Last night we discussed how to complete the Economic and Monetary Union (EMU), how to have a full genuine EMU. There was, at the level of the European Council, an agreement on the roadmap for that purpose.
This discussion comes following a very important decision taken this morning by the Finance Ministers on the Single Supervisory Mechanism (SSM). The Commission presented a proposal on 12 September and almost exactly three months later, on the 13 December, there was a unanimous agreement by the Council on that proposal. As you know, when the Commission put forward this proposal, we said this is the first indispensable building block of the banking union.
So the agreement on the SSM is extremely important because it shows the EU and the euro area means business. It also shows that we can move forward at 27 within the Treaty framework. The proposal, now adopted, on the SSM is designed to meet euro area need but in a way that is open to all and this is critically important for all the exercise in which we are engaged. – how to deepen the EMU while keeping the integrity of the European Union as a whole.
The SSM is the key to all further steps in the construction of the Banking Union. We will not tolerate poor supervision for any of the 6000 banks inthe euro area. There is now the possibility for ECB to step in and directly supervise any of them so that banks in difficulty are restructured or closed.
The first piece of banking union is agreed subject to the formal approval of the European Parliament. The next steps should be a swift conclusion on the bank capital rules and the harmonisation of national bank resolution and deposit guarantee schemes in early 2013. As you know the Commission has already tabled some months ago proposals precisely on that, so we expect now the co-legislator to agree on this as soon as possible. And today we saw the Heads of State or Government welcoming the prospects of a single resolution mechanism. Indeed the Commission will make a proposal for a single resolution mechanism in 2013. This will be the next important building block of our Banking Union. This will mean that taxpayers will not have to pick up the bill in the future and that the sector will pay to solve its own problems.
In the same vein, we need to get agreement quickly on the two-pack economic governance proposals. Everyone agrees at European Council levelon the need for these proposals. I call now on the European Parliament to come to an agreement so that we can get these proposals adopted and take another important step on our way towards a deeper and more integrated Economic and Monetary Union.
Tonight we also had a good discussion on the future of the EMU. While our focus is on the immediate steps needed – we need a vision of where we are going. From that point of view, I found today’s discussion quite interesting.The report of the four Presidents, the report prepared by President van Rompuy together with myself and Presidents Draghi and Juncker, and also the Commission blueprint set out that vision – the vision for the medium and long term. I think it is an ambitious but realistic vision and the Commission is determined to keep up the pace of reform. But we also agree that national ownership and also the understanding of the next steps is needed and that was one of the most important purposes of tonight’s discussion.
So we have the input of Heads of State of Government on how they see now the next steps and I very much welcome the debate. Decisions werenot expected for today, but the deepening of the process that is now launched. In fact, Heads of State or Government asked the President of the European Council in cooperation with the President of the European Commission to come with more concrete ideas and a time-bound roadmap at the June European Council. This discussion will enrich the work that the Commission is doing on more detailed proposals on many of these issues and which we will bring forward more formally next year.
For example, and that was a very important point in the discussion tonight, we will propose contractual arrangements namely for structural reforms, backed up by financial support. The fact that there was a general consensus on that is a very important development. Of course, now we have to put forward the detailed proposals.
To conclude, this year has been extremely tough, especially for the most vulnerable in our societies.
But in fact we are tackling the root causes of the trouble: Public finances are getting better. Competitiveness of the least competitive is improving. Financial sector is being cleaned up. Governance architecture is making progress. So while not complacent, there are reasons to be positive and I think that investors and our partners are recognising that. The fact that there was an important agreement on Greece was also extremely important because once again we have shown that we have the capacity to act and we are able to do whatever is necessary for a firm and sustained irreversibility of the euro as a currency of the European Union.
I thank you for your attention.
