Europaudvalget 2010-11 (1. samling), Det Udenrigspolitiske Nævn 2010-11 (1. samling)
EUU Alm.del Bilag 39, UPN Alm.del Bilag 9
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E U COUNCILSE CRE TARIAT"WHY THE TASK FORCE PROPOSALS WILL MAKETHE EUROPEAN ECONOMIES MORE CRISIS PROOF"FACTSHEETON THE SURVEILLANCE PROCEDURES IN THE EUBrussels, 21 October 2010
The Task Force delivered a set of recommendations in five areas aiming at:1) reinforcing fiscal discipline, notably through a stronger Stability and Growth Pact (SGP)2) broadening economic surveillance to encompass macro imbalances andcompetitiveness3) deepening and broadening policy coordination4) a robust framework for crisis management5) strengthening institutions for more effective economic governanceThe recommendations under the SGP, and in particular the enforcement measuresproposed, have received particular attention. The table below compares the current ruleswith the Task Force recommendations for budgetary and macroeconomic surveillance. Itreflects in a simplified manner the changes proposed.In a nutshell, the new enforcement measures will apply earlier-- starting already in thepreventive phase of the SGP-- will be more progressive and will be decided by reversequalified majority.
Remarks by President Van Rompuy following the last meeting of the Task Force oneconomic governanceReport of the Task Force on economic governance to the European Council
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Current rulesRecommendation by the Task ForceSanctions under the preventive arm of the SGPIn case of deviation from the adjustment path:In case of deviation from the adjustment path:••Early warning by the CommissionCouncil may address a recommendationsetting a deadline for correcting thedeviation. The recommendation may bemade public.••Early warning by the CommissionCouncil recommendation (within one month)setting a deadline for correcting thedeviation. The recommendation may bemade public.Interest-bearing depositapplies if noappropriate action is taken within amaximum of five months (three months inserious cases).
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Sanctions under the corrective arm of the SGPWhen Member States are placed in ExcessiveWhen Member States are placed in EDP, twoDeficit Procedure (EDP), a deadline of 6possibilities:months is given to take effective action tocorrect the situation (article 126.6)•Non-interest bearing depositwill beapplied immediately for Member States thathave already been subject to financialsanctions under the preventive arm.•For those Member States that have notbeen sanctioned under the preventive arm,the Council will adopt a recommendationsetting a deadline for effective action.However, in case of particularlyseriousslippages, sanctions could be appliedimmediately.
When warranted by the situation, the stepsunder the EDP should be accelerated (e.g. 3months rather than 6 for effective action)If no effective action has been taken within thegiven deadline, the Council may make itsrecommendation public (article 126.8). It mayalso give notice to the Member State concernedto take measures to reduce the deficit (article126.9).If the Member State persists in failing to complywith the Council recommendations, the Councilmay applysanctions(article 126.11)If no effective action is taken within the givendeadline, Member States will be subject to afine.
If a Member State persists in failing to put intopractice the Council recommendation,the finewill be increased, including a variablecomponent related to the level of the deficit.
Decision makingAll decisions are taken by the Council, on theDecisions foreseen in the Treaty are taken onbasis of Commission recommendations, underthe basis of current voting rules. All decisionsanormal qualified majority rule.on the new sanction regime based on article136 of the Treaty will be taken on the basis ofreversed qualified majority rule.
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Current rules
Recommendation by the Task ForceMacroeconomic surveillanceAn alert mechanism based on a scoreboardcovering a number of indicators and economicanalysis for monitoring and assessment ofmacroeconomic imbalances and vulnerabilities.Implementation of an enforcement frameworkwith a corrective phase.
In case the policies of a Member State are notin line with the broad economic policyguidelines, or may threaten the properfunctioning of EMU:•Early warning by the CommissionCouncil may address a recommendation settinga deadline for correcting the deviation. Therecommendation may be made public.(No agreed indicators to base the assessment)
In case the policies of a Member State are notin line with the broad economic policyguidelines, or may threaten the properfunctioning of EMU:••Early warning by the CommissionIn case of particularly serious imbalances,the Council will place the country in"excessive imbalance position" with arecommendation to correct the imbalancesIncreased reporting and monitoringFor euro area Member States, sanctions willbe applied in case of repeated non-compliance
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