committee which was made official in the Nice Treaty. Said committee was responsible for the

initial standard setting exercise. Next, each member state was asked to benchmark its situation by producing a

two year national action plan (NAP or NAPincl), presenting national-level strategies for improving the

situation. These were made available in June 2001. 18 months later the EU released a joint report on social

inclusion where the member state's approaches were compared and contrasted and recommendations were

given. While the NAPs form a first level of action, the Community Action Programme to combat poverty and

social exclusion, which aims to improve cooperation between the member states, can be considered the second

level of action.

In the social inclusion OMC some funds were made available for NGOs and consequently its' "inclusive"

approach to civil society has been favourably commented upon. However, this is not necessarily the case for

other OMCs. According to FEANTSA (2005), the Pensions OMC is more closed and involves mainly the

Commission and national civil servants.

Comparing the employment and social inclusion OMC

When comparing the EES and social inclusion OMC, Pochet (2005: 43) notes that the first seems to go more

in a direction of centralization, naming and shaming without any broad discussion about the content on the

European level (top-down). The second process goes more towards an experimental dynamic with the

involvement of local and regional actors (bottom-up). However, the author also notes that this is probably an

over-generalization with tensions between centralization and decentralization being present in both forms.

Due to their different nature the impact of those two OMCs can be quite diverse as well. Ferrera and Sacchi

(2004) analyse the impact of the EES and the Social Inclusion OMC in Italy. They conclude that the

autonomous impact of the OMC has been relatively significant in the case of employment and relatively

insignificant in the case of social inclusion. One key difference was the treaty status of the employment OMC

which forced the Italian authorities to comply - this component was lacking for social inclusion. Furthermore,

the issue of unemployment and labour market reform was simply more salient than social inclusion.

Health

As member states increasingly face common concerns in healthcare (such as demographic ageing), the

application of the OMC has been discussed. In March 2004 the European Parliament passed a resolution

calling on the Commission to present a proposal for the use of the OMC in health and long term care. The

April 2004 Communication by the Commission recommended to apply the OMC to the development and

modernization of health care provision and funding. As potential advantages the Commission pointed to:

· greater consistency with existing social protection mechanism

· closer coordination with other political processes such as the EES (in particular regard to the ageing

workforce), As a result the issues of health should better reflect the Lisbon strategy

· involving the many actors in the sectors, particularly the social partners, the health care profession and

patient representatives

Further steps have been taken to start the introduction of the OMC.

Indicators and streamlining

The choice of indicators is of vital consequence for the OMC and critics have argued that, for instance in the

Social Protection OMC, the quality of the indicators is not high enough or oriented too much on economic

criteria and not social ones. Also, for health the comparability of national data has been doubted.

In the social protection field the Commission is preparing to streamline the methods used in the different

OMCs (social inclusion, pensions etc.). In this context, critics fear that the number of indicators will be too

much reduced

Source: http://en.wikipedia.org/wiki/Open_Method_of_Coordination

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