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The European Council agreed to establish in the first half of next year an operational framework, including the definition of legacy assets, so that when the SSM is effectively established, the European Stability Mechanism will have the possibility to recapitalise banks directly, following a regular decision.
For the SSM to be more effective, we decided, on the basis of the report of the four presidents, that when the SSM is in place, "a single resolution mechanism will be required, with the necessary powers to ensure that any bank in participating Member States can be resolved with the appropriate tools". In the course of 2013, the Commission will submit a proposal, which should be examined as a matter of priority, with the intention of adopting it in the current parliamentary cycle. The objective is to reduce risks for taxpayers and for the economy, by making sure that any bank failures are dealt with in a swift and orderly way and ultimately financed by the financial sector itself. It will be another major step forward.
This brings me, after the progress on the banking union, to the second area on which we focused: bringing the economic policies of eurozone countries closer together. The starting point is simple: economic policies are a matter of common interest, and a vital interest for countries that share a common currency. We can't have one currency and 17 diverging policies. Some of our Member States were badly governed for years and hesitated far too long to act.
So, as President of the European Council, I will present possible measures and a timebound road map on four issues to the June 2013 European Council, in close cooperation with the President of the European Commission, and, of course, a process of consultations.
These four issues are:
All this is not an end in itself: our overarching aim is a stable EMU, in order to improve growth, competitiveness and employment across Europe. We can only survive in the global economy if we are competitive. Ultimately, it is the performance of the real economy that will guarantee a stable euro -- many who focus just on financial instruments forget this.
And we all agree that in this process we must ensure that democratic legitimacy and accountability are fully promoted at the level at which decisions are taken and implemented. The views of the European Parliament on this matter are of course of major relevance here.
All in all, it is clear that, even if the worst of the crisis -- in terms of a threat to the very existence of the euro -- is behind us, much still needs to be done. But the hard work that has been done already is starting to pay off. The sharp decrease in the famous 'spreads' is an encouraging signal. Confidence in the currency is a precondition for a return of confidence of consumers and companies. Of course, this takes time, and the impact on jobs even more so. But stability is indispensible for recovery.
In conclusion, van Rompuy said: "This was a positive week for the Union, whilst remaining fully aware of the social and economic problems we still face. Everything that we undertake has, as its ultimate aim, to overcome recession and unemployment. There are more reasons to be more hopeful than a few weeks ago, but there is a long way to go, in the Union, in the eurozone and in our Member States."