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23 October 2011

EU Summit: No agreement reached to extend the EFSF

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The EU Council stressed that strengthening financial regulation remains a key priority at the EU and the global level. The Council welcomed the agreement reached on short selling and calls for the speedy adoption of EMIR and the deposit guarantee schemes by the end of this year.

1. In the light of the Commission's report on growth-enhancing areas and further to the outcome of the political conference on the sources of growth held on 6 October 2011, the European Council identified a limited number of key priorities for internal economic policy that need to be pursued in the short term in order to achieve smart, sustainable and inclusive and green growth:

  • The Single Market has a key role to play in delivering growth and employment. All efforts should be made to ensure agreement by the end of 2012 on the 12 priority proposals set out in the Single Market Act, giving utmost priority to those which can bring the most benefits to growth and jobs. The full implementation of the Services Directive will also deliver significant economic gains; Member States should complete its implementation by the end of this year and ensure that the points of single contact are fully operational and that economic operators are fully informed of the new opportunities it offers. The Commission will report on this issue by the end of 2011.
  • The European Council invites the Commission to rapidly present the roadmap on the completion of the Digital Single Market by 2015, giving priority to proposals aimed at promoting a fully integrated Digital Single Market through the facilitation of ecommerce and the cross-border use of online services. Particular attention should be paid to ensuring rapid progress in achieving the broadband coverage objectives set out in the Digital Agenda, facilitating secure electronic identification and authentication and modernising Europe's copyright regime with a view to ensure the EU’s competitive edge and unleash possibilities for new business models, while ensuring a high level of protection of intellectual property rights and taking into account cultural diversity. The European Council calls for rapid agreement on the Radio Spectrum Policy programme.
  • Momentum should be maintained in implementing the 2007 Action Programme for the reduction of administrative burden in order to meet the objective of a 25 per cent reduction by 2012; more rapid progress should be made regarding annual accounts, company law, taxation and customs. The European Council calls for the rapid adoption of the simplification proposals pending before Council and Parliament. The Commission is invited to concentrate efforts further to reduce the overall regulatory burden, in particular for SMEs, including by proposing concrete working methods within the context of the Smart Regulation agenda. It has committed to assess the impact of future regulations on micro-enterprises and to screen the acquis to identify existing obligations from which micro-enterprises could be excluded. The European Council looks forward to the Commission's forthcoming report in order to return to these issues at its December 2011 meeting.
  • Member States will ensure that the country-specific recommendations are fully reflected in national decisions as regards budgetary policy and structural reforms, given their crucial importance for ensuring sustainable public finances and creating jobs and growth. In support of this, the European Council calls for steps to be taken by the Council, working with the Commission, to ensure that all actions at the European Union level fully support economic growth and job creation.

2. Energy, including energy efficiency, as well as research and innovation, are key areas for the promotion of growth. The European Council will track progress made in those areas in December 2011 and in March 2012 respectively, further to the concrete orientations set in February 2011. It calls for the swift implementation of those measures which will have a direct impact on growth.

3. Since the crisis has increased pressure on national budgets, it is important to optimise the use of available resources, in particular in countries implementing an adjustment programme. The European Council calls for the adoption before the end of the year of the proposals to increase temporarily cofinancing rates for EU funds, accompanied by a targeting of those funds on growth, competitiveness and employment. The EIB is invited to examine in close cooperation with the Commission the possibilities of further contributing to boosting investment in Europe, including for countries implementing an adjustment programme.

4. The European Union now has more powerful tools to enhance its economic governance and to ensure that the required measures are taken to pull Europe out of the crisis: the Europe 2020 strategy continues to guide the Union and the Member States in promoting the delivery of growth-enhancing structural reforms; the European semester will help ensure that they remain on track in implementing these reforms in a coordinated manner; and the Euro Plus Pact will achieve a new quality of economic policy coordination amongst the participating Member States. The package of six legislative acts on economic governance agreed last month will allow a much higher degree of surveillance and coordination, necessary to ensure sustainable public finances and avoid the accumulation of excessive imbalances. The European Council emphasises its determination to implement this new framework in order to ensure that it is fully and effectively applied. In this context, it welcomes the intention of the Commission to strengthen, in the Commission, the role of the competent Commissioner for closer monitoring and additional enforcement.

5. The next European semester should be as ambitious as possible and draw fully on the lessons of the past. The European Council welcomes the Commission's intention to bring forward its Annual Growth Survey to December 2011, which will allow the Council to prepare thoroughly the Spring 2012 European Council. Heads of State or Government will return to some themes of the Euro Plus Pact in December 2011; they will also be informed of progress made in structured discussions on tax policy coordination issues. Legislative work on the Commission proposals for a common consolidated corporate tax base is ongoing. The European Council takes note of the Commission proposal for a financial transaction tax.

6. Strengthening financial regulation remains a key priority at the EU and the global level. Much has been achieved since 2008 with the reform of regulatory and supervisory framework, but efforts need to be maintained to address the weaknesses of the financial system and prevent future crises. The European Council welcomes the agreement reached on short selling and calls for the speedy adoption of other important legislative proposals such as those relating to OTC derivatives and deposit guarantee schemes by the end of this year, and the ones on capital requirements by summer 2012. It welcomes the proposals on markets in financial instruments and market abuse, and looks forward to the proposals the Commission will make on credit rating agencies and bank crisis management and resolution.

The European Council welcomes progress made by the Council (ECOFIN) on measures for the banking sector and invites the Council to finalise this work at its meeting of 26 October. These measures will be an essential component of a broader package whose other elements will be agreed by the Euro Summit of 26 October.

7. The President informed the European Council on the state of preparations regarding the Euro Summit of 23 and 26 October. The European Council agreed on the need for coherence of the activities of the euro area and the European Union, in full respect of the integrity of the European Union as a whole and its operation at 27. In this context, the European Commission has the responsibility to ensure compliance by all 27 Member States with EU legislation, including that relating to the internal market, and to safeguard a level playing field among all Member States including those not participating in the euro. The President of the Euro Summit will be designated by the Heads of State or Government of the euro area at the same time the European Council elects its President and for the same term of office. Pending the next such election, the current President of the European Council will chair the Euro Summit meetings. The President of the Euro Summit will keep the non euro area Member States closely informed of the preparation and outcome of the Summits. The European Council notes the intention of the Heads of State or Government of the euro area to reflect on further strengthening of economic convergence within the euro area, on improving fiscal discipline and deepening economic union, including exploring the possibility of limited Treaty changes.

The European Council recalls that any Treaty change must be decided by the 27 Member States. The European Council will revert to the issue in December on the basis of a report by the President of the European Council in close collaboration with the President of the Commission and the President of the Eurogroup.

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