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Deepening Europe’s Economic and Monetary Union

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Ahead of the Euro Summit on 21 June 2019, the European Commission today takes stock of the progress made to deepen Europe’s Economic and Monetary Union since the Five Presidents’ Report and calls on Member States to take further concrete steps.

In the four years since the publication of the report, marked progress has been made to strengthen the single currency area and make Europe’s Economic and Monetary Union more robust than ever. Many of the gaps revealed by the post-2007 economic, financial and social crisis have been addressed. Yet, important steps still need to be taken. The single currency and the coordination of economic policy-making are means to an end: more jobs, growth, investment, social fairness and macroeconomic stability for the members of the euro area as well as the EU as a whole. 

European Commission President Jean-Claude Juncker said: “This Commission has fought hard for the completion of the Economic and Monetary Union: a lot has been achieved but a lot remains to be done. This is about creating jobs, growth and social fairness for our citizens. It is about preserving the stability and resilience of our economies and it is about Europe’s capacity to take its future into its own hands.”

Ahead of the Euro Summit of 21 June, the Commission invites EU leaders:

To reach an agreement on the main features of the Budgetary Instrument for Convergence and Competitiveness with a view to supporting a swift adoption by the European Parliament and the Council. To agree on its size in the context of the Multiannual Financial Framework.

To finalise the changes to the Treaty establishing the European Stability Mechanism with a view to a swift ratification by the euro-area Member States, including an operational and effective common backstop, the provision of liquidity in resolution and active and effective precautionary instruments. To preserve a clear delineation of responsibilities between actors and the possibility to adjust the EU Single Rulebook for banks according to the Community method. To integrate the European Stability Mechanism into EU law over time.

To make a renewed effort to complete the Banking Union starting with political negotiations on the European Deposit Insurance Scheme.

To accelerate progress on the Capital Markets Union and step up work to strengthen the international role of the euro.

The Commission also reviews the main progress of recent years beyond the deliverables expected at the Euro Summit of June 2019 and maps out the way forward for the coming years.

Since the Euro Summit of December 2018, discussions have proceeded on the future Budgetary Instrument for Convergence and Competitiveness for the euro area, building on the Commission’s proposal for a Reform Support Programme; a compromise is within reach and should be taken forward with determination.

Discussions have also taken place on the reform of the European Stability Mechanism, in particular to provide for a backstop to the Single Resolution Fund in the form of a credit line. The backstop is expected to serve as a last resort to support effective and credible bank crises management within the Single Resolution Mechanism. It will be repaid via contributions from the European banking sector.

The completion of the Banking Union and Capital Markets Union (CMU) is also essential when it comes to bolstering the resilience and stability of the euro.

Significant progress has been made in further reducing risk in the Banking Union. The Commission’s latest progress report shows that the ratio of non-performing loans for all EU banks continues to decline and is down to 3.3% in the third-quarter of 2018, continuing its downward trajectory towards pre-crisis levels. Looking ahead, it is essential to progress with a common deposit insurance scheme for the euro area.

The CMU will foster further market integration and help ensure that Europe’s capital markets can withstand major internal or external challenges to the stability of the Economic and Monetary Union.

Encouraged by Leaders in December to continue its work on the file, the Commission also takes stock of the ongoing work towards developing the international use of the euro. The euro is twenty years young and is the world’s second currency, which remained strong even at the height of the financial and debt crisis. To understand better how to boost the global use of the euro – and to identify any obstacles to this – the Commission in recent months actively consulted market participants in different sectors (foreign exchange, energy, raw materials, agricultural commodities and transport).

These consultations showed that:

there is broad support for reducing dependence on a single dominant global currency;

the euro is the only currency with all of the necessary attributes that market participants seek to use as an alternative to the US dollar;

the energy sector will remain a key currency driver of use of the euro, with scope to further increase its use, such as in the gas sector;

there is recognition that the EU, through the euro, can reinforce its economic sovereignty and play a more important global role to benefit EU business and consumers.

The Commission, together with the European Central Bank, will continue to work with Member States, market participants and other stakeholders, and calls upon the European Parliament, the Council and all interested parties to support the efforts increase the international role of the euro.

Background

Almost exactly four years ago, President Jean-Claude Juncker, together with the President of the Euro Summit, Donald Tusk, the then-President of the Eurogroup, Jeroen Dijsselbloem, the President of the European Central Bank, Mario Draghi, and the then-President of the European Parliament, Martin Schulz, published an ambitious plan on how to deepen Europe’s Economic and Monetary Union (EMU) by latest 2025.

Building on the vision of the Five Presidents’ Report, the Commission followed up with the White Paper on the Future of Europe of March 2017, the thematic Reflection Papers on the Deepening of the Economic and Monetary Union and the Future of EU Finances in May 2017. In December 2017, the Juncker Commission set out a roadmap and adopted a number of concrete proposals with the overall aim of enhancing the unity, efficiency and democratic accountability of Europe’s Economic and Monetary Union by 2025.

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RescEU assets mobilised to help Greece fight devastating forest fires

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Following a request for assistance from Greece on 13 August 2019, rescEU assets have been mobilised to tackle forest fires ravaging several areas of Greece. As an immediate response, the European Union has already helped to mobilise 3 forest fighting planes from rescEU reserve from Italy and Spainto be dispatched swiftly to the affected regions.

rescEU is the EU’s strengthened EU Civil Protection Mechanism, whose reserve includes firefighting planes and helicopters. Through rescEU, the EU reinforces its collective ability to respond to disasters that affect European countries. This is the first ever deployment of the rescEU assets.

Commissioner for Humanitarian Aid and Crisis Management Christos Stylianides said: “The EU stands in full solidarity with Greece at this difficult time. The planes are already in action, fighting the fires. This immediate response proves the added value of rescEU which makes our response more robust, quick and efficient. Moreover, this is a real example of the common European values on which rescEU is based: solidarity and protection of lives of our European citizens. I am thankful to Italy and Spain for their offers of assistance. We stand ready to provide further assistance.”

Commissioner Stylianides is in constant communication with the Greek authorities. Today, the Commissioner is in Athens where he met with Prime Minister Kyriakos Mitsotakis and visited the Crisis Centre of the Greek Civil Protection to be briefed along with the Minister for the Protection of Citizens Michalis Chrysochoidis and oversee the operation of the rescEU assets.

The European satellite mapping system Copernicus is helping to provide damage assessment maps of the affected areas.

Background

The EU Civil Protection Mechanism strengthens cooperation between Member States/Participating States in the field of civil protection, with a view to improving prevention, preparedness and response to disasters. Through the Mechanism, the European Commission plays a key role in coordinating the response to disasters in Europe and beyond.

When the scale of an emergency overwhelms the response capabilities of a country, it can request assistance via the Mechanism. Once activated, the Mechanism coordinates assistance made available by its Member States/Participating States through spontaneous offers. In addition, the EU has created the European Civil Protection Pool to have a critical number of readily available civil protection capacities allowing for a stronger and coherent collective response. Should the emergency require additional, life-saving assistance, the new rescEU reserve can be used as a matter of last resort.

To date, all EU Member States participate in the Mechanism, as well as Iceland, Norway, Serbia, North Macedonia, Montenegro, and Turkey. Since its inception in 2001, the EU Civil Protection Mechanism has responded to more than 300 requests for assistance inside and outside the EU.

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EU mobilises €9 million to tackle the food crisis in Haiti

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The European Union has released €9 million in humanitarian aid in response to the deteriorating food and nutrition situation in Haiti. The humanitarian aid will cover the basic food and nutritional needs of more than 130,000 people living in the worst affected areas.

For the EU, the humanitarian situation in Haiti is not a forgotten crisis We are committed to providing vital support to the people hit by the food and nutrition crisis in the country. This assistance comes on top of the €12 million allocated in 2018 to address the urgent food and nutrition needs of Haitians,’ said Commissioner for Humanitarian Aid and Crisis Management, Christos Stylianides.

The funds provided will benefit families living in the areas worst affected by the crisis and children suffering from acute malnutrition. Life-saving nutritional support will also be provided to over 5,000 children under the age of 5 who are suffering from acute malnutrition. In parallel, the EU will back measures to strengthen the analysis of the food situation and to improve the quality of the humanitarian response.

The European Commission’s humanitarian assistance pays special attention to victims of forgotten crises, i.e. severe, protracted humanitarian crises where the people affected do not receive sufficient international aid, as is the case in Haiti. Haiti is the main beneficiary of the European Commission’s humanitarian aid to Latin America and the Caribbean, having received €404 million in support since 1994.

Background

Due to its vulnerability to natural hazards and its high levels of poverty, Haiti has limited capacity to cope with recurring emergencies such as earthquakes, hurricanes, and prolonged droughts.

In recent months, the humanitarian situation in Haiti has deteriorated dramatically and the country is facing serious food shortages. Between 2018 and 2019, the number of people in crisis situations or facing food emergencies doubled to 2.6 million, i.e. 25 % of the population. Furthermore, the prevalence of acute malnutrition among children under the age of five remains high, and above World Health Organization (WHO) emergency levels in several locations, including the Nord-Ouest department.

€3 million were earmarked at the end of July 2019 for disaster risk reduction.

In Haiti, particular emphasis is being placed on establishing an effective link between relief, rehabilitation and development (LRRD) to facilitate the transition between emergency relief work and structural development assistance in the country. More specifically, in terms of development cooperation, the amount of EU funding allocated to Haiti is the highest in the region, standing at €420 million for the period 2014-2020. These funds are intended to support development and the fight against poverty in the country by focusing on four key sectors: strengthening and modernising public administration, education, urban development and infrastructure, and food and nutrition security.

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Commission launches two projects to support cooperation and innovation in Romania

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The Commission is launching two projects to provide expertise to Romanian regions and cities, in cooperation with the Romanian government and the World Bank.

Under the first project, Commission and World Bank experts will help Romanian county capitals develop stronger links with their periphery and use EU funding for projects that benefit the whole urban area, not only the main economic centre. For example, experts will study how to expand urban transport networks or how to cooperate better in the field of public services to make them more accessible.

Under the second project, a group of experts will help the eight Romanian regions to improve their innovation capacity and enhance cooperation between research centres and businesses to develop innovative products for the market. This project is launched under the “Catching up Regions” initiative, which helps low-income and low-growth regions catch up with the rest of the EU.

Commissioner for Neighbourhood Policy & Enlargement Negotiations and Regional Policy, Johannes Hahn said: “Romania will benefit from significant resources to invest in sustainable urban development in the next-long term EU budget 2021-2027. The work of Commission and World Bank experts together with the Romanian authorities will help pave the way for the success of these investments. In parallel, we are providing tailored support to Romanian regions so they can capitalise on their assets, cooperate with each other and become more innovative.”

Better cooperation between Romanian county capitals and their periphery

The project will focus on helping cities develop joint projects in the following sectors: public transport, environment and circular economy, digitalisation, entrepreneurship and education. The aim is to provide better services to citizens, make more efficient use of public funding and make sure positive spillovers reach surrounding, smaller towns as well.

Concretely, Commission and World Bank experts will help Romanian cities identify sectors with great potential for inter-municipal cooperation, help them design joint project, make the best use of EU funding and set the right administrative conditions for a lasting cooperation between partners.

The project is financed with €500,000 from the European Regional Development Fund. By the end of this year, the experts will issue a report with specific recommendations that should help Romania with the planning of several billion euros earmarked for urban investments and regional innovation in the next long-term EU budget 2021-2027.

More innovative regions

Romanian regions will receive tailored Commission and World Bank expertise in order to better commercialise research projects, build capacity for technology transfer, create jobs in research and innovation (R&I) and promote innovation in local small and medium businesses. The experts will help the regions to:

  • support selected, high-potential research teams in the North East and North West regions and help them bring their innovative ideas to the market;
  • facilitate the transfer and dissemination of knowledge and new technology between research organisations and businesses;
  • promote public-private cooperation, helping public research organisations from the North East and North West regions to increase and improve R&I services provided to companies;
  • help entrepreneurs from all Romanian regions test and improve the commercial viability of their prototypes, in view of creating a robust pipeline of projects ready to receive European and national funding in the future.

The project will be carried out until end 2020, with a budget of €2 million from the European Regional Development Fund. €110 million of funding is still available under the 2014-2020 Regional Operational Programme to support research activities linked to smart specialisation and technology transfer.

Background

The Catching up Regions initiative has been launched by the Commission to study what holds back growth and investment in low-income and low-growth regions in the EU and how EU funds can be best used to address these challenges.

In 2016, a pilot phase was launched in the Romanian North East and North West regions with the help of the Joint Research Centre with the aim to develop, update and refine their smart specialisation strategies, i.e. regional industrial and innovation strategies based on local competitive strengths, resulting in a set or projects that are currently being financed.

These projects will contribute to the design of the new Cohesion Policy programmes. For 2021-2027, the Commission proposed a total allocation of more than €30.8 billion in Cohesion Policy funding for Romania, €6.1 billion more than in the current period.

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