"The current report is key to ensuring a level playing field between euro and non-euro Member States when it comes to the provision of financial assistance", said Danuta Hübner, (EPP, PL) the leading MEP on the dossier.
During the financial crisis, European policymakers created the European Financial Stability Facility (EFSF), followed by the recently ratified European Stability Mechanism (ESM). Both facilities apply only to euro area Member States. While the EFSF and ESM have established new precautionary instruments for financial assistance, the existing regulation on financial assistance to non-euro Member States has not kept pace with these financial assistance facilities.
The revision of the existing regulation, under the current Balance of Payment (BoP) proposal of the Commission, will allow non-euro Member States to have similar financial instruments at their disposal, including precautionary and enhanced conditions for credit lines.
This report was tabled because Parliament can only approve or reject the final BoP proposal and has no possibility to make amendments to its substance, since the proposal falls under the scope of an assent procedure. Parliament can thus merely give an opinion and is not a co-decision-maker in the process. It is important that Parliament’s position is outlined in a transparent manner in the interests of basic democratic legitimacy.
Some of the highlights of the report adopted today include:
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the addition of a number of elements from the two-pack (an economic governance package which only applies to the euro area), meant to ensure a level playing field between euro and non-euro Member States;
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a proposal for an indirect bank recapitalisation instrument for non-euro Member States, particularly in the light of the potential participation of these Member States in the upcoming single supervisory mechanism and of the need to provide them with a fiscal backstop;
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the suggestion that the
ESM treaty could be changed in the future and non-euro members, participating in the single supervisory mechanism, would be allowed to benefit from the bank recapitalisation tool of the Mechanism. In that case, the Member States would make a capital contribution specifically to the bank recapitalisation instrument of the ESM;
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the idea of setting up an
ESM subsidiary to be used for direct recapitalisation, which would limit the negative impact that buying bank equity could have on the Mechanism's credit rating and lending capacity, could be explored further, with a view to also encompassing non-euro Member States;
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the idea of transfering the outstanding funding capacity in the EFSM (European Financial Stabilisation Mechanism), worth approximately €10 billion to the BoP facility, once the EFSM is discontinued. This would increase the BoP's firepower from €50 billion to €60 billion.
Next Steps
The report gained a large majority in ECON. A plenary vote is expected in April.
Press release
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