|Author (Corporate)||Cardiff EDC|
|Content Type||News, Policy-making|
Reports, analyses and information relating to the discussions and creation of the budgetary instrument for convergence and competitiveness (BICC) - also known as Eurozone budget - in the context of the deepening of the Economic and Monetary Union (EMU).
Action was taken by the European Union to preserve the stability and integrity of the euro area in the aftermath of the financial and debt crises. These steps were since complemented and strengthened by different initiatives to address the vulnerabilities in the architecture of the single currency zone in the longer term. However, some relevant gaps remained. These were detected and addressed in the Five Presidents' Report and in the Reflection Paper on the Deepening of the Economic and Monetary Union (EMU). One of the lessons of the crisis was that Member States whose currency is the euro should further enhance the resilience of their economies, through targeted structural reforms and investment, so as to foster convergence and competitiveness of the euro area as a whole.
In this context, the Euro Summit mandated the Eurogroup in December 2018 to work on a number of issues to contribute to the EMU, and notably on the design, modalities of implementation and timing of a budgetary instrument for convergence and competitiveness for the euro area and of the Member States participating in the exchange rate mechanism (ERM II) on a voluntary basis. This instrument should be subject to criteria and strategic guidance from Euro area Member States. A way forward was outlined by the European Commission's Communication on 'Deepening Europe's Economic and Monetary Union'.
On 13 June 2019, the Eurogroup announced an agreement on a number of aspects relating to the establishment of the budgetary instrument. However, it was not until 9 October that the Eurogroup agreed on the remaining issues, namely governance, financing, allocation and modulation. In the meantime, the European Commission adopted in July 2019 a proposal for a Regulation laying down provisions for the instrument's governance framework.
At the Euro Summit in December 2019, the Eurogroup was invited to provide a contribution on solutions for the financing of the BICC, on the basis of the term sheet presented in October 2019. On 17 February 2020, the Eurogroup adopted a Report covering the need, the content, the modalities and considerations on the size of a potential Intergovernmental Agreement (IGA).
|Subject Categories||Economic and Financial Affairs|
|Subject Tags||Economic and Monetary Union [EMU]|
|International Organisations||European Union [EU]|