The Commission has today unveiled two additional pieces of legislation aimed at strengthening the surveillance mechanisms and promoting further economic integration and convergence in the euro area. The two proposed Regulations build on what has already been agreed in the ‘Six Pack’ set of legislative measures which will enter into force in mid-December.
The first piece of proposed legislation will apply to all countries in the euro area, with special provisions made for those which are subject to an excessive deficits procedure (EDP).
The second sets out explicit rules for enhanced surveillance. It will be applicable in three cases:
The proposed Regulation strengthening surveillance of budgetary policies in euro area Member States would require euro area Member States to present their draft budgets at the same time each year and give the Commission the right to assess and, if necessary, issue an opinion on them. The Commission could request that these drafts be revised, should it consider them to be seriously non-compliant with the policy obligations laid down in the Stability and Growth Pact. All of this would be done publically to ensure full transparency. The Regulation also proposes closer monitoring and reporting requirements for euro area countries in Excessive Deficit Procedure, to apply on an ongoing basis throughout budgetary cycle. And euro area Member States would be required to have in place independent fiscal councils and to base their budgets on independent forecasts.
The proposed Regulation strengthening economic and fiscal surveillance of euro area countries facing or threatened with serious financial instability would ensure that the surveillance of euro area Member States under a financial assistance programme, or facing a serious threat of financial instability, is robust, follows clear procedures and is embedded in EU law. The Commission would be able to decide whether a Member State experiencing severe difficulties with regard to its financial stability should be subject to enhanced surveillance and the Council will be able to issue a recommendation to such Member States to request financial assistance.