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The financial and economic crisis - a chronological overview - May 2009

The current crisis calls for concerted action at both the European and the international level. The EU has taken a series of bold measures to restore confidence, stability and sustainability  in the financial markets.

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28 May 2009
Commission proposes stronger financial supervision in Europe

The Commission Communication "European financial supervision" COM(2009) 252 final proposes a set of ambitious reforms to the current architecture of financial services committees. Key elements are the creation of a new European Systemic Risk Council (ESRC) and a European System of Financial Supervisors (ESFS), composed of new European Supervisory Authorities.  

European Systemic Risk Council (ESRC) should monitor and assess risks to the stability of the financial system as a whole ("macro-prudential supervision"), provide early warning of systemic risks that may be building up and, where necessary, provide recommendations for action to deal with these risks.

The creation of the ESRC would address one of the fundamental weaknesses highlighted by this crisis, the exposure of the financial system to interconnected, complex, sectoral and cross-sectoral systemic risks.

European System of Financial Supervisors (ESFS) would be the supervision of individual financial institutions ("micro-prudential supervision"), consisting of a robust network of national financial supervisors working in tandem with new European Supervisory Authorities, created by the transformation of existing Committees for the banking securities and insurance and occupational pensions sectors.
The ESFS is to be built on shared and mutually-reinforcing responsibilities, combining nationally-based supervision of firms with specific tasks at the European level.
The ESFS aims to foster harmonised rules and coherent supervisory practice and enforcement. This network should be based on the principles of partnership, flexibility and subsidiarity and should aim to enhance trust between national supervisors by ensuring, inter alia, that host supervisors have an appropriate say in setting financial stability and investor protection policies so that cross-border risks can be addressed more effectively.

Legislation to embody these proposals will follow in the autumn. The Commission invites all interested parties to submit their reactions on the Communication before 15 July.

>> The EU single market. Financial services supervision and Committee architecture

14/15 May 2009
Brussels Economic Forum 2009 -
Beyond the crisis: a changing economic landscape
>> Speech by Mr Almunia, Commissioner for Economic and Monetary Affairs. Beyond the Crisis: a Changing Economic Landscape
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13 May 2009
Commission reports under the excessive deficit procedure (EDP) for Lithuania, Malta, Poland and Romania

In view of reported budget deficits of more than 3% in 2008, the European Commission adopted reports for Lithuania, Malta, Poland and Romania in accordance with Article 104.3 of the Treaty concluding that the deficit critrion is not fulfilled.
The reports are addressed to the Economic and Financial Committee, which formulates an opinion on the reports of the Commission. Taking into account the opinion of the Committee, the Commission will decide whether to recommend to the Council the existence of an excessive deficit and a deadline for its correction.
>> Commission presents reports under the excessive deficit procedure for four countries

7 May 2009
Employment summit in Prague

EU leaders and social partners discussed the consequences of the crisis on employment.
They identified practical ways to keep people in jobs and to get those who have lost their jobs back into work as quickly as possible. Coordinated action at European level, including the European Social Fund and the European Globalisation Fund, were discussed to best complement actions at national level.

The summit identified ten actions to be implemented together with the social partners. They address both short-term and long-term challenges to fight unemployment and create new jobs. The Commission will build on the summit's discussions when formulating its input to the European Council of 18-19 June.

>> Employment, Social Affairs and Equal Opportunities. EU Employment Summit agrees on ways to tackle rising unemployment

European Central Bank (ECB) further interest rates cuts

The ECB announced to lower the interest rate on the main refinancing operations of the Eurosystem by 25 basis points to 1.00%, starting from the operation to be settled on 13 May 2009.
>> ECB. Monetary policy decisions

5 May 2009
Meetings of finance ministers - Eurogroup and ECOFIN

The Council approved an increase to € 50 billion of the lending ceiling for the EU support facility for non-euro area Member States in financial difficulty. Among other points, Ministers also discussed the quality of public finances in relation to age-related expenditures projections and the economic situation and financial market developments on the basis of the spring forecasts.
>> Eurogroup and ECOFIN ministers meetings

4 May 2009
Spring economic forecasts

In the Commission's spring forecast, GDP in the European Union is projected to fall by 4% this year and to broadly stabilise in 2010. The main factors behind the recession are the worsening of the global financial crisis, a sharp contraction in world trade and ongoing housing market corrections in some economies. However, with the impact of fiscal and monetary stimulus measures kicking in, growth is expected to regain some momentum in the course of 2010.
>> Spring forecasts 2009-2010. A tough 2009, but EU economy set to stabilise as support measures take effect


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