European Council President Donald Tusk wants to take forward the debate among European leaders on the reform of governance of the eurozone.
In a letter sent to the 28 leaders on 21 September ahead of their informal dinner on the evening before the informal Tallinn digital summit, Tusk argues for “step by step” reform to improve and strengthen the functioning of the economic and monetary union (EMU). The priority must, he says, be to complete the banking union in the euro area by setting up a European deposit insurance scheme (EDIS) while taking forward further financial risk reduction. The European Commission will present a package of proposals on this on 11 October (see EUROPE 11862).
In the longer term, Tusk also calls for the European stability mechanism (ESM), the eurozone’s permanent safety fund, to be developed towards a European monetary fund (EMF) and for continuation of the debate on governance and resources specific to the euro area, along the lines of what was envisaged by finance ministers at their informal meeting in Tallinn in mid-September (see EUROPE 11863).
Tusk’s position bears some resemblance with that of European Commission President Jean-Claude Juncker. In his State of the Union speech (see EUROPE 11861), Juncker also announced that the Commission would, at the start of December, propose that a budget line be created for the countries of the euro area reforming their economy and that the economic and financial affairs commissioner assume the role of economy and finance minister.
To move forward, Tusk has announced that a eurozone summit, “in an inclusive format” will be held on the sidelines of the European Council in mid-December. This summit will bring together all the member states that wish to become involved, just as was done for the drafting of the budget pact, with 25 member states ratifying (see EUROPE 10758).
A few days before the informal dinner in Tallinn, on Tuesday 26 September, French President Emmanuel Macron will set out the French proposals on how the governance of the euro area should develop.
Brexit as a political priority. Not surprisingly, Tusk, who is due to meet UK Prime Minister Theresa May in London on Tuesday 26 September, points out in his letter that the withdrawal of the United Kingdom from the EU remains a major task over the coming months (see other articles). It will be at the heart of the next European Council, to be held on 19 and 20 October, on the sidelines of which the 27 heads of state and/or government will meet without their UK counterpart to take stock of the on-going negotiations.
Conclusion of an agreement with the United Kingdom on leaving the EU is, for Tusk, a prerequisite for discussions on the post-2020 multiannual budget. Greater clarity on the medium-term budgetary impact of Brexit is needed before beginning discussion of the next multiannual financial framework (see EUROPE 11721).
Western Balkans summit in May 2018. The letter also highlights the need to continue to develop the international role of the Union, both in its neighbourhood and at the global level.
Tusk proposes that the next European Council discuss the political events in Turkey (see other article). He suggests, too, in agreement with Bulgarian Prime Minister Boiko Borisov, that heads of state and/or government meet in Bulgaria for a Western Balkans summit.
A summit of this sort would be the first since the 2003 Thessaloniki summit (see EUROPE 8488). In Trieste in July, the six countries of the Western Balkans pledged to develop a regional economic area, supported by the EU (see EUROPE 11829).
Neither, however, does the European Council president lose sight of other issues of concern, speaking in his letter of the progress made and work still to be done in migration and economic and social matters.
The discussions at the informal dinner are likely to be frank as they will not give rise to conclusions. (Original version in French by Lucas Tripoteau)