Nice summit agrees new Treaty and reaches consensus on worker involvement in European Company Statute
A European Council meeting was held under the French Presidency in Nice on 7-9 December 2000. The summit reached agreement on a new Treaty, and also achieved a consensus on the long-standing proposals for worker involvement in the European Company Statute.
Heads of state and ministers from all EU Member States attended a European Council summit in Nice on 7-9 December 2000, under the outgoing French Presidency which held office during the second half of 2000, in order to debate a range of issues including reform of Community institutions. Discussion of institutional reform, in the form of the Intergovernmental Conference (IGC), was initiated in February 2000 (EU0002229F) in order to tie up some of the "loose ends" which were perceived to have been left over from the Amsterdam Treaty negotiations, concluded in the summer of 1997 (EU9707135F).
Consensus on European Company Statute proposals
In terms of social policy, arguably the most significant development to take place at the Nice summit was a consensus on the worker involvement provisions of the proposed European Company Statute. This proposal, which has been debated in a variety of forms for some three decades, has been worked on intensively over the past two years under successive Council Presidencies (EU9911211F). However, although progress had been made during this time, all efforts to reach agreement had previously failed. The most recent discussion took place at the 27–28 November 2000 Employment and Social Policy Council of Ministers (EU0012287F), where the matter was referred for discussion to the Nice European Council.
According to the Nice summit conclusions, the agreement, in order to take into account different national employment relations systems, allows Member States the option of whether or not to transpose into their national law the fall-back reference provisions (which apply where no agreement can be reached between management and employee representatives) relating to board-level employee participation applicable to European companies constituted by merger. In order for a European company to be registered in a Member State which has not transposed these reference provisions, either: an agreement must have been concluded on the arrangements for worker involvement in that company, including board-level participation; or none of the companies involved in the merger must have been governed by board-level participation rules prior to the registration of the European company. On this basis, the European Council called on the Council to complete before the end of 2000 the texts enabling the European Company Statute to be established.
An extraordinary Employment and Social Policy Council was to be convened on 20 December 2000 in order to secure agreement on a redrafted text. The text will then be forwarded to the European Parliament (EP) for an opinion, as it is many years since the EP has seen a formal draft of the text.
Institutional reforms
After a total of five days of debate, Ministers succeeded in agreeing amendments to the Treaty establishing the European Community (TEC) and the Treaty on European Union (TEU), in the form of a new Treaty of Nice. The negotiation of a new Treaty, so soon after Amsterdam, was deemed to be necessary in order to ensure the smooth enlargement of the EU over the coming decade. In particular, it was deemed necessary to extend qualified majority voting, reweight the votes in the Council of Ministers and impose some limits on the number of members of the European Commission.
Reweighting of votes
A reweighting of votes in the Council of Ministers was held to be necessary in order to ensure that representation remains fair once the EU has admitted all the – mainly small – applicant countries. Under the new system, which will come into force in January 2005, the votes of Member States in the Council of Ministers will be entirely reweighted as follows:
| Country | Current number of votes | Number of votes from 2005 |
|---|---|---|
| Austria | 4 | 10 |
| Belgium | 5 | 12 |
| Denmark | 3 | 7 |
| Finland | 3 | 7 |
| France | 10 | 29 |
| Germany | 10 | 29 |
| Greece | 5 | 12 |
| Ireland | 3 | 7 |
| Italy | 10 | 29 |
| Luxembourg | 2 | 4 |
| Netherlands | 5 | 13 |
| Portugal | 5 | 12 |
| Spain | 8 | 27 |
| Sweden | 4 | 10 |
| United Kingdom | 10 | 29 |
The number of votes to be allocated to the applicant countries upon joining the EU is as follows:
| Country | Number of votes |
|---|---|
| Poland | 27 |
| Romania | 14 |
| Czech Republic | 12 |
| Hungary | 12 |
| Bulgaria | 10 |
| Slovakia | 7 |
| Lithuania | 7 |
| Latvia | 4 |
| Slovenia | 4 |
| Estonia | 4 |
| Cyprus | 4 |
| Malta | 3 |
Once the EU has enlarged to 27 Member States, 258 votes will be needed for a qualified majority, representing 62% of the EU population.
Size of the Commission
From January 2005, the Nice Treaty states that all Member States may appoint a Commissioner, thus causing the Commission to increase from its current size of 20 Commissioners as new members join. However, it goes on to say that when the EU comprises 27 Member States, Commissioners will be chosen "on the basis of levelling rotation", the details of which will be decided by unanimous Council vote.
Extension of qualified majority voting
The extension of qualified majority voting (QMV) was deemed essential in order to ensure that the decision-making process of an enlarged EU runs smoothly in the future.
Many of the Articles upon which social policy instruments are based are already subject to qualified majority voting, with the notable exceptions of Article 13 and Article 137(3). The agreed reforms state that in the case of three of the areas under Article 137(3) – protection of workers where their employment contract is terminated, representation and collective defence of the interests of workers and employers, including co-determination, and conditions of employment for third-country nationals legally residing in Community territory – the Council may, by unanimous decision after consulting with the EP, apply the "co-decision" procedure (Article 251), which is subject to QMV. Further, Article 13 has been amended to state that QMV may apply when the Council adopts Community encouragement measures "other than any harmonisation of the legal and regulatory provisions of the Member States". In addition, Article 62 on the free movement of third-country nationals will be subject to QMV from 1 May 2004.
Charter of fundamental rights
The Nice summit also saw the joint proclamation by the Council, the European Commission and the EP of the EU Charter of fundamental rights (EU0011278N). Broad agreement had already been reached in both the Council of Ministers and the EP (EU0012284N) on the content of the Charter, which sets out a variety of civil, social and human rights already found in a range of national and international instruments. This meant that the proclamation of the Charter was thus more or less a formality.
The controversial issue was therefore the legal status of the Charter – employee representative groups and some Member States were keen for it to be incorporated under Article 6 of the TEU. However, other Member States, including the UK, were anxious that it should not have Treaty basis. The text was not included in the TEU at Nice and the issue has essentially been put off for discussion during the Swedish and possibly the Belgian Presidencies in 2001.
Social agenda
Finally, the Council approved the European Commission's five-year social policy agenda (EU0007266F), which sets out priorities for action in the social field over the coming five years. The Council of Ministers will examine each spring how the agenda is being implemented. The first such meeting will be held in Stockholm in March 2001.
Commentary
The draft Treaty of Nice will now be forwarded to all Member States for ratification by national parliaments, a process which could take up to 18 months. Thus, the new Treaty will in all likelihood come into force around the middle of 2002. However, despite agreement on this new Treaty, a further IGC is expected to be convened for 2004 in order to settle a range of remaining outstanding issues concerning institutional reform, such as exactly which procedures will be used to rotate Commissioners once the EU has 27 Member States.
The provisions relating to the extension of QMV may serve to speed up decision-making in social policy areas, although from a reading of the draft amendments to the Treaty, it would appear that there will still be a national veto as the Council must decide by unanimous vote to apply Article 251. The application of QMV to certain Article 137(3) areas, in particular that of protection in the case of the termination of the employment contract, is unlikely to be uncontroversial.
Arguably the most far-reaching event of the Nice summit in the industrial relations field was the consensus on the worker involvement proposals in the European Company Statute. It is largely these particular aspects which have been blocking agreement on the Statute for a number of years. Although final agreement is still to come, it looks as though the Nice summit may have achieved the breakthrough which could unblock this proposal after 30 years of debate. (Andrea Broughton, IRS)
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