First, the member states and the euro area member states in particular are all pursuing intensified fiscal consolidation and growth-enhancing structural reforms with very strong determination. This is particularly crucial in countries under the markets' spotlight, where the full implementation of the announced measures of consolidation is now of paramount importance to restore confidence.
Second, both the Council and the Parliament are delivering on the commitment to conclude the Commission's legislative package on economic governance by this summer. Reinforced economic governance is the cornerstone of our comprehensive response.
Third, the permanent European Stability Mechanism will be made functional as of June 2013, with the effective lending capacity of €500 bn. By the time of this decision, we will have in place a financial backstop with a sufficient containment effect to clear away even the slightest doubt about our capacity to act even in the most stressed scenarios.
As explained by President Barroso, the role of the Commission in the running of operations of the ESM will be central, and the link of the ESM with the EU institutions, of course including the European Parliament, will be clearly established.
The EC will in due course propose a regulation based on Article 136 of the Treaty, clarifying the steps to define policy conditionality and to ensure consistency with the EU framework of country surveillance.
Last but not least, the banking sector repair must be completed to safeguard the provision of credit to the real economy, to enterprises and to households. The next round of bank stress tests will be conducted in the coming months. The results will guide the necessary restructuring and possible recapitalisation of the EU banking sector. Before the publication of the results, the Member States will need to decide and present their strategies for the possible restructuring and recapitalisation of their vulnerable institutions. Such plans should be ready as soon as possible.
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