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"We must be realistic in what we can expect from one single summit of European leaders. But I believe this European Council can – and indeed must – give strong impetus to our growth agenda, through concrete measures to stimulate the economic activity, while also setting out a longer-term process to build a stronger, genuine Economic and Monetary Union.
We expect Member States to agree to a "comprehensive package" of growth measures. These are significant measures that the Commission has been proposing over the last year and that will be backed by Europe's Heads of State and Government, for example the increase on the EIB lending capacity, project bonds and a more targeted use of the EU structural and cohesion funds.
In addition, Member States should endorse, in full, the Country Specific Recommendations that the Commission set out on 30 May. These reforms are about changing head-on practices that impede our competitiveness and stop our markets working as they should.
The measures in this growth compact are major decisions that will tackle the roots of Europe's problems, while at the same time oiling the wheels of the economy through targeted investment to get the economy moving again. Indeed, to complement the crucial reform effort, we must invest in projects and in areas where money is badly needed to spur growth. And the Multiannual Financial Framework (MFF), the European budget, should be seen as part of our investment in growth.
For a genuine Economic and Monetary Union to be established, I think that we need a banking union, a fiscal union and further steps towards a political union.
The first of these building blocks that can be achieved quickly without Treaty change is an integrated financial framework, a "banking union". The Commission has already put forward proposals on capital requirements as well as on deposit guarantee schemes and common bank resolution tools including mutual lending between national funds. These proposals should be decided on by the end of this year. We intend to present further proposals in the coming months on a common European supervisor and a common deposit insurance and resolution scheme, including common funds paid for primarily by those banks that are overseen by the common European supervisor.
The second building block is to develop an integrated budgetary framework, a "fiscal union". The crisis has again highlighted the spillover effects of our budgetary and fiscal policies. In a more integrated economic and monetary union, sound fiscal positions will not be optional, they will be non-negotiable. We propose to look at further steps that may require changes to the Treaty. Let me tell you here that fiscal union is about much more than just eurobonds or stability bonds. It also means more coordination in taxation policy and a much stronger European approach to budgetary matters at national and European level.