Friday

22nd Jun 2018

Agenda

Minimal changes to euro structure at this WEEK's summit

  • EU leaders are lowering their ambitions on eurozone reform, although the euro crisis remains (Photo: Brett Jordan)

EU leaders gathering Thursday and Friday (13-14 December) in Brussels for their sixth summit this year are likely to fudge plans for more integration in the eurozone that were originally aimed at calming market fears about the survival of the euro.

Back in June when Italy and Spain's borrowing costs were going through the roof and the threat of a Greek euro-exit was real, EU leaders had pledged to agree by the end of the year to an ambitious plan for the future of the eurozone, including changes to the EU treaties.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... our join as a group

But with the announcement by the European Central Bank in August that it may purchase "unlimited" amounts of bonds from states under market pressure -provided they sign up to a reforms programme similar to the ones previously imposed on bailed-out countries - borrowing costs went back to normal and the appetite for EU leaders for far-reaching reform vanishing.

The plans now are limited to the setting up of a single banking supervisor for eurozone banks and, in future, the establishment of a eurozone-only budget. Binding "contracts" for EU governments are intended to give more leeway to the European Commission's monitoring of labour market of fiscal reforms in member states, in order to prevent future booms and busts.

But more ambitious ideas - eurobonds or a deposit guarantee scheme allowing people's savings to be protected anywhere in Europe - have become a no-go area, mainly due to Germany. The centre-right government of Angela Merkel is staunchly opposed to anything that would have more German taxpayer money underwriting government debt or bad banks elsewhere in the eurozone.

A eurozone budget "absorbing the shocks" in a monetary union where countries cannot deflate their currency is something the Germans can live with, provided Brussels gets more scrutiny over member states' public finances.

Talks on the so-called banking union have meanwhile started off on the wrong foot with Germany again opposed to the current proposal to put all 6,000 banks under the supervision of the European Central Bank and non-euro members seeking a more prominent say in the new set-up. EU finance ministers will have another go at a deal on Wednesday (12 December), with the Cypriot EU presidency expected to table a new compromise "with input" from the EU commission.

The other elements of a "banking union" - a fund to which banks themselves contribute so that it can be used when one goes bust without having to use public money and the deposit guarantee scheme are now pushed back to an indefinite deadline.

A special meeting on Greece will take place on Thursday morning among eurozone finance ministers, with the results of the bond buyback scheme and the final assessment of the troika needed to disburse the long-awaited bailout tranche of €43.7 billion.

Another acrimonious matter, the EU budget for 2012-2013 is expected to be voted on Wednesday in the European Parliament, provided a written statement is signed by all EU institutions on solutions to future budget gaps.

On the same day, Iranian human rights activist Nasrin Sotoudeh and movie director Jafar Panahi will receive the Parliament's Sakharov prize for freedom of thought.

Meanwhile, a dozen EU leaders and the heads of the main EU institutions will participate on Monday in the Nobel peace prize ceremony in Oslo, with the EU as a whole having been awarded the prize this year.

Eurozone needs a 'shock absorption' fund

A eurozone-wide 'shock absorption' fund should be created to assist countries in economic difficulty, according to a paper that will take centre stage at next week's EU summit.

Franco-German rift derails banking union deal

EU finance ministers will return to Brussels on the eve of the December EU summit next week for last ditch talks on the controversial banking union proposals, after failing to reach agreement on Tuesday.

Draghi seeks to allay German concerns on banking union

European Central Bank chief Mario Draghi sought to downplay a clash of views with the German government over the scope of a new banking supervisor by suggesting a bigger role for national supervisors when it comes to small regional banks.

Germany to EU: stop talking about new budget schemes

German officials are in eye-rolling mode ahead of an EU summit about plans to create a eurozone "shock absorption fund" and say leaders should focus on reforms and stick to their promises.

Greece and Merkel's fate top This WEEK

Eurozone ministers are expected to give the green light to the final disbursement of aid to Greece and agree on measures to help with its debt burden. Meanwhile, the government in Berlin is shaken by Bavarian rebels over migration.

Greece and creditors proclaim 'end of crisis'

After late-night talks, the Eurogroup agreed on a €15bn disbursement and debt relief measures for Greece, while setting out a tight monitoring when the bailout ends in August.

News in Brief

  1. Venice Commission: Hungary should repeal NGO law
  2. Trump threatens to slap 20 percent tariff on EU cars
  3. EU closes deficit procedure against France
  4. Romania's ruling party leader gets jail sentence
  5. EU states defer individual decisions on asylum reforms
  6. Commission opens case on Qatar gas flow
  7. EU adopts posted workers directive
  8. EU leaders to call for 'coordinated plan' on AI

Stakeholders' Highlights

  1. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  2. Macedonian Human Rights MovementMHRMI Launches Lawsuits Against Individuals and Countries Involved in Changing Macedonia's Name
  3. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  4. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  5. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  6. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  7. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  8. Mission of China to the EUChina: Work Together for a Better Globalisation
  9. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  10. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  11. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  12. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network

Latest News

  1. Migration row at centre of EU summit This Week
  2. Merkel's woes cast shadow on EU's future
  3. Europe's tech race - trying to keep pace with US and China
  4. Merkel and Juncker's mini-summit risks fiasco
  5. Greece and creditors proclaim 'end of crisis'
  6. How a US firm pushed for EU €2.1trn pension fund
  7. Commission defends Africa migrant plan ahead of summit
  8. Bavaria hijacks EU migration talks

Join EUobserver

Support quality EU news

Join us