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© EU economic governance: European Parliament approves Commission comprehensive package of proposals for legislative measures
- State of the Union: Barroso sets out crisis-response vision
- Commission issues proposal for EU financial transaction tax
- Troika mission in Greece to finalise review
- EU bond lends further support to Ireland and Portugal
- Rehn in Washington: “More reform is yet to come”
- G20 eyes action plan to address challenges facing global economy
- Technical-assistance Task Force for Greece up and running
Top News
© EU economic governance: European Parliament approves Commission comprehensive package of proposals for legislative measures

The European Parliament, sitting in Strasbourg on 28 September, approved
the Commission's proposals for six pieces of legislation setting out robust new rules for
the future economic governance of the EU and the euro area. This "six-pack" was tabled by the Commission exactly one year ago as part of its comprehensive response to the financial and economic crisis. It has been the subject of sometimes tough negotiations between
the Council of Ministers and the European Parliament. But the outcome of these talks is legislation that will significantly strengthen the Stability and Growth Pact, put in place a system to prevent and correct macroeconomic imbalances, and in this way help to prevent future economic crises.
EU Finance Ministers are due to approve
the package at their meeting on 4 October, thus sealing the deal. This will allow the new procedure to be applied in time for the next European Semester beginning in January 2012.

For the euro area to be credible – and this is not only the message of the federalists, this is the message of the markets – we need a truly Community approach.

President of the European Commission José Manuel Barroso
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José Manuel Barroso © European Union, 2011
State of the Union: Barroso sets out crisis-response vision

The European Commission will build on the ‘six-pack’ EU economic governance legislation by presenting a proposal in the coming weeks for a single, coherent framework to deepen economic coordination and integration, particularly in the euro area. Commission President Barroso signalled the move in his annual State of the Union address, on 28 September at
the European Parliament in Strasbourg. President Barroso also referred to the Commission proposal of the same day for an EU financial transaction tax, which may generate a revenue of above € 55 billion per year. Among a wide range of other initiatives, the Commission would also be presenting options for Eurobonds – "Stability Bonds" – Barroso said. Among other highlights of the speech, the Commission President suggested that it might be necessary to consider further changes to the EU Treaty, to enable groups of Member States to forge ahead in decision-making should they want to go further than others. Barroso described the current crisis as the greatest challenge the EU had ever faced.

Algirdas Šemeta, on the left © European Union, 2011
Commission issues proposal for EU financial transaction tax

A financial transaction tax should be introduced in the European Union from 1 January 2014, the European Commission proposed on 28 September. The tax would be levied on all transactions on financial instruments between financial institutions when at least one party to the transaction is located in the EU – a move that could raise some €57 billion every year. The proposal aims to ensure that the financial sector makes a fair contribution at a time of fiscal consolidation in the EU Member States, while establishing a coordinated framework at EU level. It will now be discussed by Member States in the EU's Council of Ministers, and the Commission will present it to the G20 Summit in November.

Building of Parliament in Athens ©
Troika mission in Greece to finalise review

The Commission, ECB and IMF staff teams returned to Athens on 28 September to finalise the fifth review of the Greek economic adjustment programme. The report of compliance is expected to be published by mid-October. A positive assessment of compliance with the programme by the Eurogroup would allow the sixth disbursement under the Greek Loan Facility Arrangement to take place in October.

Corporate Seal ©
EU bond lends further support to Ireland and Portugal

Ireland and Portugal have each received today a further €2 billion in financial-assistance loans following the successful issuance on 22 September by the EU of a €4-billion, 15-year bond. Investors moved quickly to snap up the benchmark bond as books including about
100 accounts were closed within two hours. The bond, issued under the European Financial Stabilisation Mechanism, is the first EU bond with a maturity of longer than 10 years, which is expected to enhance debt sustainability and the liquidity outlook for the two beneficiary countries. The benchmark matures on 4 September 2026 and pays a coupon of 3.00%. Another bond on €1.1 billion has been issued today, also to be used for loans to Ireland and Portugal. One further EU bond is set to be launched later in the year.

Press Briefing: Development Committee Chair, World Bank President Robert Zoellick, and IMF Managing Director Christine Lagarde © vSimone D. McCourtie / World Bank
Rehn in Washington: “More reform is yet to come”

Europe is facing a crucial moment in which it needs to take a quantum leap forward in its economic policy integration, according to European Commissioner for Economic & Monetary Affairs Olli Rehn. The Commissioner was speaking in Washington D.C., where he was attending the World Bank Group/International Monetary Fund (IMF) annual meetings, which were shaped by discussions about how to resolve the euro-area and global economic/financial crisis. Rehn said that the euro-area Member States must go further in pooling economic sovereignty to prevent policies that harm other Member States
and financial stability. While the EU economic governance legislative package was a very important reform in its own right, it was also a necessary foundation for further reforming economic governance, Rehn argued. The IMF communiqué of 24 September promised collective action to restore confidence and financial stability, and rekindle global growth, while euro-area countries would “do whatever is necessary to resolve the euro-area sovereign debt crisis and ensure the financial stability of the euro area as a whole and its Member States”.

PG20 and EU Flag ©
G20 eyes action plan to address challenges facing global economy

G20 Finance Deputies, Finance Ministers and Central Bank Governors met on 22 September in Washington D.C. in the context of the IMF/World Bank annual meetings. They mainly discussed the renewed challenges facing the global economy, including in particular the heightened downside risks from sovereign stress, financial system fragility, market turbulence, weak economic growth and high unemployment. In their debate, the European sovereign debt crisis was very much at the centre of attention. G20 Ministers committed to bold policy action to reinvigorate economic recovery, restore confidence and rebalance growth at the global level. Ministers agreed to come up with a comprehensive action plan setting out country-specific policy commitments by the October ministerial meeting.
The plan would then be finalised at the G20 leaders' summit in Cannes on 3-4 November.

Press conference by Horst REICHENBACH, Head of the Task Force of the EC in charge of providing technical assistance to Greece © European Union, 2011
Technical-assistance Task Force for Greece up and running

Helping Greece cope with its budgetary challenges and getting the country back on a path towards growth, job-creation and competitiveness will be the overarching priorities for the European Commission’s new Task Force in charge of providing technical assistance to Greece. This was the message from Task Force chief Horst Reichenbach, summarising on
15 September in Athens his first round of meetings with the Greek authorities. Reporting to Commission President Barroso, the Task Force is placed under the overall political guidance of Economic & Monetary Affairs Commissioner Olli Rehn and is based in Brussels, with a support team in Athens. Meanwhile, Regional Policy Commissioner Johannes Hahn put forward an action plan for improved EU structural-fund investments in Greece, also aiming to help foster economic growth and boost competitiveness.
International reserves in the EU Member States from Central and Eastern Europe (CEE8) – lessons from the financial crisis © European Union, 2011

International reserves in the EU Member States from Central and Eastern Europe (CEE8) – lessons from the financial crisis

This Country Focus shows that some simple reserve adequacy measures (particularly based on external debt indices) – although suffering from a number of drawbacks – seem to be sound indicators of the largest vulnerabilities within the CEE8 region. Nevertheless,
the analysis of balance-of-payments flows also reveals that some other types of financial flows, normally not captured by the traditional simple measures (such as financial derivative flows), may also significantly affect the overall balance of payments – particularly at moments of heightened financial market tensions.

Upcoming: The 2012 Ageing Report: Underlying assumptions and projection methodologies
Upcoming: Long-term macroeconomic projections for the EU Member States
Upcoming: Tax reforms in EU Member States
Agenda Calls
3-4 October
Eurogroup/ECOFIN meetings
6-7 October
European SME week summit
14-15 October
Washington D.C.
G20 Finance ministers' deputies meeting
17-18 October
European Council
24-27 October
European Parliament Plenary
3-4 November
G20 Summit
7-8 November
Eurogroup/ECOFIN meetings
10 November
European economic forecast, autumn 2011
14-17 November
European Parliament Plenary
21 November
DG ECFIN Annual Research Conference 2011 - New growth models for Europe
21 November
Eurogroup/ECOFIN meetings
29-30 November
European Council
9 December
European Parliament Plenary
Call for papers: "EU balance-of-payments assistance for Latvia: Foundations of Success" (working title). Deadline: 30 September 2011
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Directorate-General for Economic and Financial Affairs