Draft guidelines for the European Council conclusions - 18-19 October 2012
01 October 2012
The FT has published a draft report distributed to EU countries before this month's summit, which would require all 17 eurozone members to sign on to the kinds of Brussels-approved policy programmes and timelines currently only negotiated with bailout countries. (Includes updated draft, 8.10.12.)
In its conclusions [on completing EMU], the European Council could cover the following points:
Following the interim report presented by the President of the European Council in close collaboration with the other three presidents, look forward to the final report and precise roadmap to be presented at the December EC and resting on the essential building blocks on which a genuine EMU should be based:
1. Integrated financial framework
a) Single supervisory mechanism (SSM) and other legislative proposals
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call on the legislators to accelerate work on the legislative proposals on the SSM as a matter of priority by the end of the year in line with the June 2012 Euro Summit declaration;
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stress the need to ensure a clear separation between ECB monetary policy and supervision functions, the need to ensure fair treatment and representation of both euro and non-euro area Member States participating in the SSM as well as a level-playing field between those which take part in the SSM and those which do not and the integrity of the single market for financial services;
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state the need to ensure the appropriate accountability and transparency for the ECB supervisory function, notably vis-à-vis the European Parliament;
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state that an acceptable and balanced solution should be sought regarding the voting modalities and decisions under the EBA regulation that ensures non-discriminatory and effective decision-making within the single market;
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stress the need for EBA to retain its existing powers and responsibilities;
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call for the rapid adoption of the existing legislative proposals on bank recovery and resolution, national deposit guarantee schemes, which are crucial elements of the single rule book;
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also call for the rapid conclusion of work on the Capital Requirements Regulation and Directive 4. The provisions related to the harmonisation of national resolution and deposit guarantee frameworks, are particularly important. The provisions related to mandatory lending between national funds in the existing proposals should be considered separately;
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commit to move towards a fully-fledged integrated financial framework for the euro area. In particular, this would require the Commission to propose, after the existing Recovery and Resolution Directive and the Deposit Guarantee Scheme Directive have been adopted, a common resolution authority to be set up alongside the single supervisory mechanism;
b) Direct bank recapitalisation
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call on the Eurogroup to agree on the exact operational criteria that will guide direct bank recapitalisations by the ESM in full respect of the 29 June Euro Area summit Statement.
2. Integrated budgetary and economic policy frameworks and democratic legitimacy and accountability
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call on the legislators to adopt the "two-pack" by end-2012. This is a key piece of legislation necessary for the reinforcement of the new economic governance in the EU alongside the reinforced SGP, the Treaty on Stability, Coordination and Governance and the "six-pack". Call on national authorities and European Institutions to implement them fully;
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for the euro area, beyond the current steps to reinforce economic governance, evolving towards an integrated budgetary framework is necessary to ensure sound budgetary policies at the national and European levels that contribute to sustainable growth and ensure macro-economic stability. In that context, mechanisms to prevent unsustainable budgetary developments as well as mechanisms for fiscal solidarity e.g. via an appropriate fiscal capacity should be explored;
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the smooth functioning of EMU requires stronger coordination, convergence and enforcement in the areas of economic policy. In this context, the idea for the euro area Member States to enter into individual contractual arrangements with the European level on the reforms they commit to undertake and their implementation should be explored;
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in the context of a renewed EMU with a more binding economic policy framework, one should explore the possibility of supporting Member States’ reform efforts with limited, temporary, flexible and targeted financial incentives;
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governance within the euro area should be further improved building on the Euro Area Summit statement of 26 October 2011 and in line with the Treaty on Stability, Coordination and Governance;
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strong mechanisms for democratic legitimacy and accountability are necessary. One of the guiding principles in this context is to ensure that democratic control and accountability are effected at the level at which the decisions are taken.
© Financial Times
