Communication on steps towards completing Economic and Monetary Union

The architecture of the Economic and Monetary Union (EMU) has been significantly strengthened over the past years to enhance economic governance and to achieve financial stability. Nevertheless, the EMU's resilience needs to be further reinforced in order to re-launch a process of upward convergence, both between Member States and within societies, with increasing productivity, job creation and social fairness at its core.

In June 2015, the President of the European Commission, in close cooperation with the President of the Euro Summit, the President of the Eurogroup, the President of the European Central Bank and the President of the European Parliament presented a report on an ambitious yet pragmatic roadmap for completing the EMU. This Five Presidents' Report makes the point that progress is necessary on four fronts in parallel. Firstly, towards a genuine Economic Union that ensures each economy has the structural features to prosper within the Monetary Union. Secondly, towards a Financial Union that guarantees the integrity of the currency across the Monetary Union by limiting risk to financial stability and increasing risk-sharing with the private sector. Thirdly, towards a Fiscal Union that delivers both fiscal sustainability and fiscal stabilisation. And finally, towards a Political Union that provides the foundation for all of the above through genuine democratic accountability, legitimacy and institutional strengthening.

The Five Presidents also agreed on a roadmap for implementation that should consolidate the euro area by early 2017 (Stage 1 – "deepening by doing"). In this first stage, which started on 1 July 2015, action would build on existing instruments, also by making the best possible use of the existing Treaties. Then, on the basis of benchmarks for a renewed upward convergence of the euro area economies, more fundamental reforms should be undertaken, moving to a medium- to long-term vision for new growth perspectives (Stage 2 – "completing EMU").

Overall, translating the Five Presidents' report into action requires a shared sense of purpose among all euro area Member States and EU institutions. The actions set out in this Communication apply to euro area Member States, but the process towards a deeper EMU is open to all EU countries. At the same time, the Commission will make sure that no distortions occur in the single market.

This Communication and its accompanying proposals take forward key elements of Stage 1 of the process to deepen EMU. The package of measures includes a revised approach to the European Semester; an improved toolbox of economic governance, including the introduction of national Competitiveness Boards and an advisory European Fiscal Board; a more unified representation of the euro area in international organisations, notably the International Monetary Fund; and steps towards a Financial Union, notably via a European Deposit Insurance Scheme. These measures will be complemented by steps taken with the European Parliament to improve democratic accountability of the European economic governance system.

See also:
- Communication from the Commission to the European Parliament, the Council and the European Central Bank. A roadmap for moving towards a more consistent external representation of the euro area in international fora

• Primary Source

ESO: Background information: Completing Europe's Economic and Monetary Union: Commission takes concrete steps to strengthen EMU http://www.europeansources.info/record/press-release-completing-europes-economic-and-monetary-union-commission-takes-concrete-steps-to-strengthen-emu/

EUR-Lex: COM(2015)601: Recommendation for a Council Recommendation on the establishment of National Competitiveness Boards within the Euro Area http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2015:601:FIN

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