The Heads of State or Government will take stock of the progress made by the Eurogroup in deepening Economic and Monetary Union (EMU) and will set out, in a short statement, guidelines on the work that remains to be done on Friday 13 December at a euro area summit.
The President of the Eurogroup, Mário Centeno, will present to the EU Twenty-Seven the progress made over the past six months on the basis of the mandate received in June and summarised in his letter to the leaders in early December (see EUROPE 12384/1). It will not be a matter of leaders giving him a new mandate.
The drafting of a revised treaty for the European Stability Mechanism (ESM) aims to define the increased powers that the permanent euro area rescue fund will have when it comes to the assistance of a country in difficulty. It also aims to establish the role of the ESM as a backstop if the Single Resolution Fund - the financial arm of the resolution component of the banking union - required more financial resources to sort out a bank. Its maximum intervention has been set at €68 billion and a decision on its early introduction (before 2024) will be taken in 2020.
At the beginning of December, euro area ministers also tried - without success - to reach agreement on a roadmap to relaunch negotiations on finalising banking union at political level by creating a European deposit insurance scheme (EDIS).
Contrary to hopes expressed, these two projects have not been successful, with the Eurogroup hoping to achieve them for the ESM in January, if Italy withdraws its reservations. But this country, which is eager to see the banking union finalised, is also laying down conditions by refusing to make this finalisation conditional on the introduction of a risk linked to banking exposure to sovereign debt.
We must take into consideration the situations of countries like "Italy", the President of the European Council, Charles Michel, told the press on Wednesday 11 December. "On EMU, I hope to have a strategic debate to see how, in the coming months, we can make progress ", he added, citing work on "the fiscal capacity of the euro area".
On this point, real progress has been made, even if the question of additional funding for this budget for the Euro area, by the elaboration of an intergovernmental agreement, has not received consensus (see EUROPE 12346/2).
According to a European diplomatic source, the "strategic" discussion on EMU could also focus on "the international dimension of the euro".
Mr Michel also considered it important to prepare the euro area summits as well as possible through preparatory meetings with Mr Centeno and the Presidents of the European Commission, Ursula von der Leyen, and the ECB, Christine Lagarde.
See the letter from Mr Centeno to Mr Michel: http://bit.ly/2DPoXZy (Original version in French by Mathieu Bion and the editor)