COMMISSION OPINION on the draft European Council Decision amending Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro
Date: 2011-02-15
Institutions: European Commission
Subjects: European Union, economic policy, euro, euro area, monetary policy, stability programme

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EUROPEAN COMMISSION 

Brussels, 15.2.2011 
COM(2011) 70 final 

COMMISSION OPINION 

on the draft European Council Decision amending Article 136 of the Treaty on the 
Functioning of the European Union with regard to a stability mechanism for 
Member States whose currency is the euro 

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COMMISSION OPINION 

on the draft European Council Decision amending Article 136 of the Treaty on the 
Functioning of the European Union with regard to a stability mechanism for 
Member States whose currency is the euro 

THE EUROPEAN COMMISSION, 

Having regard to the Treaty on European Union, and in particular the second subparagraph of 
Article 48(6) thereof, 

Whereas: 

(1) 

On  16  December  2010,  the  Belgian  Government,  acting  in  accordance  with  the  first 
subparagraph of Article 48(6) of the Treaty on European Union (TEU), submitted to 
the  European  Council  a  proposal  for  revising  Article  136  of  the  Treaty  on  the 
Functioning  of  the  European  Union  (TFEU)  by  adding  a  paragraph  which  would 
enable  the  Member  States  whose  currency  is  the  euro  to  establish  a  stability 
mechanism to be activated if indispensable to safeguard the stability of the euro area 
as  a  whole  and  which  would  provide  that  the  granting  of  any  financial  assistance 
required under the mechanism is to be made subject to strict conditionality. 

(2)  When  it  met  on  16  and  17  December  2010,  the  European  Council  agreed  that  the 
TFEU should be amended to enable the Member States of the euro area to establish a 
European stability mechanism. 

(3) 

(4) 

(5) 

(6) 

(7) 

To this end, the European Council approved the text of a draft Decision amending the 
TFEU  and  decided  to  launch  the  simplified  revision  procedure  provided  for  in 
Article 48(6) of the TEU immediately. 

The  President  of  the  European  Council  wrote  to  the  Commission  on  20  December 
2010 requesting its opinion. 

The draft decision adopted by the European Council adds to Article 136 of the TFEU a 
paragraph  3  which  provides  that  Member  States  whose  currency  is  the  euro  may 
establish  a  stability  mechanism  to  be  activated  if  indispensable  to  safeguard  the 
stability of the euro area as a whole and that the granting of any financial assistance 
required under the mechanism is to be made subject to strict conditionality. 

The  new  paragraph,  which  will  be  one  of  the  Treaty  provisions  specific  to 
Member States whose currency is the euro, confirms  that  the legal framework of the 
Union does not prevent those Member States from establishing a permanent stability 
mechanism enabling them to obtain any necessary financial assistance. 

Some general features of the future mechanism were also the subject of a statement by 
the  Eurogroup  at  its  meeting  of  28  November  2010  and  were  approved  by  the 
European Council. 

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(8) 

(9) 

In  this  opinion,  the  Commission  will,  in  the  first  place,  consider  the  draft  decision 
approved  by  the  European  Council  in  the  light  of  the  conditions  on  the  use  of  the 
simplified revision procedure and will thereafter give its position on the substance of 
the amendment to the Treaty. 

Firstly,  the  Commission  takes  the  view  that  the  requisite  conditions  for  having 
recourse to the simplified revision procedure provided for in Article 48(6) of the TEU 
are met. 

(10)  To  begin  with,  the  proposed  amendment  concerns  a  provision  of  Part  Three  of  the 
TFEU relating to Union policies and internal actions. The Commission also notes that 
it does not affect, either directly or indirectly, the other parts of the TFEU. 

(11)  Furthermore the amendment does not affect the competences conferred on the Union 
and its institutions in the Treaties. It does not involve creating a new legal base which 
would  allow  the  Union  to  take  action  that  was  not  possible  before  this  Treaty 
amendment.  Under  the  draft  decision,  the  permanent  stability  mechanism  will  be 
established directly by Member States whose currency is the euro. 

(12)  Nor  does  the  draft  decision  reduce  the  competences  conferred  on  the  Union.  In 
particular, it does not affect either the specific solidarity mechanisms provided for in 
Articles 122 and 143 of the TFEU in the event that a Member State is in difficulties or 
is  seriously  threatened  with  difficulties  or  the  Union’s  competences  in  terms  of 
coordination  and  surveillance  of  the  economic  and  financial  policies  of  the 
Member States  in  general  and  of  Member  States  whose  currency  is  the  euro  in 
particular. 

(13)  As  regards  this  last  aspect,  on  29  September  2010  the  Commission  proposed  an 
ambitious legislative package aimed at robust reinforcement of economic governance 
in the euro area. It particularly welcomes the political support which the package has 
received  from  the  European  Council.  The  global  economic  and  financial  crisis  has 
highlighted  and  increased  the  need  to  reinforce  the  established  framework  for  the 
Economic  and  Monetary  Union  (EMU)  in  order  to  bolster  macroeconomic  stability 
and the viability of public finances. This reinforcement requires closer coordination of 
the  economic  and  budgetary  policies  of  the  Member  States  of  the  euro  area,  the  key 
objective underlying the Commission’s legislative package currently under discussion 
in  the  European  Parliament  and  the  Council.  This  objective  was  also  acknowledged 
and further developed in the final report which the Task Force chaired by the President 
of the European Council presented to the European Council in October 2010. 

(14)  The Union’s economic governance in the euro area will thus constitute the basis which 
the  future  stability  mechanism  will  necessarily  build  upon.  The  strict  conditions  to 
which  granting  any  assistance  under  the  mechanism  is  to  be  made  subject  must  be 
based on the guidelines adopted at Union level to support the proper functioning of the 
EMU. The Commission will take every initiative, whether legislative or of any other 
kind, to ensure consistency between the future mechanism and the Union’s economic 
governance in the euro area in particular, while respecting the competences conferred 
on the Union and its institutions by the Treaty. 

(15)  As  a  complement 

the 
EMU framework also requires a robust institutional and financial mechanism to cope 

to  stronger  economic  governance,  reinforcement  of 

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with difficulties or a serious threat of difficulties in one or more Member States of the 
euro area. The events of 2010 have shown the risks of contagion that can arise if one 
Member State of the euro area falls prey to serious financial difficulties. Although it 
proved  possible  to  find  swift  interim  solutions  by  setting  up  the  European  Financial 
Stabilisation Mechanism and the European Financial Stability Fund, the Commission 
fully supports the principle of a permanent mechanism. 

HAS DELIVERED A FAVOURABLE OPINION 

on  the  draft  European  Council  Decision  amending  Article  136  of  the  Treaty  on  the 
Functioning of the European Union with regard to a stability mechanism for Member States 
whose currency is the euro. 

This opinion is addressed to the European Council. 

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