Establishment of the budgetary instrument for convergence and competitiveness (BICC)

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Author (Corporate)
Publication Date 2018-
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Summary:

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).

Further information:

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.

Related Link(s)
Commentary and Analysis
Bruegel: Blog, 24/06/2019: The June Eurogroup meeting: Reflections on BICC http://bruegel.org/2019/06/the-june-eurogroup-meeting-reflections-on-bicc/
LSE: EUROPP Blog, 01/07/2019: Have Austria, Germany and the Netherlands impeded Eurozone reforms? https://blogs.lse.ac.uk/europpblog/2019/07/01/have-austria-germany-and-the-netherlands-impeded-eurozone-reforms/

News
City AM, 14/06/2019: EU officials fail to make significant progress on Eurozone budget size and funding https://www.cityam.com/eu-officials-fail-to-make-significant-progress-on-eurozone-budget-size-and-funding/
Reuters, 14/06/2019: Euro zone takes small step on integration, but not on key ideas https://uk.reuters.com/article/idUKKCN1TF0M0
France24, 14/06/2019: EU ministers strike compromise on Macron-backed eurozone budget https://www.france24.com/en/20190614-eu-ministers-strike-compromise-macron-backed-eurozone-budget
RTL Today, 14/06/2019: EU ministers collide over timid eurozone reforms https://today.rtl.lu/news/business-and-tech/a/1361953.html
Bloomberg, 14/06/2019: Finance Chiefs Agree on Euro-Area Budget But Skirt Funding https://www.bloomberg.com/news/articles/2019-06-14/finance-chiefs-agree-euro-zone-budget-but-skirt-funding-source
RTL Today, 16/06/2019: EU ministers strike shaky compromise on eurozone budget https://today.rtl.lu/news/business-and-tech/a/1362396.html
Politico, 21/06/2019: Rutte declares eurozone budget dead, Macron hails its good health https://www.politico.eu/article/rutte-declares-eurozone-budget-dead-macron-hails-its-good-health/
Reuters, 03/10/2019: EU ministers to clash over future euro zone budget financing https://uk.reuters.com/article/idUKKBN1WI1UT
EurActiv, 09/10/2019: France to convince member states on size of eurozone budget https://www.euractiv.com/section/economy-jobs/news/france-to-convince-member-states-on-size-of-eurozone-budget/
Euronews, 09/10/2019: EU ministers close to deal on small euro zone budget https://www.euronews.com/2019/10/09/eu-ministers-close-to-deal-on-small-euro-zone-budget
NL Times, 10/10/2019: Dutch finance minister pleased with Eurozone budget deal https://nltimes.nl/2019/10/10/dutch-finance-minister-pleased-eurozone-budget-deal
EurActiv, 10/10/2019: Eurozone sharpens up new anti-shock fund https://www.euractiv.com/section/economy-jobs/news/eurozone-sharpens-up-new-anti-shock-fund/
Reuters, 10/10/2019: EU ministers agree euro zone budget short of original ambitions https://www.reuters.com/article/idUSKBN1WP0RZ
Politico, 10/10/2019: France’s eurozone budget ambitions hit Hanseatic wall https://www.politico.eu/article/french-eurozone-budget-ambitions-hit-hanseatic-wall-eurozone/

Official
General Secretariat of the Council: Explainer on the euro area budgetary instrument https://www.consilium.europa.eu/en/policies/emu-deepening/bicc-faq/
Eurogroup: Term sheet on the budgetary instrument for convergence and competitiveness, 14 June 2019 https://www.consilium.europa.eu/en/press/press-releases/2019/06/14/term-sheet-on-the-budgetary-instrument-for-convergence-and-competitiveness/
Eurogroup: Press Release, 10/10/2019: Term sheet on the budgetary instrument for convergence and competitiveness (BICC) https://www.consilium.europa.eu/en/press/press-releases/2019/10/10/term-sheet-on-the-budgetary-instrument-for-convergence-and-competitiveness-bicc/

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