Annexes to COM(2015)600 - Steps towards Completing Economic and Monetary Union - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2015)600 - Steps towards Completing Economic and Monetary Union. |
|---|---|
| document | COM(2015)600  |
| date | October 21, 2015 |
Second, the Commission encourages Member States to find a swift agreement on an effective bridge financing mechanism, to ensure that, while the Single Resolution Fund is gradually being built up through levies raised from the banking sector, the Single Resolution Mechanism has sufficient resources at its disposal to finance possible residual resolution costs for troubled banks, in accordance with the Bank Recovery and Resolution Directive. In the same vein, Member States should agree swiftly on a common backstop for the Single Resolution Fund which should be fiscally neutral over the medium term.
Third, the Commission will make a legislative proposal before the end of the year on the first steps towards a common European Deposit Insurance Scheme with a view to creating a more European system, disconnected from the sovereign, so that financial stability is enhanced and citizens can be certain that the safety of their deposits does not depend on their geographical location.
The first step towards a more common system will build on a "re-insurance" approach. A joint reinsurance fund – supplemental to existing national Deposit Guarantee Schemes – would contribute under certain conditions when national Deposit Guarantee Schemes are called upon. These conditions should be designed to limit the liability for the fund and reduce moral hazard at the national level, and should reflect the fact that national funds are gradually being built up and different starting points successively being aligned. The European Deposit Insurance Scheme would be mandatory for euro area Member States and open to non-euro area Member States willing to join the Banking Union.
Fourth, in parallel with its proposal on the European Deposit Insurance Scheme, the Commission is committed to further reduce risks and ensure a level playing field in the banking sector and limit the bank-sovereign loop. To this end, it will set out how work can be brought forward in those outstanding areas where the regulatory and prudential framework may need to be reviewed and completed to achieve these objectives.
Finally, alongside the completion of the Banking Union, the Capital Markets Union is a key priority. On 30 September, the Commission published the Capital Markets Union Action Plan, inter alia aiming to ensuring more diversified sources of finance for companies and strengthened cross-border risk-sharing through deepening integration of bond and equity markets.
6. EFFECTIVE DEMOCRATIC LEGITIMACY, OWNERSHIP AND ACCOUNTABILITY
Effective democratic legitimacy and accountability are crucial for strengthening the ownership in Stage 1 of the deepening of EMU and is indispensable in Stage 2, when the envisaged initiatives involve more pooling of sovereignty. In recent years, the Commission has gradually established a deeper and more permanent dialogue with the Member States through bilateral meetings, more targeted discussion in the Council and more widespread technical and political missions to the capitals. The Commission will continue to intensify these dialogues, also by making use of its network of European Semester Officers in the Member States.
First practical steps have been initiated by the European Parliament to strengthen parliamentary oversight as part of the European Semester. ‘Economic dialogues’ between the European Parliament and the Council, the Commission and the Eurogroup have taken place in line with the provisions of the ‘Six-Pack’ and ‘Two- Pack’ legislation. This has already been part of the last European Semester rounds. These dialogues may be enhanced by agreeing on dedicated time-slots during the main steps of the Semester cycle. A new form of inter-parliamentary cooperation was established to bring together European and national actors. This takes place within the European Parliamentary Week organised by the European Parliament in cooperation with national Parliaments, which includes representatives from national Parliaments for in-depth discussions on policy priorities. The ‘Two-Pack’ also enshrined the right for a national Parliament to convene a Commissioner for a presentation of the Commission’s opinion on a draft budgetary plan or of its recommendation to a Member State in Excessive Deficit Procedure.
The timing and added value of these parliamentary moments could be further strengthened, in line with the renewed European Semester. In particular, the Commission could engage with the European Parliament at a plenary debate before the Annual Growth Survey is presented, and continue the debate following its adoption. Moreover, a second dedicated plenary debate could be held upon presentation by the Commission of the Country-Specific Recommendations, in accordance with the relevant provisions of the ‘Six-Pack’ on economic dialogue. At the same time, Commission and Council representatives could participate in inter-parliamentary meetings in particular in the context of the European Parliamentary Week. This new practice could be progressively agreed upon in more detail between the EU institutions in full respect of their respective institutional role.
The Commission will also work out model arrangements to make the interaction with national Parliaments more efficient. Such interaction should apply to national parliamentary debates both on the Country-Specific Recommendations addressed to the Member State and within the annual national budgetary procedure. That would give more life to the right recognised in the ‘Two-Pack’ to convene a Commissioner. As a rule, national Parliaments should be closely involved in the adoption of National Reform and Stability Programmes.
7. COMPLETING EMU: PREPARING FOR STAGE 2
The steps presented in this Communication for Stage 1 of completing EMU, build on existing instruments and make the best possible use of the existing Treaties. However, all these initiatives of Stage 1 should not be seen in isolation, but rather as stepping stones towards the next stage, starting as of 2017. In Stage 2, more far-reaching measures should be agreed upon to complete the EMU's economic and institutional architecture. This will involve sharing more sovereignty and solidarity and will have to be accompanied by strengthened democratic oversight.
To prepare the transition from Stage 1 to Stage 2 of completing the EMU, the Commission will present a White Paper in spring 2017, building on the progress made in Stage 1 and outlining the next steps needed to complete the EMU in Stage 2. The White Paper will be prepared in consultation with the Presidents of the other EU institutions.
2016 will be crucial in preparing this White Paper, building on the three following strands:
- First, all EU institutions and Member States should agree and take action on the measures presented in this Communication. In particular, it would be important that the Competitiveness Boards and the European Fiscal Board become operational by mid-2016.
- Second, it is key to consult and engage with citizens, stakeholders, social partners, European and national Parliaments, Member States, regional and local authorities on completing EMU in Stage 2. With a view to stimulate this necessary broad-based debate across Europe, the Commission will facilitate a wide consultation, including public debates in 2016. The consultation should be broad-based, transparent and inclusive and allow citizens to give their views.
- Finally, the Commission will establish in mid-2016 an Expert Group to explore the legal, economic and political preconditions that will inform the more long-term proposals as outlined in the Five Presidents' Report.
The implementation of Stage 1, the outcome of the consultation and the work of the expert group should contribute to shaping a consensus for more fundamental steps ahead. This input will feed into the White Paper, which should eventually – following further discussion –be translated into a stronger legislative and institutional framework for the EMU.
8. CONCLUSION
This Communication substantiates the different steps under Stage 1 that the Five Presidents had outlined in their report on "Completing Europe's Economic and Monetary Union". These steps are ambitious and pragmatic. Following the principle of "deepening by doing", the proposed measures build on existing instruments and make the best possible use of the existing Treaties.
The presented initiatives will help to boost competitiveness and economic and social convergence, with the aim of further improving the Economic Union. The Fiscal Union is fostered via achieving and maintaining responsible fiscal policies at national and EU level. The initiatives will also help to further increase the efficiency and stability of financial markets and to complete the Financial Union. Finally, the Political Union is supported by enhancing democratic accountability and national ownership.
All of these elements are important in themselves, but they are also interdependent. They thus need to be tackled in parallel. As a whole, the Stage 1 initiatives will further bolster the resilience of the EMU. They are also an important step in stimulating the convergence necessary to move on to Stage 2 of the process of completing a deep and genuine EMU.
The Commission calls on all the actors involved to ensure that the process to deepen EMU is swiftly implemented. Only continued ambition and concerted action can ensure that the EMU not only survives but thrives, and regains its path towards strong, sustainable and inclusive growth and job creation.
TABLE 1: TIMELINE OF THE EUROPEAN SEMESTER 2016
(1)
Completing Europe's Economic and Monetary Union, Report by Jean-Claude Juncker, in close cooperation with Donald Tusk, Jeroen Dijsselbloem, Mario Draghi and Martin Schulz, 22 June 2015.
(2)
See Annex 1 of the Report.
(3)
http://europa.eu/rapid/press-release_IP-15-5294_en.htm .
(4)
4 See document at: http://ec.europa.eu/economy_finance/assistance_eu_ms/greek_loan_facility/pdf/
assessment_social_impact_en.pdf .
(5)
Examples of such meaningful indicators include the market entry and exit of firms, unemployment rates (e.g. youth and long-term unemployment) and educational attainment. These have been shown to be related to economic growth, productivity, innovation, employment and fairness. At the same time, they point to concrete policy levers that should be considered to improve performance. These include, for the mentioned examples, actions that impact on the ease of doing business, measures impacting on labour demand and supply such as the activation component of unemployment benefits and the labour tax wedge, and improving access to education.
(6)
Article 23 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006.
(7)
In the first strand, the Commission may request amendments to Member States' Partnership Agreements and programme governing the use of EU Funds in order to support the implementation of Council recommendations or to maximise the impact of European Structural and Investment Funds in the Member States receiving financial assistance from the EU. If a Member State fails to undertake such amendments, the Commission may propose to the Council to suspend the payments of the programmes concerned. In the second strand, the Commission must propose to suspend the commitments or payments when a Member State fails to take corrective action under the economic governance procedures, e.g. the Excessive Deficit Procedure and/or the Excessive Imbalances Procedure or a stability support programme.
(8)
Six-Pack: Regulations (EU) n° 1173/2011; 1174/2011; 1175/2011; 1176/2011; 1177/2011; Directive 2011/85/EU; Two-Pack: Regulations (EU) n° 472/2013; 473/2013; TSCG: http://www.consilium.europa.eu/en/european-council/pdf/Treaty-on-Stability-Coordination-and-Governance-TSCG/ . The fiscal part of the TSCG is also referred to as "Fiscal Compact".
(9)
Economic governance review, Report on the application of Regulations (EU) n° 1173/2011; 1174/2011; 1175/2011; 1176/2011; 1177/2011; 472/2013; 473/2013; COM(2014) 905, 28.11.2014.
(10)
http://ec.europa.eu/economy_finance/publications/occasional_paper/2013/pdf/ocp151_en.pdf .
(11)
See section 3.3.
(12)
See COM(2015)602 of 21 October 2015.
(13)
See COM(2015)603 of 21 October 2015.
(14)
On 19th October 2015, the Bank Recovery and Resolution Directive had not yet, or only partially been transposed by 12 Member States: Czech Republic, Luxembourg, Poland, Romania, Sweden, Italy, Lithuania, Belgium, Cyprus, the Netherlands, Spain, and Slovenia.
(15)
On 19th October 2015, the Deposit Guarantee Directive had not yet, or only partially been transposed by 18 Member States: Czech Republic, Spain, France, Slovakia, Belgium, Estonia, Ireland, Greece, Italy, Cyprus, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Romania, Slovenia, and Sweden.
(16)
On 19th October 2015, the Intergovernmental Agreement had not yet been ratified or the instruments of ratification had not yet been deposited by 13 Member States: Austria, Belgium, Estonia, Germany, Greece, Ireland, Italy, Lithuania, Luxembourg, Malta, The Netherlands, Portugal, and Slovenia.