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President Barroso proposes banking union

At the June 2012 European Council, Heads of States and Governments and the European Commission will discuss EU’s strategy for growth, combining both immediate measures to kick-start the economy and a long-term vision for a stronger European Union.

In a speech held before the European Parliament, EC President José Manuel Barroso summarises the main elements of EU’s response to the crisis and for future growth.

Read more: The building blocks for deeper integration

Growth

Message of the European Commission ahead of the June European Council is clear: growth can only come from the combination of sound public finances, deep structural reforms and targeted investment.

European Council should agree a growth initiative, featuring three elements:

  1. Reprogramming structural funds, focusing them on growth and competitiveness.
  2. Boosting investment at European level through increasing the lending capacity of the EIB and Project bonds initiative
  3. Realising the full potential of the Single Market

Stronger economic governance

Second Country Specific Recommendations adopted on 30 May are an example of European Semester policy in practice.

It is a health check of the budgetary and economic situation in each of 27 Member States. As well as proposed treatment for identified risk factors and imbalances.

The Commission calls on European Council for a clear endorsement of the Country Specific Recommendations, without falling for the temptation to water them down.

EU budget

If all agree that for growth, targeted public investment is necessary to complement structural reforms, then this needs to be reflected in European Union budget.

Quick adoption of the Multiannual Financial Framework would send an immediate signal that Europe is ready to invest in our future, that we are serious about growth.

European Union budget is NOT a budget for 'Brussels', for the EU structures or institutions. It is money for European regions, cities, students, SMEs, researchers and many others.

Consolidating the Economic and Monetary Union

Banking Union

There is now momentum building for further integration in the euro area and the European Union as a whole.

Financial integration is one area where major progress could quickly be made, even without Treaty changes, with enormous benefits for citizens and investors in terms of protection and market confidence.

Thus, the creation of a banking union appears as a natural priority.

President Barroso sees two majors steps to be taken:

  1. Acceleration of the adoption of proposals already on the table, such as single rulebook and Banking resolution
  2. Agreement on key proposals prepared by the Commission by Autumn including for example more integrated banking supervision or common deposit guarantee scheme

Read the summary of steps already taken and expected to be taken in near future.

Fiscal Union

The full benefits from deepening the economic and monetary union and from creating the banking union could only be reaped by the development of the fiscal union.

What needs to be done:

  1. Build on the effective coordination of fiscal and economic policies through the European semester, including through the swift adoption of the "two pack" proposals.
  2. Refine the financial backstops – the EFSM, the EFSF and its successor, the ESM

Launch a serious discussion of the joint issuance and mutualisation of national debt in the form of stability bonds (Read the Commission's Green Paper)

Political Union

A deeper economic and monetary union requires deeper accountability and legitimacy. Decisions of historic dimension need to be prepared, and the citizens need to be involved in the debate.