The European Parliament, Brussels
15 September 2015
First of all, I would like to thank you for this opportunity to have an exchange of views on the deepening of the Economic and Monetary Union.
As you all know, a couple of months ago, the Five Presidents' Report was presented, outlining a number of important ideas and directions of work. Now the European Commission is concentrating on the follow-up of the Five Presidents' Report, to come forward with the concrete proposals.
The report suggests to move forward in two stages. In the first stage, presumably until mid-2017, it suggests to concentrate on what can be done right now, without Treaty change – this is what we call "deepening by doing".
In stage two, we will take a more fundamental look at the architecture of the EMU as a currency union: what links are missing and what needs to be done to strengthen the Economic and Monetary Union.
As the President of the Commission, Mr Juncker, clearly stated in his State of the Union speech, the Commission will move forward without delay with the first initiatives, ahead of the new European Semester cycle.
We have already listened to the views of the Council, most recently in the informal ECOFIN Council over the weekend. Now it's a good opportunity to listen to the views of the European Parliament. The European Parliament has already adopted two reports in this area: The Pervènche Berès report on Economic governance and Dariusz Rosati's report on the European Semester, which both provide an important contribution in this regard.
Concretely, what are the suggestions we are now working on? And how are we planning to implement the Five Presidents' Report?
First, on the improvement of the economic governance framework, where we already made changes to the European Semester this year, to sharpening its focus; better involve national stakeholders, including social partners; also improve reporting and benchmarking; and strengthen the social dimension.
We intend to continue this work in the next European Semester, to further sharpen the focus and to integrate euro area and national dimensions better.
Second, if we talk about macroeconomic governance, we intend to use the Macroeconomic Imbalances Procedure more effectively because, as the Five Presidents' Report outlines, the procedure is there, but currently has not really been used.
One of the areas outlined in the Five Presidents' Report is the need to strengthen competitiveness, to ensure sustainable economic growth and also Europe's future position in the world economy.
We propose to create a system of national competitiveness authorities with the specific task to monitor wage and productivity developments, but also non-cost competiveness factors.
Third, we will put a special focus on the social dimension, strengthening the use of employment and social indicators and further strengthening the involvement of social partners.
We are also looking at the proposal in the Five Presidents' Report to create an advisory European Fiscal Board, to provide input to the debate on fiscal policy. It should be independent and it could advise on both the euro area fiscal stance and on the consistent implementation of rules across time and across countries.
In the meantime, the role of the Chief Economic Analyst in the European Commission could be further reinforced in the context of preparing ideas on the European Fiscal Board.
The second direction of work concerns the Banking Union, where much has been done, but important elements remain missing. First, we need to focus on implementing what has already been agreed, including the transposition of Bank Resolution and Recovery Directive and reaching an agreement on bridge financing of the Single Resolution Fund.
And further, the Commission also intends to come forward with proposals on the European Deposit Insurance Scheme in a two-stage approach, as outlined in the Five Presidents' Report: the first stage being the re-insurance scheme for the national deposit guarantee schemes, then moving to the European Deposit Insurance Scheme in the second stage.
We also work towards reinforcing democratic accountability, legitimacy and institutional strengthening, including with a legislative proposal on the external representation of the euro area, especially as regards the IMF.
We intend to strengthen the involvement of European and national Parliaments and social partners in macroeconomic governance and macroeconomic decision making. We can make specific progress here on the European Semester. Just to give some examples: The report invites the European Parliament to hold plenary debates on the Annual Growth Survey before and after it is published by the Commission. We are open to consider how we can further improve our dialogue on Economic Adjustment Programmes and their implementation. Certainly I'm very interested to listen to your ideas on this point.
And just two remarks on the second stage: currently, we are setting up an expert group to reflect on the second stage, for a deeper look at the architecture of the Economic and Monetary Union. The Commission intends to prepare a White Paper on the second stage by 2017.