Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-12-15-Speech-3-018"
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"en.20101215.5.3-018"2
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"Mr President, honourable Members, let me thank Sharon Bowles for her question and also for the draft resolution on the permanent mechanism. I will try to give you the Commission’s view on the five questions included in the oral question.
Having said that, it should still be possible to have some non-euro-area Member States associated in a support operation via bilateral contributions, as already applies today, in the case of Ireland, to the United Kingdom, Sweden and Denmark.
Let me also comment on the discussion on the eurobonds. Let us recall that, in the context of establishing the financial backstops last 9 May – Schuman Day – and the following night, the Commission made a proposal for a European Financial Stability Mechanism, a Community instrument, which in fact was adopted up to EUR 60 billion, based on loan guarantees by the Union budget under the own-resources decision.
Beyond the Union budget we proposed that this mechanism should be based on loan guarantees provided by the Member States, which would be channelled through this mechanism for countries that were in need of financial assistance because of financial instability over the euro area as a whole.
This was rejected by the Ecofin Council on 9 and 10 May. Why? Because many Member States considered that this proposal resembled too closely the Eurobond.
This then led to the creation of the European Financial Stability Facility, which is an intergovernmental arrangement, and now we are using both the mechanism and the facility in the context of Ireland.
So while the issue of eurobonds is certainly a very important matter, we also have to take into account that this proposal was recently rejected by the Council in the May discussions concerning the European Financial Stability Mechanism.
To conclude, let me underline that the future European Stability Mechanism will be part of a comprehensive response to contain the crisis and stabilise the European economy, and the ESM will complement the new framework of reinforced economic governance which will focus first of all on prevention and will substantially reduce the probability of a crisis arising in the future.
That is the whole essential purpose of the new system of economic governance and I am very grateful for your support for the Commission’s proposals in this regard.
The October European Council invited President Van Rompuy to undertake consultations, together with the Commission, on a limited treaty change required to establish a permanent mechanism for crisis resolution. It is understood that a limited treaty change implies the use of the simplified revision procedure based on Article 48 of the Treaty.
The constraints of this procedure are that, firstly, it allows only treaty changes of the kind that do not increase the competences conferred on the Union and, secondly, it is limited to changes to Part Three of the Treaty on the Functioning of the European Union, which relates to Union policies and internal actions.
It seems that the Member States have a preference for a very limited treaty change which will presumably be placed under Article 136, whose provisions are specific to the euro-area Member States. The issue will be discussed of course in the European Council this week. Whatever change is suggested, Parliament will be formally consulted on it.
Following the European Council decision in October, the Eurogroup agreed at its extraordinary meeting in November on the main principles of a European Stability Mechanism, or ESM. According to the Euro Group agreement the ESM will be an intergovernmental mechanism whose governance will be based on the model of the European Financial Stability Facility.
The concrete details of the financial mechanism have yet to be decided and should be worked out during the first quarter of next year. Funding will of course be a key issue. The future instrument will need to be sufficiently robust and must enjoy strong credibility in the markets.
Any support from the ESM will be based on strict conditionality. Assistance provided to a euro-area Member State should be based on a rigorous programme of economic and fiscal assessment and a thorough analysis of debt sustainability conducted by the Commission together with the IMF, and in liaison with the European Central Bank.
Despite the intergovernmental nature of the financing arm of the mechanism, the policy conditions will remain firmly grounded in the Treaty so as to ensure full consistency with the common multilateral surveillance framework on which the whole Economic and Monetary Union is in fact based.
To answer one of Mrs Bowles’ five questions, no decision as to whether Member States that are not members of the euro area could take part in the mechanism has been taken yet. It seems, nevertheless, that most Member States have a preference for a transparent and clear framework where non-euro-area Member States would be covered by the balance of payments mechanism while euro-area Member States would be covered by the European Stability Mechanism."@en1
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