|Author (Corporate)||European Commission|
|Series Details||COM (2019) 354|
Legislative proposal - put forward by the European Commission in July 2019 - for a Regulation laying down provisions for the governance framework relevant for the budgetary instrument for convergence and competitiveness for the Eurozone.
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'. The Eurogroup later agreed a Term Sheet on the key features of the budgetary instrument, which was welcomed by the Euro Summit in June 2019.
The draft law setting out the governance framework was adopted by the European Commission on 24 July 2019. This instrument was proposed to be included in the Reform Support Programme. The instrument aims to promote cohesion within the EU by providing euro-area Member States with financial support for reforms and investment. This Regulation should apply to the Member States whose currency is the euro.
|Subject Categories||Economic and Financial Affairs|
|Subject Tags||Economic and Monetary Union [EMU], Economic Governance | Situation|
|International Organisations||European Union [EU]|