Brussels, 13/12/2012 (Agence Europe) - The presidency of Eurogroup's official task is to strengthen Economic and Monetary Union (EMU). It could, however, become a flagship - albeit unofficial - subject at the European Council, which began its work on Thursday 13 December.
Several indications suggest that such discussions may take place between euro zone countries in a backdrop to the summit. The German Chancellor, Angela Merkel and the president of France, François Hollande, met each other before the beginning of the summit in an effort to sort out the final details of the future single banking supervisory mechanism on which the ECOFIN Council reached a political agreement in the small hours of Thursday morning (see other article). On Thursday, at the end of the euro zone finance ministers' meeting on Greece and Cyprus (see other article), Jean-Claude Juncker indicated that he would tackle the question of the presidency of Eurogroup (which he would like to leave at the end of January 2013 at the latest) with the president of the European Council Herman Van Rompuy. On Wednesday, the Finnish prime minister, Jyrki Katainen, explained that Germany and France had tried to reach an agreement on the Eurogroup presidency and that the name of a possible president may emerge in the next few days. According to Reuters, he indicated that it was absolutely impossible for him to become a full-time president but in his opinion, this will not be requested. In October 2011, the European Council asked for a decision to be taken when the mandate of Juncker expired, on the question of knowing whether (the next president of Eurogroup) should be elected by the members of Eurogroup or whether he should be a full-time president based in Brussels.
Roadmap. The European Council will adopt orientations on how to strengthen EMU on the basis of a roadmap that the president of the European Council, Herman Van Rompuy, presented it with (see EUROPE 10749). At this stage, the objective is not to provide the European Union, especially the eurozone, with a vision of its financial, budgetary, economic and political integration up to 2020. By 2014, the foundations are already visible: increase ex ante coordination of national economic policies and make progress with banking union. In addition to the implementation of the single supervisory mechanism by March 2014, work will be launched in 2013 on the European authority responsible for banking restructuring, once the national restructuring systems and deposit guarantees are harmonised. Van Rompuy's idea of linking this European authority to the European Stability Mechanism has not totally been integrated into the draft conclusions and only the necessity of “adequate and appropriate” funding is mentioned.
When he arrived at the European Council, French president Francois Hollande declared that an agreement had been reached on the measures correcting the causes that provoked the crisis. He mentioned the example of banking supervision, aid to Greece, enhancing budgetary discipline and ECB intervention. According to Hollande, the EU 27 must be able to agree on how to broaden the Stability Pact through the coordination of economic policies.
Contractualisation. Hollande thinks that the time for major political decisions will not arrive until after the 2014 European elections. According to the most recent version of the draft conclusions (see Twitter @AgencEurope), European leaders will take up the idea again of contractualisation between a member state and European levels with regard to the major economic reforms to be implemented. Such an instrument will be obligatory for all euro zone countries and open to the others on a voluntary basis. It is not simply intended to provide greater discipline, it also seeks to ensure “ownership” of the reforms at a national level, explained a senior European diplomat. States that make a commitment to this approach will be able to benefit from financial assistance, particularly through a eurozone budgetary capacity measure. The European Council will again examine these questions in March 2013, so that the Commission can submit a legislative proposal after the adoption of the 2014-2020 financial framework. On the other hand, the question that has been causing problems to Germany and France, the partial mutualisation of debt, has been removed. (MB/transl.fl)