Sept 27 Following is the text of remarks by EU President Herman Van Rompuy after European Union finance ministers met on Monday to discuss ways to toughen the EU's budget rules.
"Today, the Task Force on economic governance met for the fifth time since it was set up by the European Council on 26 March. Building upon the European Council conclusions in June and in September 2010, the Task Force discussed on the necessary measures to enhance economic governance.
The Task Force had an in-depth exchange of views on the main elements of the legislative proposals the Commission intends to adopt on 29 Sept, which build on the work on the Task Force and are closely related with its discussions.
The discussion today showed a very large degree of convergence on important issues related to budgetary and economic surveillance:
- Much greater attention must be paid to debt.
More ambitious adjustment trajectories will be required for countries with a debt level exceeding 60%; and the excessive-deficit procedure will put more emphasis on the debt situation. For example, a country would be subject to an excessive-deficit procedure even with a deficit below 3% if the debt is above 60 % and the path of debt reduction considered as unsatisfactory.
- A new enforcement system will be developed.
There is an agreement that, in a system where fiscal responsibility remains largely under the responsibility of national authorities, there is a need for a credible enforcement mechanism at the EU level. Further progress has been made on the key parameters of the sanction system. Sanctions would be introduced at an earlier stage, be more progressive and rely on a wider spectrum of enforcement measures.
There was broad support that, as a first step and on the basis of the Commission upcoming proposals, sanctions should be strengthened in the euro area, on the basis of Article 136 of the Treaty. Conditionality for the use of EU funds linked to sound implementation of the Stability and Growth Pact should also be introduced as soon as possible.
Whenever possible, decision-making rules on sanctions should be more automatic and based on a reverse majority rule.
- A new macro-economic surveillance framework
The fiscal pillar of the monetary union developed in the Stability and Growth Pact will be complemented by an economic pillar. A new framework for macro-economic surveillance, including both an annual assessment of the risk and an enforcement framework involving corrective measures, will be created. The objective is to better monitor competitiveness developments and to prevent the occurrence of harmful imbalances, bubbles and negative spill-over effects within the EU and the Euro area. Appropriate enforcement measures, in particular in the euro area, could be adopted to ensure the effectiveness of the framework.
The Task Force will submit its full report to the European Council at the end of October, presenting a comprehensive package of recommendations which will guide future legislative work."