FIU, Alm.del - 2018-19 (1. samling) - Bilag 137: Fællesbrev om eurozonebudgetinstrument, fra finansministeren

Finansudvalget 2018-19 (1. samling)
FIU Alm.del Bilag 137
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Joint Language on Ownership and Financing of BICC

In December, the Euro Summit agreed on a set of comprehensive reforms to pave the way for a

strengthened EMU. Leaders endorsed a term sheet to strengthen the ESM and a terms of reference

that sets out how the backstop to the Single Resolution Fund (SRF) will be operationalized.

The Euro Summit also mandated the Eurogroup to work on the design, modalities of implementation

and timing of a budgetary instrument for convergence and competitiveness (BICC) for the euro area

and ERM II Member States on a voluntary basis. Leaders agreed that the instrument will be part of

the EU budget, coherent with other EU policies, and subject to criteria and strategic guidance from

the euro area Member States.

We reiterate that the aim of the BICC is to foster economic convergence and competitiveness in the

euro area and the wider EU. A prosperous and stable EMU depends above all upon strong national

economies and sound national policies. Competitive and resilient economic structures, as well as

sustainable public finances and national fiscal tools, promote sustainable economic growth and

allow Member States to stabilize their economies at the national level. The new instrument would

aim to foster both structural reforms and related high quality investments, targeting the economic

challenges where the potential for improving convergence and competitiveness is highest, while

avoiding overlap with other existing EU instruments. Without prejudice to our respective general

positions on the size and content of the next MFF, the new instrument would supersede the

Commission proposal for a Reform Delivery Tool (RDT) and its financial envelope.

The instrument should contain adequate safeguards to ensure complementarity and ownership, for

instance by requiring national cofinancing from Member States. Cyclical modulation of the instrument

(i.e. varying contributions, payouts or cofinancing in accordance with the cycle) would complicate

the operation of the instrument and go beyond the mandate given by Leaders. Access to the

instrument should be subject to sound budgetary principles and the applicable conditionalities that

reflect our shared values, including with respect to rule of law, and obligations under the Stability

and Growth Pact (SGP) and the Macroeconomic Imbalance Procedure (MIP). The instrument should

strengthen the dialogue within the Semester between the Commission, individual Member States

and the Council. In final decisions on reform and investments plans under the instrument and their

subsequent implementation, the Eurogroup and/or Council and its Member States should play a key

role.

The size of the instrument should be agreed upon as part of the MFF negotiations and fit under

both the expenditure and own resources ceilings and should be significantly below the amount

currently envisaged in the Commission proposal for a RDT. Financing of the instrument by

participating Member States should be through the general own resources of the Union. A legal

solution should be found to ensure that non-participating Member States are exempted from the

financing of the instrument. We are not in favor of dedicated taxes as it challenges national

competences. We underline the importance of unity of the budget as a key principle of the EU’s

budgetary framework and are not convinced of the need for external assigned revenue through an

intergovernmental agreement. If some Member States nevertheless wished to supplement their

share of the available funds through an intergovernmental agreement, there cannot be any

presumption for others to participate.

To ensure fair burden sharing and consistency with the legal basis, the instrument could have

separate windows for (1) euro area and (2) non-euro area Member States choosing to participate,

within an EU instrument, but alternative structures consistent with the Euro Summit Statement

could be explored. There could be a link to the relevant euro area recommendations in the context

of the European Semester and the convergence criteria for those Member States preparing to join

the euro or other reforms. Member States that do not participate in the BICC would in any case be

compensated through the revenue side of the MFF.