The economic crisis has prompted intense and sustained action by the EU's national governments, the European Central Bank and the Commission. All have been working closely together to support growth and employment, ensure financial stability, and put in place a better governance system for the future.
The EU Heads of state and government took important decisions to strengthen EU economic governance. They endorsed the report of the Task Force on economic governance, which calls for increased fiscal discipline, broader economic surveillance, deeper coordination, and for setting up a robust framework for crisis management and stronger institutions. The objective is to ensure the effective implementation of the new surveillance arrangements as soon as possible and to encourage the Council and the European Parliament to reach agreement by summer 2011 on the Commission's legislative proposals. The result will be a substantial strengthening of the economic pillar of EMU, enhancing confidence and thus contributing to sustainable growth, employment and competitiveness.
Heads of state and government also agreed on the need for Member States to establish a permanent crisis mechanism to safeguard the financial stability of the euro area as a whole and invited the President of the European Council to undertake consultations with the members of the European Council on a limited treaty change required to that effect.
>> EU Council. Strong measures for more efficient economic governance
The five areas of recommendations of the Task Force largely correspond to the package of legislative proposals adopted by the Commission on 29 September. They recommend to reinforce the SGP by ensuring that enforcement measures apply earlier and include stronger sanctions. Public institutions should be established at the national level in order to provide independent analysis and forecasts on domestic fiscal policy matters.
Moreover, decision making should be streamlined through the application of reverse qualified majority voting. A mechanism for macro-economic surveillance will also be put in place to detect the risk of asset bubbles, unsustainable patterns in the balance of payments, or strong divergences in competitiveness. The Task Force also recommends better integrated policy coordination, notably through the "European Semester" which will apply as of 2011, and advocates the establishment of a permanent crisis resolution framework for the euro area.
The European Council is expected to endorse the Task Force's report this week.
The Commission legislative package contains the most comprehensive reinforcement of economic governance in the EU and the euro area since the launch of the Economic and Monetary Union. Broader and enhanced surveillance of fiscal policies, but also macroeconomic policies and structural reforms is sought in the light of the shortcomings of the existing legislation. New enforcement mechanisms are foreseen for non-compliant Member States. The recently agreed "European semester" will integrate all revised and new surveillance processes into a comprehensive and effective economic policy framework.
>> Council Presidency. PCE230/10. Remarks by Herman Van Rompuy, President of the European Council,following the last meeting of the Task force on economic governance
The main points on the agenda were:
>> Economic and Financial Affairs. Main results of the Informal ECOFIN