Tuesday

23rd May 2017

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.

Portugal held up as symbol of EU recovery

Portugal to sail out of troubled waters after eight years of financial crisis, EU commission predicted, amid broad but "fragile" recovery in European economy.

Trade deal ratification needs member states, EU court says

The EU Court of Justice has ruled that the Singapore trade deal needs member states' ratification in its current form. It said that only investments do not belong under the EU's sole competence, potentially removing Brexit complications.

Stakeholders' Highlights

  1. UNICEFChild Alert on Myanmar: Fruits of Rapid Development yet to Reach Remote Regions
  2. Nordic Council of MinistersBecome an Explorer - 'Traces of Nordic' Seeking Storytellers Around the World
  3. Malta EU 2017Closer Cooperation and Reinforced Solidarity to Ensure Security of Gas Supply
  4. European Healthy Lifestyle AllianceHigh-Intensity Interval Training Is Therapeutic Option for Type 2 Diabetes
  5. Dialogue Platform"The West Must Help Turkey Return to a Democratic Path" a Call by Fethullah Gulen
  6. ILGA-EuropeRainbow Europe 2017 Is Live - Which Countries Are Leading on LGBTI Equality?
  7. Centre Maurits CoppietersWhen You Invest in a Refugee Woman You Help the Whole Community
  8. Eurogroup for AnimalsECJ Ruling: Member States Given No Say on Wildlife Protection In Trade
  9. European Heart NetworkCall for Urgent Adoption of EU-Wide Nutrient Profiles for Nutrition & Health Claims
  10. Counter BalanceInvestment Plan for Europe More Climate Friendly but European Parliament Shows Little Ambition
  11. Mission of China to the EUPresident Xi: China's Belt and Road Initiative Benefits People Around the World
  12. Malta EU 2017EU Strengthens Control of the Acquisition and Possession of Firearms