The October Package on Economic Governance Steven Engels 26/10/2015

The Roadmap towards completing EMU Economic Union Financial Union Fiscal Union Legitimac y Boost convergence, jobs and growth Complete banking and capital markets union A new advisory Fiscal Board at EU- level Strengthen accountability Formalise convergence process Set up Euro Area Treasury Ensure macro- economic stabilisation Stage 1Stage 2 The Roadmap towards complete EMU 2017

3 The October package: 5 key texts Communication on steps to completing EMU Commission decision establishing a European Fiscal Board Recommendation for a Council Recommendation to establish National Competitiveness Boards Communication and Proposal for a Council decision on progressively establishing unified representation of the EA in the IMF

Stage 1: Deepening by Doing 4 Economic Union Financial Union Fiscal Union Political Union I. A revamped European Semester II. A strengthened Economic Governance III. A consolidated External Representation of the EMU IV. A complete Banking and Capital Markets Union

Stage 1: Deepening by Doing 5 Economic Union Financial Union Fiscal Union Political Union I. A revamped European Semester II. A strengthened Economic Governance III. A consolidated External Representation of the EMU IV. A complete Banking and Capital Markets Union

6 I. The Revamped European Semester Builds on last year's streamlining exercise Foregrounds the common Euro-area dimension of the coordination exercises Increases the focus on employment and social performance Promotes convergence by benchmarking and exchange of best practices Increases involvement of the EP and national parliaments

7 Last year's streamlining exercise Increased focus on a limited number of priorities for reform More room for in-depth dialogue  More integrated country analysis published 3 months earlier than before  Proposals for recommendations published 2 weeks earlier than before More outreach at the political level and deeper discussion with national authorities, parliaments and social partners

Autumn Forecast Winter Forecast Spring Forecast 15 October May/JuneNovember EA MS: Draft Budgetary Plans Opinion on DBP Communication on action taken in EDP AGS+ 15 April Better integration of EA and national dimensions NRP Decisions in SGP SP Fiscal surveillance Macro-economic surveillance EU2020 strategy CSR 8 Country Profile February Recommendation to EA

Increased involvement of the EP and the national parliaments

10 More focus on employment and social performance New indicators added to the MIP scoreboard Activity rate Youth unemployment Long-term unemployment Social impact assessments for stability support programmes At Member States' level: Stronger involvement of social partners in elaboration of NRP Strengthened dialogue between national social partners and Commission Pillar of social rights and common benchmarks

11 Benchmarking and mutual learning Enhancing ownership and support upward convergence Two criteria: o Closely related to policy instruments o Demonstrated contribution to higher level objectives o Need to complement with country-specific economic analysis Cf. on-going benchmarking exercise in the Eurogroup

Stage 1: Deepening by Doing 12 Economic Union Financial Union Fiscal Union Political Union I. A revamped European Semester II. A strengthened Economic Governance III. A consolidated External Representation of the EMU IV. A complete Banking and Capital Markets Union

13 II. The strengthened Economic Governance Increases transparency of fiscal rules Clarifies the application of the Macro-economic Imbalances Procedure by the Commission Establishes an Advisory European Fiscal Board Recommends setting up National Competitiveness Boards

14 Increased transparency of fiscal rules More guidance and information sharing Clarify the relation between MTO and debt reduction rule Streamline methodology for assessing compliance with SGP Explore the possibility of updating multi-year Council recommendations

15 The macro-economic imbalances procedure More focus on Euro Area dimension of the MIP More explicit link between observed imbalances and CSRs Stable set of categories with clear justification Symmetrical application

16 An independent European Fiscal Board Commission Decision Advise the Commission on The implementation of the Union Fiscal Framework The appropriate prospective fiscal stance for the EA Ad-hoc matters Facilitate common understanding between National Fiscal Councils Administratively attached to Secretariat-General Functionally independent As of 1/11/2015

17 System of National Competitiveness Boards Commission proposal for a Council Recommendation Objectives: Strengthening national ownership of reform agendas by raising independent policy expertise at national level; Reinforcing policy dialogue between EU level and MS Competitiveness = comprehensive notion Independent, unbiased & transparent Inform but do not interfere with wage bargaining practices (art. 152 TFEU and art. 28 of Charter of Fundamental Rights). Commission coordinates

Stage 1: Deepening by Doing 18 Economic Union Financial Union Fiscal Union Political Union I. A revamped European Semester II. A strengthened Economic Governance III. A consolidated External Representation of the EMU IV. A complete Banking and Capital Markets Union

19 Consolidated external representation Roadmap Communication and Proposal for a Council Decision Article 138 TFEU End goal = Unified representation of EA in IMF by 2025 i.e. EA President presents the views of the EA in the Board of Governors EA President represents EA in IMFC Director of EA constituency represents EA in Executive Board Transitional arrangements Observer Status for EA in the IMF Executive Board EA President to address the IMFC Work towards EA only constituencies

Stage 1: Deepening by Doing 20 Economic Union Financial Union Fiscal Union Political Union I. A revamped European Semester II. A strengthened Economic Governance III. A consolidated External Representation of the EMU IV. A complete Banking and Capital Markets Union

21 Completing Banking and Capital Markets Union Fully implement agreed legal provisions Bank Recovery and Resolution Directive Deposit Guarantee Directive Bridge financing and backstop for Single Resolution Fund Legislative proposal on European Deposit Guarantee Scheme - > later this year

22 Immediate Next Steps Transposition BRRD and SDG Directive - > on-going Commission Decision on Fiscal Board -> 1/11/2015 Other legislative proposals in October Package - > Council and Eurogroup discussions beginning of November + European Council in December (EFC – EPC 29/11) Launch of the 2016 European Semester - > Mid November Proposal on European Deposit Insurance - > later this year

23 Preparing for Stage 2 Broad consultation on Completing EMU -> 2016 Expert Group to explore the legal, economic and political preconditions for the longer-term proposals - > mid 2016 Commission White Paper - > Spring 2017