Although no major decision was made on Economic and Monetary Union (EMU) at the Eurozone Summit of Friday 15 December, the heads of state and government of the member states, with the exception of the United Kingdom, agreed on a plan of work with a view to consensus on certain reforms at a new summit on the subject, to be held in June 2018.
A number of points were discussed at this euro summit in extended format. However, as we announced on Wednesday 13 December (see EUROPE 11925), most of the progress in this exchange of views between European leaders was made on Banking Union, as this is the priority of several member states, including Spain and Italy.
The Eurogroup, the ‘club’ of the 19 Eurozone finance ministers, was called upon to work on three themes: - the completion of Banking Union, for instance by the creation of a backstop for the Single Resolution Fund, in the form of a line of credit of the European Stability Mechanism (ESM); - the European Deposit Insurance System (EDIS), which is to return to the agenda of the Eurozone finance ministers in the coming months; - the possibility of converting the ESM into a European Monetary Fund (EMF), as proposed by the European Commission on 6 December (see EUROPE 11920), which the Eurogroup is also expected to look into.
Finally, the finance ministers will look at ways of promoting the growth of pan-European capital markets.
Towards meeting in March. The results of the work will be notified to the heads of state or government of the Eurozone, who are to meet in March.
A lively debate between Emmanuel Macron and Mark Rutte, the head of the Dutch government, is reported to have taken place on the possibility of this meeting. Rutte reportedly opposed the idea, which has Macron’s ardent support.
According to the French President, such a meeting would provide an opportunity to set a short- and medium-term roadmap for the EU and prepare a forthcoming euro summit in June 2018. This could be the time to take the first decisions, said the President of the European Council, Donald Tusk.
Despite the timetable, there are real differences of opinion in the above three areas, as the Italian Prime Minister, Paolo Gentiloni, acknowledged.
Although Angela Merkel’s difficulties in forming a government may suggest that no decision is likely to be made in the next few months, a diplomatic source took pains to play down this idea. The teams of the current German Chancellor, who is very likely to be the head of the next government, are already able to work on future reforms.
Symbolically, Macron and Merkel gave a joint press conference on the subject and expressed their determination to work through their differences to build a consensus on the major challenges of the EMU.
Major questions still not on the agenda. On Friday, however, the discussions were mostly fairly consensual, steering clear of the most sensitive points of the long-term future of Economic and Monetary Union, as the member states’ positions differ as to the necessary level of ambition.
No timetable has been set for the possible creation of the post of European finance minister or a specific budget for the Nineteen, of which France and Spain are notable proponents, the Commission not having considered the latter reform in its package of proposals of early December. (Original version in French by Lucas Tripoteau)