Open Method of Coordination
Encyclopedia
The open method of coordination (OMC) is a relatively new and intergovernmental
means of governance in the European Union
, based on the voluntary cooperation of its member states.
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 state wants to be seen as the worst in a given policy area.
Generally, the OMC works in stages. Firstly, the Council of Ministers agrees on (often very broad) policy goals. Secondly, 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, c care, immigration, asylum, education and culture and research, 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.
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.
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.
, 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.
), 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:
Further steps have been taken to start the introduction of the OMC.
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.
Intergovernmentalism
-A theory of regional integration:The theory is not applied on European integration which rejects the idea of neofunctionalism. The theory, initially proposed by Stanley Hoffmann suggests that national governments control the level and speed of European integration. Any increase in power at...
means of governance in the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
, based on the voluntary cooperation of its member states.
Overview
The open method rests on soft lawSoft law
The term "soft law" refers to quasi-legal instruments which do not have any legally binding force, or whose binding force is somewhat "weaker" than the binding force of traditionallaw, often contrasted with soft law by being referred to as "hard law"...
mechanisms such as guidelines and indicators, benchmarking
Benchmarking
Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries. Dimensions typically measured are quality, time and cost...
and sharing of best practice
Best practice
A best practice is a method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark...
. 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 state wants to be seen as the worst in a given policy area.
Generally, the OMC works in stages. Firstly, the Council of Ministers agrees on (often very broad) policy goals. Secondly, 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
Council of the European Union
The Council of the European Union is the institution in the legislature of the European Union representing the executives of member states, the other legislative body being the European Parliament. The Council is composed of twenty-seven national ministers...
, the involvement of the European Parliament
European Parliament
The European Parliament is the directly elected parliamentary institution of the European Union . Together with the Council of the European Union and the Commission, it exercises the legislative function of the EU and it has been described as one of the most powerful legislatures in the world...
and the European Court of Justice
European Court of Justice
The Court can sit in plenary session, as a Grand Chamber of 13 judges, or in chambers of three or five judges. Plenary sitting are now very rare, and the court mostly sits in chambers of three or five judges...
is very weak indeed. Formally, at least, the European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
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
Amsterdam Treaty
The Amsterdam Treaty, officially the Treaty of Amsterdam amending the Treaty of the European Union, the Treaties establishing the European Communities and certain related acts, was signed on 2 October 1997, and entered into force on 1 May 1999; it made substantial changes to the Maastricht 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
European employment strategy
The Treaty of Amsterdam introduced the concept of a European Employment Strategy , following on from the integrated strategy for employment launched at the Essen European Council in December 1994....
, social inclusion, pensions, c care, immigration, asylum, education and culture and research, and its use has also been suggested for health as well as environmental affairs. The OMC was also frequently debated in the European Convention
European Convention
The Convention on the Future of Europe , was a body established by the European Council in December 2001 as a result of the Laeken Declaration...
.
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
Social protection
Social protection, as defined by the United Nations Research Institute For Social Development, is concerned with preventing, managing, and overcoming situations that adversely affect people’s well being...
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
EMUEconomic and Monetary Union of the European Union
The Economic and Monetary Union is an umbrella term for the group of policies aimed at converging the economies of members of the European Union in three stages so as to allow them to adopt a single currency, the euro. As such, it is largely synonymous with the eurozone.All member states of the...
and in particular the Stability and Growth Pact
Stability and Growth Pact
The Stability and Growth Pact is an agreement among the 27 Member states of the European Union that take part in the Eurozone, to facilitate and maintain the stability of the Economic and Monetary Union...
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.
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 subsidiaritySubsidiarity
Subsidiarity is an organizing principle that matters ought to be handled by the smallest, lowest or least centralized competent authority. The Oxford English Dictionary defines subsidiarity as the idea that a central authority should have a subsidiary function, performing only those tasks which...
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 centralizationCentralization
Centralisation, or centralization , is the process by which the activities of an organisation, particularly those regarding planning and decision-making, become concentrated within a particular location and/or group....
, 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
Bottom-up
Bottom-up may refer to:* In business development, a bottom-up approach means that the adviser takes the needs and wishes of the would-be entrepreneur as the starting point, rather than a market opportunity ....
). However, the author also notes that this is probably an over-generalization with tensions between centralization and decentralization
Decentralization
__FORCETOC__Decentralization or decentralisation is the process of dispersing decision-making governance closer to the people and/or citizens. It includes the dispersal of administration or governance in sectors or areas like engineering, management science, political science, political economy,...
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 ageingAgeing
Ageing or aging is the accumulation of changes in a person over time. Ageing in humans refers to a multidimensional process of physical, psychological, and social change. Some dimensions of ageing grow and expand over time, while others decline...
), 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 indicatorsEconomic indicator
An economic indicator is a statistic about the economy. Economic indicators allow analysis of economic performance and predictions of future performance. One application of economic indicators is the study of business cycles....
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
Comparability
In mathematics, any two elements x and y of a set P that is partially ordered by a binary relation ≤ are comparable when either x ≤ y or y ≤ x...
of national data has been doubted.
In the social protection field the Commission is preparing to streamline
Process optimization
Process optimization is the discipline of adjusting a process so as to optimize some specified set of parameters without violating some constraint. The most common goals are minimizing cost, maximizing throughput, and/or efficiency...
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.