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29 June 2012

Statement by President Barroso at the end of the euro area summit

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"Today a fundamental decision was taken by the euro area to have a single banking supervisory mechanism for the euro area. The Commission will make appropriate proposals as a matter of urgency", said President Barroso at the end of the first day of the European Council.

Full statement:

The President of the European Council presented in a very detailed way our decisions. I will not repeat of course its comments. Let me just underline that this is indeed a very important set of conclusions because it shows substantial commitment to further action. As you know before this European Council and this euro area summit we mentioned that it would be important to have decisions on growth and we have taken these decisions today but also decisions for the future of the European Economic and Monetary Union and if possible also the possibility of some short-term stabilisation measures. And we have indeed achieved that. Because not only the leaders of the European Union Member States have generally agreed to pursue the work that has been prepared by the President of the European Council together with me, the President of the Eurogroup and the President of the ECB in terms of the genuine EMU but already today a fundamental decision was taken by the euro area. And this decision is no more than to have a single supervisory mechanism for the euro area. In fact one of the points that was highlighted in that report: the need to have an integrated supervision for the euro area and in fact the Commission will make appropriate proposals as a matter of urgency. We'll deliver swiftly a proposal for a supervisory mechanism for the euro area in accordance with Article 127(6). Of course this means that the ECB will be fully able to play its part in this euro area financial supervision. But not only we have taken this very important decision on the euro area level but also there are other measures that are now possible in terms of short-term stabilisation for some countries that are now feeling special pressure and there is concrete reference here to the case of Spain. A Memorandum of Understanding that we hope that will be now concluded as a matter of urgency for the financial support for the recapitalisation of the Spanish banking sector with an important decision that is that when the ESM becomes available, this financial assistance that is now going to be provided by the EFSF will be transferred to the ESM, without gaining seniority status. This was in fact one of the main points in terms of market confidence in this operation and also some other decisions that are possible for other countries that are fully complying with the country specific recommendations and also the European Semester, the Stability and Growth Pact and the Macro-economic Imbalances Procedure.

All this of course under conditionality. And the conditionality is highlighted in all the elements namely when we'll have this European supervision reinforced it is stated that it will rely on appropriate conditionality, including by the way, formalised in case of action through a Memorandum of Understanding. So if there is the need for a direct recapitalisation of banks. So it means that not in the distant future direct recapitalisation of banks will be possible under very strict conditions. And also in the other process this conditions have to be applied. So I think these are quite ambitious decisions and that shows once again the commitment of the Member States, namely those in the euro area, to the irreversibility of the euro and I think this will be recognised by all. Thank you.

© European Commission

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