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1. In the light of the Commission's report on growth-enhancing areas and further to the outcome of the political conference on the sources of growth held on 6 October 2011, the European Council identified a limited number of key priorities for internal economic policy that need to be pursued in the short term in order to achieve smart, sustainable and inclusive and green growth:
2. Energy, including energy efficiency, as well as research and innovation, are key areas for the promotion of growth. The European Council will track progress made in those areas in December 2011 and in March 2012 respectively, further to the concrete orientations set in February 2011. It calls for the swift implementation of those measures which will have a direct impact on growth.
3. Since the crisis has increased pressure on national budgets, it is important to optimise the use of available resources, in particular in countries implementing an adjustment programme. The European Council calls for the adoption before the end of the year of the proposals to increase temporarily cofinancing rates for EU funds, accompanied by a targeting of those funds on growth, competitiveness and employment. The EIB is invited to examine in close cooperation with the Commission the possibilities of further contributing to boosting investment in Europe, including for countries implementing an adjustment programme.
4. The European Union now has more powerful tools to enhance its economic governance and to ensure that the required measures are taken to pull Europe out of the crisis: the Europe 2020 strategy continues to guide the Union and the Member States in promoting the delivery of growth-enhancing structural reforms; the European semester will help ensure that they remain on track in implementing these reforms in a coordinated manner; and the Euro Plus Pact will achieve a new quality of economic policy coordination amongst the participating Member States. The package of six legislative acts on economic governance agreed last month will allow a much higher degree of surveillance and coordination, necessary to ensure sustainable public finances and avoid the accumulation of excessive imbalances. The European Council emphasises its determination to implement this new framework in order to ensure that it is fully and effectively applied. In this context, it welcomes the intention of the Commission to strengthen, in the Commission, the role of the competent Commissioner for closer monitoring and additional enforcement.
5. The next European semester should be as ambitious as possible and draw fully on the lessons of the past. The European Council welcomes the Commission's intention to bring forward its Annual Growth Survey to December 2011, which will allow the Council to prepare thoroughly the Spring 2012 European Council. Heads of State or Government will return to some themes of the Euro Plus Pact in December 2011; they will also be informed of progress made in structured discussions on tax policy coordination issues. Legislative work on the Commission proposals for a common consolidated corporate tax base is ongoing. The European Council takes note of the Commission proposal for a financial transaction tax.
6. Strengthening financial regulation remains a key priority at the EU and the global level. Much has been achieved since 2008 with the reform of regulatory and supervisory framework, but efforts need to be maintained to address the weaknesses of the financial system and prevent future crises. The European Council welcomes the agreement reached on short selling and calls for the speedy adoption of other important legislative proposals such as those relating to OTC derivatives and deposit guarantee schemes by the end of this year, and the ones on capital requirements by summer 2012. It welcomes the proposals on markets in financial instruments and market abuse, and looks forward to the proposals the Commission will make on credit rating agencies and bank crisis management and resolution.
The European Council welcomes progress made by the Council (ECOFIN) on measures for the banking sector and invites the Council to finalise this work at its meeting of 26 October. These measures will be an essential component of a broader package whose other elements will be agreed by the Euro Summit of 26 October.
7. The President informed the European Council on the state of preparations regarding the Euro Summit of 23 and 26 October. The European Council agreed on the need for coherence of the activities of the euro area and the European Union, in full respect of the integrity of the European Union as a whole and its operation at 27. In this context, the European Commission has the responsibility to ensure compliance by all 27 Member States with EU legislation, including that relating to the internal market, and to safeguard a level playing field among all Member States including those not participating in the euro. The President of the Euro Summit will be designated by the Heads of State or Government of the euro area at the same time the European Council elects its President and for the same term of office. Pending the next such election, the current President of the European Council will chair the Euro Summit meetings. The President of the Euro Summit will keep the non euro area Member States closely informed of the preparation and outcome of the Summits. The European Council notes the intention of the Heads of State or Government of the euro area to reflect on further strengthening of economic convergence within the euro area, on improving fiscal discipline and deepening economic union, including exploring the possibility of limited Treaty changes.
The European Council recalls that any Treaty change must be decided by the 27 Member States. The European Council will revert to the issue in December on the basis of a report by the President of the European Council in close collaboration with the President of the Commission and the President of the Eurogroup.