Brussels, 16/12/2015 (Agence Europe) - The European summit will debate the enhancing of economic and monetary union (EMU) on Friday 18 December based on proposals from the European Commission arising from the five presidents' report.
The president of the European Council, Donald Tusk, said in the summit invitation letter to European leaders on Tuesday 15 December that there was no room of complacency about reform of the eurozone. Greater consolidation was needed for Banking Union, he said, along with improvements to economic governance.
According to a draft conclusions document dated Monday 14 December that this newsletter has seen, the EU28 will ask the Ecofin Council to 'rapidly' examine the Commission's proposal to establish a European bank deposit (savings) guarantee system (EDGS), the third pillar of Banking Union. Germany is not happy about the proposal, wanting financial risks to be dealt with before any progress is made on risk pooling (see EUROPE 11448). Berlin has found itself relatively isolated on this question of sequencing, although the Commission has made suggestions in this domain.
An earlier version of the draft summit conclusions document mentions the need to work in parallel on the reduction and sharing of financial risks, but this has been removed. France reportedly wanted the EDGS system and future backstop for the single resolution fund (SRF), the financial arm of the resolution side of Banking Union, to be mentioned, but Germany felt this was going too far.
The European Summit will call for rapid progress on economic and budget governance and rationalisation of the eurozone's external representation at the IMF. The Commission has issued special proposals, including the creation of national competitiveness authorities and a European budget committee (see EUROPE 11415).
Postponed a number of times in order to deal with the refugee crisis, reflection on the future of EMU will be pursued at the highest political level in June 2016 on measures not requiring any change to the treaty. The European Summit will return by the end of 2017 to the more ambitious measures in the five presidents' report, such as the eurozone's own budget capability in order to provide aid to countries implementing deep-rooted economic reforms (see EUROPE 11340). (Original version in French by Mathieu Bion with CC. Gessant and E. Lamer)