The piecemeal approach orchestrated by Jean-Claude Juncker and Mario Draghi to address the root causes of the euro zone debt crisis and complete the Economic and Monetary Union has not yielded any positive results so far.
Major differences among EU member states provoked the postponement of a discussion on deepening the EMU at last night's (15 October) EU summit.
EU leaders even decided to scrap a succinct reference to the completion of the Banking Union, which was initially included in the summit conclusions.
Diverging views between Germany and France, combined with Berlin's hesitation to complete the Banking Union have killed attempts progress on what was initially billed a key priority for this political term.
Jean-Claude Juncker and Mario Draghi - the Presidents of the European Commission and the European Central Bank (ECB) - led the so-called Fve Presidents’ report, which was also co-signed by the presidents of the Eurogroup, Parliament and Council.
The report offered a detailed roadmap “to ensure the smooth functioning of the EMU”, as requested by the heads of state and government in October last year. The ultimate goal, the document said, was “to create a better and fairer life for all citizens, to prepare the Union for future global challenges and to enable each of its members to prosper.”
However, the Greek saga has left little appetite among European capitals to reopen the discussion and mutualise risks.
Against this backdrop, Juncker and Draghi opted for watering down the ambition of the report, presented last June. They excluded all the bold initiatives except one: a European Deposit Guarantee Scheme aimed at protecting savers against bank failures.
Their strategy was to focus on completing the Banking Union first and delay other initiatives like a European unemployment insurance scheme in order to maximise their chances of success, EU sources close to the process told EurActiv.
Once an agreement on the deposit guarantee scheme is reached, the Commission intended to lay out detailed proposals on fiscal union in a white paper scheduled for publication in Spring 2017, the strategy went.
However, Berlin is opposed to a common guarantee for all European depositors unless a series of conditions are met, postponing any result for the time being.
“This is not progressing well,” confessed an EU official on condition of anonymity.
This lack of progress represents a serious blow to Juncker's attempt for closer economic union in the euro zone, arguably the priority closest to his heart.
The EU executive is expected to present a first package of proposals to start implementing the Five Presidents' report during the second half of October, although the date remains to be confirmed.
As part of this first package, the Commission will present a document outlining the building blocks to build up the European Deposit Guarantee Scheme, while its legislative proposal will come by December.
In parallel, the Commission is setting up a group to start preparing the white paper for 2017.
Full article in EurActiv
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