European round-up
January 2010 | Issue 16
Council launches excessive deficit procedures against 9 EU countries
EU finance ministers meeting in the ECOFIN Council on 2 December opened excessive deficit procedures for Austria, Belgium, the Czech Republic, Germany, Italy, Slovakia, Slovenia, the Netherlands and Portugal, on the basis of a Commission recommendation. They set the deadline for correction of the excessive deficits at 2013, except for Belgium and Italy, where the existence of high debt ratios called for an earlier deadline of 2012. They also extended by one year the existing deadlines for Spain, France, Ireland and the UK. All 13 countries, along with Greece, whose response was deemed insufficient, have deficits above the 3%-of-GDP threshold specified in the Stability and Growth Pact. In all, 18 EU Member States had excessive deficit procedures opened against them in 2009, bringing the total to 20.
January 2010 | Issue 16
EU Finance Ministers reach “groundbreaking” agreement on new financial supervisory framework
At the same meeting, the ECOFIN Council agreed on the creation of three European authorities for the supervision of banking, insurances and pensions, which together with the new European Systemic Risk Board, complete the new supervisory framework to be put in place over the course of 2010. Finance Ministers also agreed on a common approach to exit strategies from financial market support measures, which should encourage banks to return to a competitive market through the gradual withdrawal of government guarantees.
January 2010 | Issue 16
Trichet calls for “timely and gradual” phasing out of crisis measures
In his quarterly monetary dialogue with the European Parliament, held on 7 December, ECB President Jean-Claude Trichet said that he expected the euro-area economy to grow “at a moderate pace” in 2010 but warned that any growth would be “surrounded by a high level of uncertainty”. Mr Trichet added that exit strategies need to be “timely and gradual”, and closely coordinated among national governments. Mr Trichet also took a somewhat positive view on the 2 December Council deal on the financial supervisory package. While it might not be “the best option” he felt that “the Swedish presidency had done a good job” given the complexity of the issue. The main Parliament groupings had condemned the deal.
January 2010 | Issue 16
Brussels readies plans for “EU 2020” strategy
On 24 November, the Commission issued a consultation document on EU 2020, a new strategy to give the EU economy a brighter future. EU 2020 aims to deliver greener and socially inclusive growth, and to solidify recovery from the crisis while preventing a similar one from occurring again. The new strategy, endorsed by EU leaders at the European Council in December, will build on the achievements of the Lisbon Strategy, which expires next year. Following the consultation, the new Commission will make a detailed proposal to the Spring European Council to be held in March.
January 2009 | Issue 16
New financial instrument ELENA launched by Commission and EIB
The European Local Energy Assistance (ELENA) facility, launched on 15 December, will help local authorities invest in energy efficiency, renewables and sustainable urban transport. A budget of €15 million will be made available over the first year from the Intelligent Energy Europe II programme to leverage a minimum investment by municipalities of at least EUR 375 million. Technical assistance in assessing the projects will be provided by European Investment Bank (EIB) specialists. The new instrument was jointly launched by the Commission and the EIB yesterday, and will contribute to the EU’s objectives in terms of emissions reduction.
