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Five Presidents’ Report sets out plan for strengthening Europe’s Economic and Monetary Union
The five Presidents – European Commission President Jean-Claude Juncker, together with the President of the Euro Summit, Donald Tusk, the President of the Eurogroup, Jeroen Dijsselbloem, the President of the European Central Bank, Mario Draghi, and the President of the European Parliament, Martin Schulz – revealed ambitious plans on 22 June on how to deepen the Economic and Monetary Union (EMU) as of 1 July 2015 and how to complete it by 2025 at the latest. To turn their vision for the future of EMU into reality, they put forward concrete measures to be implemented during three stages. While some of the actions, such as introducing a European Deposit Insurance Scheme, can be frontloaded in the coming years, others such as creating a future euro area treasury go further as regards the sharing of sovereignty among euro area Member States and are more long-term in nature. This is part of the Five Presidents’ vision according to which the focus needs to move beyond rules to institutions in order to guarantee a rock-solid and transparent EMU architecture.
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Today we, five Presidents, are setting out our common vision. The world is watching us and they want to know where we are going. Today we lay out monetary integration and bring it to its ultimate destination.
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Jean-Claude Juncker, President of the European Commission
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European Fund for Strategic Investments (EFSI) established
The European Fund for Strategic Investment (EFSI), which is at the heart of the Commission’s EUR 315 billion Investment Plan for Europe, will soon be ready to support EU investment projects. Following publication in the Official Journal on 1 July, the EFSI will become fully operational in mid-September. As last steps towards establishing the Fund, on 24 June the European Parliament plenary voted in favour of approving the Regulation to establish the EFSI, with the Council adopting the Regulation on 25 June. Negotiations on the Regulation were successfully concluded in record time, as Commission Vice -President Katainen highlighted in his speech at the EP, just four and a half months after the Commission had adopted the legislative proposal on 13 January. In related news on 19 June, the European Investment Bank (EIB) – the Commission's strategic partner in implementing the Investment Plan – announced another project to receive pre-financing: supporting research and development in biotechnology in Spain for use in sectors such as water treatment and solar energy. The decision is in line with the European Council conclusions of December 2014, which invited the EIB Group to “start activities by using its own funds as of January 2015”.
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EU leaders endorse Country-Specific Recommendations to support a robust recovery and call for their implementation
At the European Council meeting on 25-26 June, EU leaders endorsed the country-specific Recommendations that the Commission announced on 13 May and called for their implementation. As a major outcome of the annual European Semester, the economic and social agenda reflected in the economic policy recommendations focuses on the three mutually reinforcing pillars of boosting investment, implementing structural reforms and pursuing fiscal responsibility. Implementing the recommendations will be key to making Europe’s return to jobs and growth sustainable. The European Council also welcomed the agreement reached on the European Fund for Strategic Investments (EFSI) and called for its rapid implementation. In addition, European leaders took note of the Five Presidents’ Report on strengthening the Economic and Monetary Union that was requested by the December 2014 European Council and they asked the Council to rapidly examine it. They also called for the rapid implementation of legislation and reforms to complete the Digital Single Market so that it can be used as a vehicle for inclusive growth in all regions of the EU.
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Greece's financial assistance programme ends without follow-up arrangement; Commission publishes latest proposals
On 30 June, the Master Financial Assistance Facility Agreement (MFFA) for Greece ended without a follow-up arrangement. The MFFA had been extended for four months on 27 February. As a result, the Greek financial assistance programme of the European Financial Stability Facility (EFSF) expired at midnight CET on 30 June. The last EFSF loan tranche of EUR 1.8 billion will therefore no longer be available for Greece and neither will the EUR 10.9 billion in EFSF notes to cover the potential cost of bank recapitalisation or bank resolution. In a statement issued on 27 June, 18 members of the Eurogroup expressed regret that the proposal by the institutions had been unilaterally rejected by the Greek authorities, and reiterated their commitment to do whatever is necessary to ensure the financial stability of the euro area. On 28 June, the European Commission published the latest proposals agreed among the three institutions (EC, ECB and IMF), while at a press conference on 29 June, Commission President Jean-Claude Juncker emphasised that the package – though demanding and comprehensive – was a fair one that included no cuts in the levels of wages or pensions, and would create more social equity and growth. A national referendum is to be held in Greece on 5 July.
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Staying ahead – Investing in Europe video explains need to invest more in the real economy
The 6th video in the series “European Economy Explained” was released on 24 June. “Staying ahead – Investing in Europe” explains that to shift economic growth into a higher gear and create more jobs, we need to invest more in the real economy. Investment remains 15% lower than it used to be and investors remain cautious. Using Formula One racing as a metaphor, the video shows how the EU is helping countries and businesses to work as a team to identify priorities and engineer solutions. It also discusses a core part of this strategy: the EU’s Investment Plan for Europe, which should mobilise EUR 315 billion for investment over the next three years. The Directorate-General for Economic and Financial Affairs (DG ECFIN) launched the series of videos to explore key economic policy topics. Using animations in a storytelling format, the videos make understanding complex economic policies easy and entertaining.
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June euro area annual inflation down to 0.2% from 0.3% in May
Euro area annual inflation is expected to be 0.2% in June 2015, down from 0.3% in May 2015, according to a flash estimate from Eurostat, the statistical office of the EU. Looking at the main components of euro area inflation, food, alcohol & tobacco is expected to have the highest annual rate in June (1.2%, stable compared with May), followed by services (1.0%, compared with 1.3% in May), non-energy industrial goods (0.4%, compared with 0.2% in May) and energy (- 5.1%, compared with -4.8% in May).
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Directorate-General for Economic and Financial Affairs
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