13 November 2012

ECOFIN: Main results of the Council - Economic Governance, Second Package

Follow-up to the October European Council

The Council took stock briefly of the follow-up to the European Council's meeting on 18 and 19 October. It took note of the work undertaken by the President of the European Council in relation to the further development of the EU's economic and monetary union, for which a timetable and report will be presented in December (see conclusions: EUCO 156/12, esp paras 13-17).

Economic governance - Second package

The Council adjusted its position in negotiations with the European Parliament on two draft regulations aimed at further improving economic governance in the euro area. The objective is to facilitate rapid agreement with the Parliament, so as to enable the regulations to be adopted in first reading before the end of the year, in line with the October European Council's conclusions.

This second "two-pack" of proposals includes:

• a regulation for enhanced monitoring and assessment of draft budgetary plans of euro area Member States, especially those subject to an excessive deficit procedure;
• a regulation on enhanced surveillance of euro area member states that are experiencing severe financial disturbance or request financial assistance.

The proposals were presented by the Commission in November 2011, following adoption of a first, so-called "six-pack" of economic governance measures.

The two draft regulations introduce provisions for enhanced monitoring of countries' budgetary policies. Member States would be required to submit annually to the Council and the Commission their draft budgetary plans for the next year by 15 October. Closer monitoring would apply to Member States in excessive deficit procedure in order to enable the Commission to better assess whether a risk of non-compliance with the deadline to correct the excessive deficit exists. Member States experiencing severe difficulties with regard to their financial stability or receiving financial assistance on a precautionary basis would be subject to even tighter monitoring than Member States in excessive deficit procedure.

The Council agreed a general approach on the proposals in February. The Parliament established its negotiating position on 4 July, introducing significant changes to the texts. Negotiations between Council and Parliament started on 11 July, and seven trilogues have been held since. Progress has been achieved on the regulation on enhanced surveillance, while negotiations on the regulation concerning assessment of draft budgets have so far proved more difficult.

Based on article 136 of the Treaty on the Functioning of the European Union, the regulations require a qualified majority of the 17 Member States of the eurozone for adoption by the Council, in agreement with the Parliament.

Full Council Conclusions

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