Blueprint
for a deep and genuine EMU
07/05/2013
- Speech
The
Minister of Finance and President of the Eurogroup Jeroen Dijsselbloem
delivered a speech at a debate in Brussels on the future economic, monetary,
banking and political union, hosted by the European Commission.
President
of the Eurogroup Jeroen Dijsselbloem at the European Commission.
Good
Morning Ladies and Gentlemen,
I am
pleased to take part in this interesting and important discussion on the future
economic, monetary, banking and political union. The subject is fundamental to
the future of the European project itself. Many issues of the future union are
being discussed at the level of the full EU membership. However, in recent
times the Eurogroup has played a significant role in this discussion as well.
The
Eurogroup’s recent focus has been twofold: taking decisive action to manage the
crisis; and ensuring the crisis’ root causes are permanently addressed to boost
jobs and growth. We have looked for permanent solutions to these causes. And it
has become obvious that strengthening the fabric of our monetary union and
reinforcing our economic governance structures just cannot wait
Game
changing measures have been taken:
The
European Stability Mechanism (ESM) now provides a permanent safety net, with
the means to support member states in difficulty and preserve the financial
stability of the EU.
Considerable
fiscal consolidation is underway, accompanied by far-reaching structural
reforms to boost competitiveness in all member states.
Stronger
economic governance is a reality. New legislation has reinforced fiscal and
macroeconomic surveillance and coordination.
Ladies and
Gentlemen, there is still a long way to go. The EU must not waver in its
commitment to achieving sound public finances. The future of the Economic and
Monetary Union, but also the future of the European social model, depends on us
recognizing clearly that we cannot spend and borrow our way to recovery in a
sustainable way. Future investments in education, healthcare and active labour
markets policy, are all predicated on sound public finances. Fiscal
consolidation may weigh on growth in the short term, but it is an absolute
condition for the EU’s prosperity in the middle and long term. But the
prosperous future of the EMU also depends on us rebuilding and restoring
confidence in the banking sector. This is vital if we are to restore normal
lending to hard working businesses and families; it is the fuel of our economy.
We must therefore press ahead with the completion of a Banking Union that
strengthens bank supervision and delivers genuinely integrated resolution
tools.
First, the
rapid implementation of agreed rules on bank capital requirements and the
Single Supervisory Mechanism is essential. Capital requirement rules will make
the financial sector better equipped to manage risks and absorb shocks. The
Single Supervisory Mechanism will place all systemically important Eurozone
banks under the direct supervision of the European Central Bank. It will also
ensure that when banks are in trouble the alarm bell is sounded early,
immediate action is taken and the worst can be avoided.
Second, now
we must turn our attention to how we resolve failing banks in the event that
this is required. To do this fairly and efficiently, we must ensure that those
who have profited from a bank's risk taking also bear the cost. A clear hierarchy
of claims will need to be agreed in this context. Moreover, deposits up to
100.000 euro should be safeguarded, while the use of public money must be
avoided as much as possible. Swift completion of the discussions on the Bank
Recovery & Resolution Directive is therefore essential. By ensuring that
the private sector bears the primary responsibility for bank resolution, market
discipline will be increased and a sustainable, healthy financial sector can be achieved.
Furthermore, establishing a Single Resolution Mechanism to ensure the timely
and orderly resolution of failed institutions, is a priority. This will
reduce resolution costs and speed up the process. And it is the necessary
complement to the Single Supervisory Mechanism. Working on the Banking Union is
part of my ambition to move the Eurogroup’s focus from crisis management to a
more structured debate on how to enhance future growth and competitiveness in
the euro area. The jobs lost during the crisis must be replaced, and new jobs
must be created for generations to come.
Ladies and gentlemen,
The Eurogroup’s agenda is clear: gradually working towards
balancing budgets; strengthening our financial system and keeping up the
structural reforms necessary for economic growth in all member states. Where
new structures and decision-making processes are required, their democratic
legitimacy and accountability must be guaranteed. New mechanisms to increase the level of
cooperation between national parliaments and the European Parliament are particularly
important in this regard. A genuine economic and monetary union is already in
the making. European policies and the underlying choices are too often implicit
and have to be made explicit. But we have to realize that in order to involve
the citizens of our countries, we have to talk about the choices we make, we
have to explain the dilemma’s, the trade-offs and always, always talk about the
fairness of our choices and the perspective that comes from our choices.
I thank you
for your attention.
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