# C_2013062EN.01000801.xml

| 2.3.2013 | EN | Official Journal of the European Union | C 62/8 |
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2.3.2013

EN

Official Journal of the European Union

C 62/8

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Resolution of the Committee of the Regions on ‘Sustainable future for the economic and monetary union (EMU)’

2013/C 62/02

THE COMMITTEE OF THE REGIONS (CoR)

| — | having regard to the final conclusions of the European Council of 13-14 December 2012; |
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having regard to the final conclusions of the European Council of 13-14 December 2012;

| — | having regard to the report "Towards a Genuine Economic and Monetary Union" prepared by the President of the European Council Herman Van Rompuy together with the Presidents of the European Commission, the European Central Bank and the Eurogroup (5 December 2012); |
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having regard to the report "Towards a Genuine Economic and Monetary Union" prepared by the President of the European Council Herman Van Rompuy together with the Presidents of the European Commission, the European Central Bank and the Eurogroup (5 December 2012);

| — | having regard to the European Commission Communication "A Blueprint for a deep and genuine economic and monetary union (COM(2012) 777/2 - 28 November 2012)"; |
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having regard to the European Commission Communication "A Blueprint for a deep and genuine economic and monetary union (COM(2012) 777/2 - 28 November 2012)";

| — | having regard to the European Parliament resolution of 20 November 2012 with recommendations to the Commission on the report of the Presidents of the European Council, the European Commission, the European Central Bank and the Eurogroup "Towards a genuine Economic and Monetary Union"; |
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having regard to the European Parliament resolution of 20 November 2012 with recommendations to the Commission on the report of the Presidents of the European Council, the European Commission, the European Central Bank and the Eurogroup "Towards a genuine Economic and Monetary Union";

| — | having regard to the European Parliament resolution of 16 January 2013 on Public Finances in EMU - 2011 and 2012; |
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having regard to the European Parliament resolution of 16 January 2013 on Public Finances in EMU - 2011 and 2012;

| 1. | highlights that the strengthening of the Economic and Monetary Union (EMU) in the Member States is essential to ensure sustainable growth, social progress and further political integration within the EU; |
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1.

highlights that the strengthening of the Economic and Monetary Union (EMU) in the Member States is essential to ensure sustainable growth, social progress and further political integration within the EU;

| 2. | regrets that a number of budgetary and economic policy issues highlighted in the European Commission Blueprint for a deep and genuine EMU and the report prepared by the President of the European Council together with the Presidents of the European Commission, the European Central Bank and the Eurogroup were not taken on board in the final European Council conclusions and were postponed to the June 2013 European Council; |
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2.

regrets that a number of budgetary and economic policy issues highlighted in the European Commission Blueprint for a deep and genuine EMU and the report prepared by the President of the European Council together with the Presidents of the European Commission, the European Central Bank and the Eurogroup were not taken on board in the final European Council conclusions and were postponed to the June 2013 European Council;

| 3. | calls for regional and local authorities to be involved in the European semester process at Member State level and for the CoR to be involved at the level of the EU institutions, because fiscal governance also means economic governance at local and regional level. For fiscal governance to work effectively, the division of responsibility between the EU, Member States and the local and regional level should be clear and unambiguous; |
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3.

calls for regional and local authorities to be involved in the European semester process at Member State level and for the CoR to be involved at the level of the EU institutions, because fiscal governance also means economic governance at local and regional level. For fiscal governance to work effectively, the division of responsibility between the EU, Member States and the local and regional level should be clear and unambiguous;

| 4. | underlines that European decisions related to the EMU have a considerable impact not only on national, but also on sub-national finances. Stresses, in this context, that the fiscal autonomy at sub-national level is guaranteed inter alia by Article 4 of the Treaty on the European Union; therefore calls for greater synergies between EU, Member State and sub-State budgets; |
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4.

underlines that European decisions related to the EMU have a considerable impact not only on national, but also on sub-national finances. Stresses, in this context, that the fiscal autonomy at sub-national level is guaranteed inter alia by Article 4 of the Treaty on the European Union; therefore calls for greater synergies between EU, Member State and sub-State budgets;

inter alia

| 5. | recalls, in this context, the request by the European Parliament to the Commission (1) to "fully address", in its next Annual Growth Survey, "the role of the EU budget in the European Semester process by providing factual and concrete data on its triggering, catalytic, synergetic and complementary effects on overall public expenditure at local, regional and national levels"; |
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5.

recalls, in this context, the request by the European Parliament to the Commission (1) to "fully address", in its next Annual Growth Survey, "the role of the EU budget in the European Semester process by providing factual and concrete data on its triggering, catalytic, synergetic and complementary effects on overall public expenditure at local, regional and national levels";

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| 6. | reiterates its support to the call made by the European Parliament on Member States to consider signing to a "Social Investment Pact" based on the model of the "Euro Plus Pact". It would set targets for social investments to be taken by Member States in order to meet the employment, social and education objectives of the Europe 2020 strategy; |
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6.

reiterates its support to the call made by the European Parliament on Member States to consider signing to a "Social Investment Pact" based on the model of the "Euro Plus Pact". It would set targets for social investments to be taken by Member States in order to meet the employment, social and education objectives of the Europe 2020 strategy;

| 7. | stresses that efforts to tackle the economic crisis should now focus on developing the new mechanisms that have already been agreed and making sure they work well, and on taking the local and regional level into account in the European semester; |
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7.

stresses that efforts to tackle the economic crisis should now focus on developing the new mechanisms that have already been agreed and making sure they work well, and on taking the local and regional level into account in the European semester;

| 8. | welcomes that the European Council conclusions (2) stress that "the possibilities offered by the EU's existing fiscal framework to balance productive public investment needs with fiscal discipline objectives" should be further "exploited" in the preventive arm of the Stability and Growth Pact. This objective becomes even more topical against the backdrop of the recent International Monetary Fund's findings that so-called fiscal multipliers, which gauge the negative impact of budget consolidation on growth, were "substantially higher" than anticipated by analysts during the debt crisis. Expects therefore the Commission to address further the issue within the announced communication on the quality of public spending which should consider, inter alia, the issue of separating current spending and investment in the budget deficit calculations so as to avoid public investments with long-term net benefits being impeded; |
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8.

welcomes that the European Council conclusions (2) stress that "the possibilities offered by the EU's existing fiscal framework to balance productive public investment needs with fiscal discipline objectives" should be further "exploited" in the preventive arm of the Stability and Growth Pact. This objective becomes even more topical against the backdrop of the recent International Monetary Fund's findings that so-called fiscal multipliers, which gauge the negative impact of budget consolidation on growth, were "substantially higher" than anticipated by analysts during the debt crisis. Expects therefore the Commission to address further the issue within the announced communication on the quality of public spending which should consider, inter alia, the issue of separating current spending and investment in the budget deficit calculations so as to avoid public investments with long-term net benefits being impeded;

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inter alia

current spending

investment

Integrated financial framework

Integrated financial framework

| 9. | underlines that the weakness of the banking sector in several Member States and the Union as a whole, threatens public finances with a particular impact at regional and local level and regrets that the cost of managing the banking crisis has mainly fallen on taxpayers and is damaging the growth of the real economy; |
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9.

underlines that the weakness of the banking sector in several Member States and the Union as a whole, threatens public finances with a particular impact at regional and local level and regrets that the cost of managing the banking crisis has mainly fallen on taxpayers and is damaging the growth of the real economy;

| 10. | highlights, that any measure taken in the context of a Banking Union should be accompanied by an improvement of transparency and accountability as the measures may have profound effects on public finances, both on Member State level and on local and regional level, as well as on banks, and citizens; |
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10.

highlights, that any measure taken in the context of a Banking Union should be accompanied by an improvement of transparency and accountability as the measures may have profound effects on public finances, both on Member State level and on local and regional level, as well as on banks, and citizens;

| 11. | welcomes the agreement on a Single Supervisory Mechanism by the Council and the European Parliament as a regulatory framework for banks in the European Union and highlights, in this context, the role of regional banks in providing capital for SMEs as well as for public investment projects geared towards territorial development; |
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11.

welcomes the agreement on a Single Supervisory Mechanism by the Council and the European Parliament as a regulatory framework for banks in the European Union and highlights, in this context, the role of regional banks in providing capital for SMEs as well as for public investment projects geared towards territorial development;

| 12. | supports the proposals for a Recovery and Resolution Directive and for a Deposit Guarantee Scheme Directive and agrees that they must be adopted as a matter of priority; underlines however that it is necessary that the rules introduced by this legislation, and in particular the monitoring and control system, are proportional; |
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12.

supports the proposals for a Recovery and Resolution Directive and for a Deposit Guarantee Scheme Directive and agrees that they must be adopted as a matter of priority; underlines however that it is necessary that the rules introduced by this legislation, and in particular the monitoring and control system, are proportional;

| 13. | considers that the long-term goal of the single European deposit framework necessitates uniform, common, stringent requirements, which take sufficient account of specific national circumstances in the financial sector; |
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13.

considers that the long-term goal of the single European deposit framework necessitates uniform, common, stringent requirements, which take sufficient account of specific national circumstances in the financial sector;

| 14. | requests the European Commission to rapidly present a legislative follow-up to the Liikanen (3) report on the legal separation of certain particularly risky financial activities from deposit-taking banks within a banking group; |
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14.

requests the European Commission to rapidly present a legislative follow-up to the Liikanen (3) report on the legal separation of certain particularly risky financial activities from deposit-taking banks within a banking group;

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| 15. | asks the Commission why it has postponed its commitment to present a report on the establishment of an independent European rating agency to the end of 2016; |
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15.

asks the Commission why it has postponed its commitment to present a report on the establishment of an independent European rating agency to the end of 2016;

Integrated budgetary framework

Integrated budgetary framework

| 16. | agrees that EMU needs to be accompanied by proper budgetary policy rules and supports in this respect the rapid adoption of the "two-pack" in order to complement the "six-pack" and the Treaty on Stability, Coordination and Governance (TSCG, "Fiscal Compact"), which entered into force in early 2013; |
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16.

agrees that EMU needs to be accompanied by proper budgetary policy rules and supports in this respect the rapid adoption of the "two-pack" in order to complement the "six-pack" and the Treaty on Stability, Coordination and Governance (TSCG, "Fiscal Compact"), which entered into force in early 2013;

| 17. | supports the European Parliament's invitation to the Member States "to clarify the responsibility, role, fiscal transfers and revenue source of different levels of government (national, regional and local) in ensuring a sound and sustainable public finance framework, in particular by taking into account the impact on local and regional fiscal autonomy of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union"; therefore recommends that local and regional authorities be involved in an appropriate manner both in the further development of these rules and in their implementation, in accordance with the spirit of multilevel governance; |
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17.

supports the European Parliament's invitation to the Member States "to clarify the responsibility, role, fiscal transfers and revenue source of different levels of government (national, regional and local) in ensuring a sound and sustainable public finance framework, in particular by taking into account the impact on local and regional fiscal autonomy of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union"; therefore recommends that local and regional authorities be involved in an appropriate manner both in the further development of these rules and in their implementation, in accordance with the spirit of multilevel governance;

| 18. | regrets that the European Council conclusions do not mention the need for a fiscal capacity aimed at supporting national economic reforms and absorbing asymmetric shocks. The CoR is convinced that such a fiscal capacity is necessary to achieve a deep and genuine EMU; |
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18.

regrets that the European Council conclusions do not mention the need for a fiscal capacity aimed at supporting national economic reforms and absorbing asymmetric shocks. The CoR is convinced that such a fiscal capacity is necessary to achieve a deep and genuine EMU;

| 19. | considers that, if fiscal capacity is introduced, it should be subject to joint decision-making and implementation at the level of EMU, but that it should also be open on a voluntary basis to Member States outside the Euro area; |
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19.

considers that, if fiscal capacity is introduced, it should be subject to joint decision-making and implementation at the level of EMU, but that it should also be open on a voluntary basis to Member States outside the Euro area;

| 20. | endorses the call by the European Parliament on the Commission to present as soon as possible a roadmap towards a common issuance of public debt instruments; |
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20.

endorses the call by the European Parliament on the Commission to present as soon as possible a roadmap towards a common issuance of public debt instruments;

| 21. | assumes that, if fiscal capacity is introduced, it should be treated separately from the MFF in the short term and as a separate EMU-specific budgetary procedure in the longer term but only under the condition that the Treaty procedures are followed thereby safeguarding transparency and democratic supervision; |
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21.

assumes that, if fiscal capacity is introduced, it should be treated separately from the MFF in the short term and as a separate EMU-specific budgetary procedure in the longer term but only under the condition that the Treaty procedures are followed thereby safeguarding transparency and democratic supervision;

Integrated economic policy framework

Integrated economic policy framework

| 22. | considers that the Europe 2020 strategy is key to a strengthening of the economic arm of the EMU while the emphasis was mainly laying in the last years on its monetary side; |
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22.

considers that the Europe 2020 strategy is key to a strengthening of the economic arm of the EMU while the emphasis was mainly laying in the last years on its monetary side;

| 23. | stresses the importance of the growth potential from implementing the single market provisions, provided that it functions in an appropriate manner and focuses on key areas where there is space for innovation and creation of quality jobs; |
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23.

stresses the importance of the growth potential from implementing the single market provisions, provided that it functions in an appropriate manner and focuses on key areas where there is space for innovation and creation of quality jobs;

| 24. | welcomes the setting up of a mechanism for stronger coordination, convergence and enforcement of structural policies based on arrangements of a contractual nature between Member States and EU institutions on the condition that democratic accountability is not bypassed. Agrees that these arrangements should be concluded on a case-by-case basis and welcomes that they should be supported with temporary, targeted and flexible financial support. Underlines, in this context, the specific role of local and regional financing of investments and therefore requests that local and regional authorities are involved when contractual agreements are developed, with due respect of national legislations; |
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24.

welcomes the setting up of a mechanism for stronger coordination, convergence and enforcement of structural policies based on arrangements of a contractual nature between Member States and EU institutions on the condition that democratic accountability is not bypassed. Agrees that these arrangements should be concluded on a case-by-case basis and welcomes that they should be supported with temporary, targeted and flexible financial support. Underlines, in this context, the specific role of local and regional financing of investments and therefore requests that local and regional authorities are involved when contractual agreements are developed, with due respect of national legislations;

| 25. | fully agrees that economic policies must be geared towards promoting strong, sustainable and inclusive economic growth, enhancing competitiveness and boosting employment in order for Europe to remain a highly attractive social market economy and to preserve the European social model. Underlines that the main vehicles to achieve this objective are the Europe 2020 strategy and the Annual Growth Survey; |
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25.

fully agrees that economic policies must be geared towards promoting strong, sustainable and inclusive economic growth, enhancing competitiveness and boosting employment in order for Europe to remain a highly attractive social market economy and to preserve the European social model. Underlines that the main vehicles to achieve this objective are the Europe 2020 strategy and the Annual Growth Survey;

| 26. | welcomes the suggestion that all major economic policy reforms that Member States plan to undertake should be discussed ex-ante and, where appropriate, coordinated among the Member States. Underlines that on the European level such discussion should involve the institutions and consultative bodies of the EU and that on Member States' level it should involve local and regional authorities as well as other stakeholders; |
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26.

welcomes the suggestion that all major economic policy reforms that Member States plan to undertake should be discussed ex-ante and, where appropriate, coordinated among the Member States. Underlines that on the European level such discussion should involve the institutions and consultative bodies of the EU and that on Member States' level it should involve local and regional authorities as well as other stakeholders;

| 27. | welcomes that the European Commission's 2012 report on public finances in the EMU dedicates a chapter to local and regional public finances and requests that the Commission maintains its analysis capacity of fiscal decentralisation in future reports; |
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27.

welcomes that the European Commission's 2012 report on public finances in the EMU dedicates a chapter to local and regional public finances and requests that the Commission maintains its analysis capacity of fiscal decentralisation in future reports;

| 28. | welcomes the Annual Growth Survey's proposal to maintain the five priorities established in March 2012 and supports the following elements to be introduced:






  — | the addition of a regional dimension in the Annual Growth Survey that underlines the local and regional dimension of the Europe 2020 strategy and the respect of the subsidiarity principle and the division of powers within each Member State for both the country-specific recommendations and the preparation of national reform programmes; |
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28.

welcomes the Annual Growth Survey's proposal to maintain the five priorities established in March 2012 and supports the following elements to be introduced:

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the addition of a regional dimension in the Annual Growth Survey that underlines the local and regional dimension of the Europe 2020 strategy and the respect of the subsidiarity principle and the division of powers within each Member State for both the country-specific recommendations and the preparation of national reform programmes;

| — | the involvement of representatives of local and regional authorities in the continuous dialogue between the European Commission and the Member States, particularly on matters directly linked to local and regional competences; |
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the involvement of representatives of local and regional authorities in the continuous dialogue between the European Commission and the Member States, particularly on matters directly linked to local and regional competences;

Enhanced governance: democratic legitimacy and accountability

Enhanced governance: democratic legitimacy and accountability

| 29. | underlines that democracy and legitimacy need to be ensured when developing the EMU. The CoR therefore welcomes the key role foreseen for the European Parliament, the involvement of the national parliaments and calls for the participation of the local and regional levels in this process, in particular of the regions with legislative powers and their parliaments; |
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29.

underlines that democracy and legitimacy need to be ensured when developing the EMU. The CoR therefore welcomes the key role foreseen for the European Parliament, the involvement of the national parliaments and calls for the participation of the local and regional levels in this process, in particular of the regions with legislative powers and their parliaments;

| 30. | wishes to see an increase level of democratic accountability of the Troika through auditions of its members by the European Parliament; |
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30.

wishes to see an increase level of democratic accountability of the Troika through auditions of its members by the European Parliament;

| 31. | notes that the discussion on EMU is strongly linked to the overall debate on the future of the EU, to which the CoR wishes to actively contribute in order to represent the views of the local and regional authorities of the EU; |
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31.

notes that the discussion on EMU is strongly linked to the overall debate on the future of the EU, to which the CoR wishes to actively contribute in order to represent the views of the local and regional authorities of the EU;

| 32. | instructs the President of the Committee of the Regions to submit the resolution to the President of the European Parliament, the President of the European Council, the President of the European Commission, the Irish Presidency of the Council of the EU and the forthcoming Lithuanian Presidency. |
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32.

instructs the President of the Committee of the Regions to submit the resolution to the President of the European Parliament, the President of the European Council, the President of the European Commission, the Irish Presidency of the Council of the EU and the forthcoming Lithuanian Presidency.

Brussels, 1 February 2013.

The President of the Committee of the Regions

Ramón Luis VALCÁRCEL SISO

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(1)  European Parliament resolution: "European Semester for economic policy coordination: implementation of 2012 priorities".

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(2)  European Council conclusions, 13-14 December 2012, I. Economic Policy Pt. 2.

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(3)  http://ec.europa.eu/internal_market/bank/docs/high-level_expert_group/report_en.pdf.

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