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Building a stronger economic union - 14/12/2011

European Commission President José Manuel Barroso at the European Parliament in Strasbourg © EU

Agreement by most EU governments on further economic integration should be complemented by moves to restore growth and create jobs, says Barroso.

Speaking to the European Parliament about decisions made on 8-9 December by EU leaders, Commission President Jose Manuel Barroso stated that the decision by 26 out of 27 governments on a new intergovernmental treaty setting tighter budget rules showed their readiness to move ahead with further European integration.

The treaty would require governments to keep their general budgets balanced or in surplus. Those who exceed a deficit cap of 0.5% of GDP would have to bring their budgets back into balance under the oversight of the Commission and other EU countries.

Governments are expected to sign the treaty in March 2012. It is seen as an important part of the EU’s response to the financial crisis – and the eurozone’s debt crisis.

This response includes:

  • 6 measures to improve budget monitoring and help control public debt – in force from 13 December 2011
  • 2012 growth survey – recommendations on growth, job creation and public finances to start the annual 6-month cycle during which governments get the input of EU peers as they formulate their budgetary and economic policies
  • bringing forward the creation of the EU's permanent bailout fund to July 2012 (the current temporary fund will continue until mid-2013).

EU leaders will decide soon on whether to provide the IMF with up to €200bn more to help debt-stricken eurozone countries.

In March 2012 they will discuss ways to further budget coordination and examine a proposal to allow the eurozone to collectively issue bonds.

Growth and jobs

President Barroso also called for rapid action on additional measures to stabilise the economy and create jobs, including:

  • implementation of existing measures to deepen the EU’s economic integration (on services, energy, innovation, the Internet, and free trade agreements)
  • adoption of proposals on small businesses, better regulation, tax reform and energy security.

More on President Barroso’s speech to Parliament – 13 Dec.

More on the European Council meeting 8-9 Dec.

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