European Council Conclusions - 28/29 June 2012

29 June 2012

"We are determined to take the measures required to ensure a financially stable, competitive and prosperous Europe, and thus enhance the welfare of citizens", states the report.

During the last two and a half years, the European Union has taken important and far-reaching steps to overcome the crisis and improve the governance of the EMU. However, Europe is once again going through a period of heightened tensions. The crisis surrounding sovereign debt and the weakness of the financial sector, together with persistent low growth and macro-economic imbalances, are slowing down economic recovery and creating risks for the stability of EMU. This is having a negative impact in terms of unemployment and may weigh down Europe's potential to benefit from a gradual improvement of the global economic outlook.

We are therefore committed to taking resolute action to address financial market tensions, restore confidence and revive growth. We reaffirm our commitment to preserve the EMU and put it on a more solid basis for the future. Strong, smart, sustainable and inclusive growth, based on sound public finances, structural reforms and investment to boost competitiveness, remains our key priority.

This is why today the Heads of State or Government decided on a "Compact for Growth and Jobs", encompassing action to be taken by the Member States and the European Union with the aim of relaunching growth, investment and employment as well as making Europe more competitive. We also endorsed the country-specific recommendations to guide Member States' policies and budgets.

Finally we emphasised the role that the forthcoming Multiannual Financial Framework should play in strengthening growth and employment. The President of the European Council presented the report "Towards a Genuine Economic and Monetary Union".

We are determined to take the measures required to ensure a financially stable, competitive and prosperous Europe and thus enhance the welfare of citizens.

I. GROWTH, INVESTMENT AND JOBS

1. The European Union will continue to do everything necessary to put Europe back on the path of smart, sustainable and inclusive growth. Recalling the importance of fiscal consolidation, structural reform and targeted investment for sustainable growth, the Heads of State or Government decided on a "Compact for Growth and Jobs", providing a coherent framework for action at national, EU and euro area levels, using all possible levers, instruments and policies (see annex - from p7).

They invited the Council to rapidly examine how to improve cooperation between the institutions in order to ensure the timely implementation of the provisions of this Compact requiring EU legislation. 

2. The European Council generally endorsed the country-specific recommendations which Member States will translate into their forthcoming national decisions on budgets, structural reforms and employment policies, thus bringing the 2012 European Semester to a close.

II. REPORT ON EMU

4. The report "Towards a Genuine Economic and Monetary Union" presented by the President of the European Council, in cooperation with the Presidents of the Commission, Eurogroup and ECB, sets out "four essential building blocks" for the future EMU: an integrated financial framework, an integrated budgetary framework, an integrated economic policy framework and strengthened democratic legitimacy and accountability.  

Following an open exchange of views, where various opinions were expressed, the President of the European Council was invited to develop, in close collaboration with the President of the Commission, the President of the Eurogroup and the President of the ECB, a specific and time-bound road map for the achievement of a genuine Economic and Monetary Union, which will include concrete proposals on preserving the unity and integrity of the Single Market in financial services and which will take account of the Euro Area statement and, inter alia, of the intention of the Commission to bring forward proposals under Article 127. 

They will examine what can be done within the current Treaties and which measures would require Treaty change. In order to ensure their ownership, Member States will be closely associated to the reflections and regularly consulted. There will also be consultations with the European Parliament. An interim report will be presented in October 2012 and a final report before the end of the year. 

III. MULTIANNUAL FINANCIAL FRAMEWORK

IV. OTHER ITEMS

(a) The European Council welcomed the statement of the Euro Area Summit of 29 June 2012 and the use of the existing EFSF/ESM instruments that will be implemented according to existing guidelines which detail the relevant procedures.

 
Excerpts from ANNEX:
 
(c) Further efforts are needed to reduce the overall regulatory burden at EU and national level. The Commission will present a communication on further steps in "smart regulation", including measures to support micro-enterprises, by the end of 2012.  
 
(h) It is crucial to boost the financing of the economy. €120 billion (equivalent to around 1 per cent of EU GNI) are being mobilised for fast-acting growth measures:
  • The EIB's paid-in capital should be increased by €10 billion, with the aim of strengthening its capital basis as well as increasing its overall lending capacity by €60 billion, and thus unlock up to €180 billion of additional investment, spread across the whole European Union, including in the most vulnerable countries. This decision should be taken by the EIB Board of Governors so as to ensure that it enters into force no later than 31 December, 2012.
  • The Project Bond pilot phase should immediately be launched, bringing additional investments of up to €4.5 billion for pilot projects in key transport, energy and broadband infrastructure. Provided that the interim report and evaluation ofthe pilot phase are positive, the volume of such financial instruments could be developed further in all countries in the future, including in support to the Connecting Europe Facility. 
  • Where appropriate, and respecting de-commitment rules, Member States have the possibility under existing rules and practices to work with the Commission in using part of their Structural Funds allocation to share the EIB loan risk and provide loan guarantees for knowledge and skills, resource efficiency, strategic infrastructure and access to finance for SMEs. The Structural Funds have reallocated funds in support of research and innovation, SMEs and youth employment and a further €55 billion will be devoted to growth enhancing measures in the current period. Support to SMEs should be further strengthened,including by ensuring their easier access to EU funds. 
    Member States also have the possibility to consider reallocations within their national envelopes, under existing rules and in cooperation with the Commission.
  • The action of the European Investment Fund should be developed, particularly as regards its venture capital activity, in liaison with existing national structures. 
(n) Financial stability is a prerequisite for growth. The report "Towards a genuine Economic and Monetary Union" sketches out important ideas in that respect. There are areas where the Member States sharing a single currency, and others willing to join the effort, want to go further in their efforts to coordinate and integrate their financial, fiscal and economic policies within the European Union framework, fully respecting the integrity of the Single Market and of the European Union as a whole.  
 
Full Conclusions

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