Brussels, 30/10/2009 (Agence Europe) - EU Heads of State and governments examined the current economic situation and work on financial supervision. In the conclusions adopted Friday 30 October, the European Council noticed a perceptible increase in confidence but affirmed that, “there is no room for complacency”. This situation requires a coordinated budget deficit exit strategy and a rapid strengthening of EU supervision.
Deficit exit strategy. Budget support implemented by member states and central bank measures should not be withdrawn “until the recovery is fully secured”, indicate the conclusions, which also underline the importance of a coordinate deficit exit strategy. The Commission and Council should support the work on this point in view of the December summit, explained EU leaders, who by ratifying the Ecofin Council conclusions (EUROPE 10000), give their backing to the principles defined by the Finance ministers.
Finance ministers underline that the return to budgetary consolidation should begin in 2011 at the latest and will require an 0.5% more in GDP annually. The ending of budget incentives will be enacted in relation to the level of recovery in growth and will take the specific situations into account. It will also need to be accompanied by further structural reforms in an effort to increase productivity and long term investment, insisted ministers who subsequently placed the debate in the perspective of the future post-2010 Lisbon strategy.
At the request of Austria, Germany, France and the United Kingdom, the European Council also called on the Commission to examine possibilities for world level innovative finance and thus demonstrated their wish to set up a tax on financial transactions.
The European Council also highlighted the need to coordinate European and international action in order to generate new sources of growth and employment. It underlined the importance of strengthening the internal market and financial sector and increase investment in industry and promote trade.
With the prospect of increased unemployment, the EU also renewed their commitment to pro-active labour market policies. They underlined that the EU can help by promoting cooperation, coordination and mutual learning.
Financial supervision in Europe. The EU27 is in broad agreement with the decisions made by the finance ministers on the two legislative proposals to create the European systemic risk board (CERS), macro-prudential legislative package reforming the European financial supervisory system ( EUROPE 10002). They are therefore demanding the Swedish presidency to launch the process with the European Parliament on a draft Council regulation and decision on this subject.
They also called for progress to be made on the micro-prudential section of supervision and the setting up of “European supervisory authorities” (ESA) and hope to be able to get an agreement by December on all measures to set up the new supervisory structure in the EU.
London wants to be able to speak again on the matter before the Ecofin Council reaches an agreement. The European Council conclusions include the possibility of Heads of State to return to the question at their next meeting. This should therefore be the case in November at the special summit on nominations linked to the entry into force of the Lisbon Treaty.
They also call for rapid progress to strengthen the prevention, management and resolution of financial crisis in the even of cross-border financial institutions going bankrupt, in compliance with the result of the most recent Ecofin Council (EUROPE 9998).
Following the G20 decision to set up a “framework for strong, sustainable and balanced growth” inaugurating multilateral monitoring at an international level, the IMF and G20 will have to fully take into account the EU's institutional organisation and that of the Euro zone in the area of economic policies, affirm the European Council.
Energy. The European Council also welcomes the progress accomplished in energy infrastructures and interconnections as well as crisis mechanisms. It calls on the different actors to urgently implement the next stages defined in the presidency report (EUROPE N.976), particularly the draft regulation on gas supply security, which should be adopted as soon as possible. (A.B.)