On Friday 27 October, the Heads of State or Government of the countries of the European Union called on the Council of the EU to make progress on the reform of the European economic governance framework “with a view to concluding the legislative work in 2023”.
The Spanish Prime Minister, Pedro Sánchez, spoke of the “intense” work carried out by the Spanish Presidency of the Council. At the Ecofin Council meeting in Luxembourg on Tuesday 17 October (see EUROPE 13273/13), the Commission indicated its intention to present an initial compromise legislative text to the national delegations with a view to the Ecofin Council meeting on Thursday 9 November.
Some believe that a political agreement in principle (‘general approach’) at the Council may not be reached until Friday 8 December, although an extraordinary ministerial meeting between 9 November and 8 December is not out of the question.
French President Emmanuel Macron has called for the EU to adopt new fiscal rules “as quickly as possible”. “We will have to work hard” to achieve a result on the reform of the Stability Pact, said German Chancellor Olaf Scholz.
On Thursday, the Portuguese Prime Minister, António Costa, pointed out that in the absence of an agreement on the reform of the Stability and Growth Pact, the rules in force, which had been frozen since the outbreak of the Covid-19 pandemic in the spring of 2020, would start to apply again at the beginning of 2024 and, according to him, “a certain number of countries would have difficulty complying with them”. It is important that the rules are intelligent, i.e. that they have “no pro-cyclical effect as has been the case in the past” (...) and that countries have room to invest in the energy transition.
CMU. In the declaration adopted at the end of the Euro Summit in inclusive format, European leaders took note of the Eurogroup’s work to identify measures to be taken in the medium term to deepen national capital markets (CMU - capital markets union) and, above all, to better integrate them within the single market (see EUROPE 13279/10).
In his letter to the Euro Summit, the President of the Eurogroup, Paschal Donohoe, detailed the three phases of the ministerial discussions on the CMU, which will culminate in the presentation, at the Euro Summit in March 2024, of recommendations intended to feed into the work programme in the area of financial services during the next legislature.
See the President of the Eurogroup’s letter: https://aeur.eu/f/999
European leaders are also calling for continued efforts to complete banking union in the euro area.
ESM. Finally, Mr Donohoe reiterated the importance for the euro area of Italy ratifying the reform of the ‘European Stability Mechanism’ (ESM), the euro area’s permanent rescue fund (see EUROPE 13251/11).
“If the treaty is not ratified by all, no country will be able to access the (Single Resolution Fund) in the future, if we find ourselves in a crisis situation”, he said.
In response, the President of the Italian Council, Giorgia Meloni, argued that the reform of the ESM could not be ratified unless Italy had a clear idea of the future European framework for economic governance. “The ESM refers back to the old constraints of the Stability Pact while a new Pact is being negotiated. We need to understand what this framework is”, she argued.
See the conclusions of the Euro Summit: https://aeur.eu/f/9ay
See the conclusions of the European Council of 26 and 27 October: https://aeur.eu/f/9au (Original version in French by Mathieu Bion, with the editorial staff)