Tuesday

3rd May 2016

EU commission foresees two treaty changes to reach full integration

  • Jose Manuel Barroso says he's offering the "broadest and most balanced vision" on EMU to date (Photo: consilium.europa.eu)

The EU commission Wednesday published its vision for a "genuine" economic and monetary union (EMU) under which national budgets could be vetoed and a central European budget would allow transfers for troubled countries.

The process would require two rounds of treaty change – one within the next five years and another more profound exercise in the longer-term.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

The 52-page blueprints emphasises the need for the eurozone to be able to "integrate quicker and deeper" than the rest of the EU, with the eurozone now largely seen as paying for being established as a political project without the fundamental economic and financial structures to back it up.

Ideas for the future include coordinating national tax and employment policies, eurobonds, and a eurozone budget managed by a treasury in the European Commission.

European Commission President Jose Manuel Barroso said the "main message" of the document is that both discipline and solidarity are needed for the EMU to survive.

The paper envisages progress in three steps.

Within the next 18 months, the EU should set up a banking union and establish a "convergence and competitiveness instrument" - money that member states would use to undertake structural reforms. Countries with a budget deficit breaking EU rules would be obliged to use the instrument.

Within five years, the "convergence instrument" would be built up into a separate eurozone budget that would be funded by own taxes in the eurozone.

This time frame would also see "further budgetary coordination (including the possibility to require amendments to national budgets or to veto them)," says the paper.

There should be short-term eurobonds - the pooling of euro states' debt - and a redemption fund for states with large public debt. These steps would need a treaty change.

Other steps to consider would be giving "clear competence for the EU level to harmonise national budgetary laws and to have recourse to the Court of Justice in case of non-compliance."

Final steps to full economic and monetary union would only be taken in the "longer term" and would require "major treaty reform" suggests the paper.

This would likely include a possibly large central budget with stabilisers – meaning money would be transferred to member states in trouble.

“As a final destination it would involve a political union with a central budget as its own fiscal capacity and a means of imposing budgetary and economic decisions on its members.”

Noting the “degree” of sovereignty member states would have to hand to Brussels, the paper suggests that the European Parliament “primarily” needs to ensure the democratic nature of the process.

The blueprint underlines that intergovernmentalism – where governments alone take decisions – would undermine the “accountability” of the set-up.

The paper is to feed into a report on the future of economic and monetary union to be discussed by EU leaders next month.

Many of the ideas proposed have already cropped in other commission papers but the main stumbling block remains unchanged – the political will of member states.

News in Brief

  1. Hungary to hold migrant quota referendum by October
  2. France rejects TTIP in its current form, says Hollande
  3. New commander takes charge of US forces in Europe
  4. Spain issues arrest warrants for Russian officials
  5. Pro-Putin bikers refused entry by Poland, Lithuania
  6. Nato gives details of new Baltic force
  7. German state gets historic Green-CDU coalition
  8. Chinese police to patrol Italian streets

Stakeholders' Highlights

  1. European Music CouncilRegister Now for the 6th European Forum on Music in Wroclaw, European Capital of Culture 2016
  2. Belgrade Security ForumJoin Our Team for the 6th Belgrade Security Forum. Apply Now! Deadline May 20
  3. European Roundtable of IndustrialistsCompanies Make Progress on Number of Women in Leadership Roles
  4. Counter BalanceParliament Gets Tough on Control EU Bank's Funds
  5. ICRCSyria: Aleppo on the Brink of Humanitarian Disaster
  6. CESIWorld Day For Health and Safety at Work: Public Sector Workers in The Focus
  7. EFABasque Peace Process-Arnaldo Otegi Visits the European Parliament
  8. EscardioChina Pays Price of Western Lifestyle With Soaring Childhood Obesity
  9. Centre Maurits CoppetiersThe Existence of a State is a Question of Fact, Not a Question of Law
  10. Martens CentreJoin Us at The Event: Prospects For EU Enlargement After 2019
  11. ICRCSyria: Aid for Over 120,000 People Arrives in Besieged Town Near Homs
  12. Counter BalanceHighway to Hell: European Money Fuelling Controversial Infrastructure Projects