Friday

24th Nov 2017

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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

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.

EU agencies and eastern neighbours This WEEK

EU ministers will vote on where to relocate two EU agencies from the UK, while later EU leaders will host six eastern European countries in Brussels. Former Bosnian Serb commander Ratko Mladic awaits his verdict in the Hague.

Irish crisis may complicate Brexit summit

Snap elections are on the horizon in Ireland over the future of Irish PM's right-hand woman, three weeks before Irish PM is due in Brussels for a crucial Brexit vote.

News in Brief

  1. Merkel: Germany remains 'active' in EU
  2. Work with Israel, Egypt on gas exploration, says Commission
  3. Only seven EU states have 'advanced' stage climate plans
  4. EU dashes integration hopes of eastern countries
  5. EU approves joint Irish electricity scheme
  6. German president to launch 'Grand Coalition' talks
  7. Irish opposition 'threatens national interest', says minister
  8. SPD drops opposition to grand coalition in Germany

Stakeholders' Highlights

  1. European Friends of ArmeniaSignature of CEPA Marks a Fresh Start for EU-Armenia Relations
  2. Nordic Council of MinistersNordic Energy Ministers Pledge to Work More Closely at Nordic and EU Level
  3. European Friends of ArmeniaPresident Sargsyan Joined EuFoA Honorary Council Inaugural Meeting
  4. International Partnership for Human RightsEU Leaders Should Press Azerbaijan President to End the Detention of Critics
  5. CECEKey Stakeholders to Jointly Tackle the Skills Issue in the Construction Sector
  6. European Friends of ArmeniaLaunch of Honorary Council on the Occasion of the Eastern Partnership Summit and CEPA
  7. Idealist Quarterly"Dear Politics, Time to Meet Creativity!" Afterwork Discussion & Networking
  8. EPSUStudy Finds TUNED and Employers in Central Governments Most Representative
  9. Mission of China to the EUAmbassador Zhang Ming Received by Tusk; Bright Future for EU-China Relations
  10. EU2017EEEstonia, With the ECHAlliance, Introduces the Digital Health Society Declaration
  11. ILGA EuropeFreedom of Movement For All Families? Same Sex Couple Ask EU Court for Recognition
  12. European Jewish CongressEJC to French President Macron: We Oppose All Contact With Far-Right & Far-Left

Latest News

  1. What Armenia's new agreement with the EU means
  2. Member states still lack definition of 'energy poverty'
  3. Chinese the most bullish on EU investment, report finds
  4. Lead MEP says EU is weeks away from deal on car approvals
  5. EU still giving gas projects 'fast-track' status
  6. Irish crisis may complicate Brexit summit
  7. UK to call out 'hostile' Russia at EU summit
  8. EU calls for better disease prevention