Recommendation for a COUNCIL RECOMMENDATION on the economic policy of the euro area
Date: 2020-11-18
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU banking union, coronavirus disease, economic growth, economic reform, epidemic, euro area, fiscal policy, labour market, structural adjustment, sustainable development

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   EUROPEAN COMMISSION  Brussels, 18.11.2020  COM(2020) 746 final  Recommendation for a COUNCIL RECOMMENDATION on the economic policy of the euro area {SWD(2020) 276 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the economic policy of the euro area 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 136 in conjunction with Article 121(2) thereof, 

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of 
the  surveillance  of  budgetary  positions  and  the  surveillance  and  coordination  of  economic 
policies1, and in particular Article 5(2) thereof, 

Having  regard  to  Regulation  (EU)  No  1176/2011  of  the  European  Parliament  and  of  the 
Council  of  16  November  2011  on  the  prevention  and  correction  of  macroeconomic 
imbalances2, and in particular Article 6(1) thereof, 

Having regard to the recommendation of the European Commission, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas:  

(1) 

(2) 

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As a result of the COVID-19 pandemic, the euro area economy experienced a sudden 
and deep recession in the first half of 2020 and remains vulnerable to the persisting 
health crisis. The COVID-19 crisis has produced a series of large demand and supply 
side  shocks  translating  into  an  expected  decline  of  GDP  by  7.8%  in  2020.  The 
recovery in 2021 is now projected to be slower than previously expected and a large 
output  gap  of  some  -7.0%  of  potential  GDP  in  2020  will  not  close  by  the  end  of 
2021.  Considerable  uncertainty  prevails  over  the  economic  outlook,  related  to  the 
evolution  of  the  pandemic  and  behavioural  changes  by  economic  agents.  Prompt 
action  at  the  national  and  Union  level,  including  through  the  Next  Generation  EU 
(NGEU) package, has decisively helped to offset some of the negative consequences 
of the shock and stabilise markets. Both private consumption and investment took a 
severe hit, affecting in turn negatively prices and wages. The labour market outlook 
has  also  taken  a  turn  for  the  worse,  interrupting  seven  years  of  improvements. 
However,  owing  to  the  successful  implementation  of  ambitious  policy  measures  in 
all Member States – such as short-time work schemes and other support policies to 
avoid  mass  lay-offs  and  large  income  losses  –  the  increase  in  unemployment  has 
been  mitigated  by  a  decline  in  activity  rates  as  discouraged  workers  left  the  labour 
market combined with a drop in total hours worked.  

The  COVID-19  crisis  is  increasing  the  economic  divergences  across  euro  area 
Member States. Several factors are driving these divergences, including: the intensity 

OJ L 209, 2.8.1997, p. 1. 
OJ L 306, 23.11.2011, p. 25. 

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and timing of the initial COVID-19 shock; the relative size and economic importance 
of  contact-intensive  sectors  (e.g.,  tourism  and  hospitality)  and  the  differences  in 
fiscal space available. These differences impact confidence, investments and growth 
prospects  as  well  as  regional  disparities  that  pre-existed  but  may  be  exacerbated. 
Over the longer-term, the current COVID-19 crisis risks having permanent negative 
effects on potential growth and income gaps due to lower human and physical capital 
(both tangible and intangible). That could translate into even lower growth in labour 
productivity and incomes. 

The fast and forceful reaction by the Union, including Next Generation EU (NGEU), 
which  comprises  the  Recovery  and  Resilience  Facility  (RRF),  has  boosted  market 
confidence  and  showed  unity  of  Member  States  on  a  coordinated  effort  to  restart 
economic  growth  and  strengthen  economic  and  social resilience.  A  number  of  new 
instruments for the Union and the euro  area were also already agreed immediately. 
These  instruments  already  provide  a  safety  net  for  workers  (through  the  European 
Instrument  for  Temporary  Support  to  mitigate  Unemployment  Risks  in  an 
Emergency - SURE)3, for businesses (through a scheme by the European Investment 
Bank)  and  for  Member  States  in  order  to  stabilise  sovereign’s  funding  costs, 
including through the European Stabilisation Mechanism’s Pandemic Crisis Support 
Instrument.4  The  Union  policy  response  also  included  the  activation  of  the  general 
escape clause of the Stability and Growth Pact and a temporary framework to use the 
flexibility  under  EU  state  aid  rules.5  The  cohesion  policy  funds  were  redirected 
where  most  needed  through  the  Coronavirus  Response  Investment  Initiative  Plus 
(CRII and CRII+).6 

The implementation of well-designed policies in the context of NGEU and its main 
instrument, the RRF, will support Member States in embarking on growth-enhancing 
reforms and increase the level and quality of investments, consistent with serving the 
objectives of resilience and the green and digital twin transitions. It should help build 
human  capital,  support  workers’  successful  job  transitions  which,  alongside  the 
cohesion  policy  funds,  will  be  essential  to  ensure  cohesion,  foster  productivity  and 
enhance  economic  and  social  resilience.  EU  growth  objectives,  and  national 
structural  challenges,  including  those  identified  in  the  2019  and  2020  country-
specific  recommendations,  are  key.  The  Annual  Sustainable  Growth  Strategy 
(ASGS7),  which  promotes  these  objectives,  puts  forward  seven  flagship  initiatives: 
(1)  Power  up,  (2)  Renovate,  (3)  Recharge  and  Refuel,  (4)  Connect,  (5)  Modernise, 
(6) Scale-up, (7) Reskill and upskill. Those flagships  represent  common  challenges 
that  call  for  coordinated  investments  and  reforms.  Member  States  should  channel 
investments,  implement  reforms  and  integrate  further  their  value  chains  in  these 
flagship areas. The proposed Recovery and Resilience Facility Regulation provides, 
among others, that euro area Member States’ Recovery and Resilience Plans shall be 
consistent  with 
the  Council 
recommendation on the economic policy of the euro area. This consistency should be 
taken into account in the assessment of the Recovery and Resilience Plans.      

the  challenges  and  priorities 

identified 

in 

3 
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5 

6 
7 

OJ L 159, 20.5.2020, p. 1–7   
https://www.consilium.europa.eu/media/44011/20200508-pcs-term-sheet-final.pdf  
OJ  C  91I,  20.3.2020,  p.  1–9,  OJ  C  112I,  4.4.2020,  p.  1–9,  OJ  C  164,  13.5.2020,  p.  3–15,  OJ  C  218, 
2.7.2020, p. 3–8. 
OJ L 99, 31.3.2020, p. 5–8. 
COM/2020/575 final 

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The  euro area  requires  a  policy  mix  that  is  supportive,  coordinated,  comprehensive 
and consistent to cushion the impact of the COVID-19 pandemic. The aim is to limit 
any negative long-term impact on the labour market, to reduce significant economic 
and social divergences, to address imbalances and other macro-significant risks and, 
more broadly, to avoid negative consequences on potential economic growth over the 
medium term. The mutual consistency of the three core dimensions of the euro area 
policy  mix  –  monetary,  fiscal  and  structural  –  is  essential  to  ensure  a  supportive 
aggregate policy stance for the euro area.  

The  timely  European  Central  Bank  (ECB)  monetary  policy  interventions  aimed  at 
keeping  the  monetary  transmission  channels  intact  and  safeguarding  medium-term 
price  stability.  The  ECB  announced  substantial  additional  purchases  of  public  and 
private  sector  assets,  which  will  amount  to  EUR  1470  billion  under  the  Asset 
Purchase  Programme  (APP,  EUR  120  billion  until  the  end  of  2020)8  and  the 
Pandemic  Emergency  Purchase  Programme  (PEPP,  EUR  1350  billion  until  at  least 
mid-2021).9 

The  fiscal  stance  is  forecast  to  be  highly  expansionary  in  2020  and  to  remain 
supportive  in  2021  at  both  euro  area  and  national  level.  Coordination  of  national 
fiscal  policies,  in  full  respect  of  the  Stability  and  Growth  Pact,  is  crucial  for  the 
effective  response  to  the  COVID-19  shock  and  the  proper  functioning  of  the 
Economic  and  Monetary  Union  (EMU).  On  20  March  2020,  the  Commission 
concluded that the EU economy was experiencing a severe economic downturn and 
the conditions to activate the general escape clause of the Stability and Growth Pact 
were  met.  This  conclusion  was  endorsed  by  the  finance  ministers  of  the  Member 
States.10  Member  States  introduced  sizeable  budgetary  measures  to  contain  the 
pandemic  and  provide  support  to  individuals  and  businesses  particularly  affected 
including exceptional liquidity support, mainly via guarantees provided to companies 
and to banks to ensure the flow of credit. Further coordinated fiscal support will be 
provided at the EU level, notably through the RRF.  

The  economic  fallout  from  COVID-19  is  having  a  large  negative  impact  on  public 
finances. When health and economic conditions allow, a refocusing of fiscal policies 
towards  achieving  prudent  medium-term  fiscal  positions,  including  by  phasing  out 
support  measures  to  firms  and  citizens,  will  contribute  to  ensuring  fiscal 
sustainability  in  the  medium  term.  This  should  be  done  in  a  way  that  mitigates  the 
social  and  labour-market  impact  of  the  crisis.  Reforms  aimed  at  improving  the 
composition of national budgets and at ensuring fiscal sustainability over the longer 
term, including in view of climate change and health challenges, appear particularly 
relevant. Improving the composition of national budgets, especially through spending 
reviews and effective public procurement frameworks, can create much-needed fiscal 
space.  Green  budgeting  practices  can  also  help  address  the  challenges  of  climate 
mitigation and environmental protection. Adequate, efficient and inclusive health and 
social protection systems offer much-needed protection to those in greater need, play 
a key role as automatic stabilisers and should preserve fiscal sustainability. Similarly, 
reforms  that  strengthen  the  functioning  of  labour,  capital,  products  and  services 

8 
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OJ L 157, 15.6.2016, p. 28–32. 
OJ L 91, 25.3.2020, p. 1–4. 
https://www.consilium.europa.eu/en/press/press-releases/2020/03/23/statement-of-eu-ministers-of-
finance-on-the-stability-and-growth-pact-in-light-of-the-covid-19-crisis/   

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markets  –  through  appropriate  implementation  and  sequencing  –  increase  potential 
output, while avoiding a negative short-term impact on aggregate demand.   

The COVID-19 crisis is reinforcing the importance of reforms for more efficient and 
fairer  public  revenue  systems.  As  the  tax  wedge  on  labour  in  the  majority  of  euro 
area Member States remains high, these include shifting the tax burden towards tax 
bases that are less detrimental to labour supply, productivity, investment and growth, 
while  taking  into  account  the  related  distributional  impact.  An  increased  use  of 
environmental taxation and/or other forms  of pricing of externalities can contribute 
to  sustainable  growth  by  incentivising  “greener”  behaviours.  Measures  addressing 
aggressive tax planning and tax avoidance, both internationally and in the Union, can 
make 
tax  systems  more  efficient  and  fairer.  Moreover,  globalisation  and 
digitalisation  of  the  economy  have  created  a  disconnect  between  where  value  is 
created and where taxes are paid. Work is ongoing within the OECD framework to 
reach  a  global-consensus  based  solution  to  address  tax  challenges  arising  from  the 
digitalisation of the economy. 

Frontloading reforms that tackle investment bottlenecks and supply-side constraints 
is  of  particular  relevance  considering  the  high-level  of  uncertainty  brought  by  the 
COVID-19 shock and its detrimental effect on investment. Measures that accelerate 
the absorption of EU funds and an effective and efficient utilisation of resources are 
essential, in particular in Member States lagging behind in that respect and where EU 
funds  finance  a  significant  share  of  investments.  Reforms  that  reduce  the 
administrative  burden  for  firms  (e.g.,  digitalisation  of  public  administrations, 
including electronic identification, judicial reforms) and prevent the misuse of funds 
(e.g.,  corruption,  fraud  and  anti-money  laundering11)  can  improve  the  business 
environment and help boost investment, job and firm creation.  

The COVID-19 crisis has led to substantial revenue losses for many firms and poses 
risks  to  corporate  solvency  across  the  euro  area.  Effective  insolvency  frameworks 
play  a  crucial  role  in  supporting  viable  firms  undergoing  temporary  problems  and 
providing for the orderly exit of non-viable firms. Improving insolvency frameworks 
can also help address the likely increase in non-performing loans and maintain credit 
to the economy by facilitating the cleaning up of bank balance sheets and spur cross-
border investment over the longer term. In this context, the Restructuring and Second 
Chance Directive (2019/1023)12 was adopted to introduce minimum standards across 
Member States in the national solvency legislation in order to ensure that preventive 
restructuring  frameworks  are  available  to  debtors  in  financial  difficulty,  to  provide 
procedures leading to a discharge of debts incurred by over-indebted entrepreneurs, 
and to increase the efficiency of all types of insolvency procedures. It is important to 
proceed with the transposition and the implementation of the directive. The European 
Commission also announced in the Capital Markets Union action plan of September 
202013 work towards minimum harmonisation or increased convergence in targeted 
areas of core non-bank insolvency. Beyond this, there is scope for Member States to 

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Communication  COM  (2019)  360  final  from  the  Commission  to  the  European  Parliament  and  the 
Council  of  24  July  2019  towards  better  implementation  of  the  EU's  anti-money  laundering  and 
countering the financing of terrorism framework.   
OJ L 172, 26.6.2019, p.18-55. 
COM(2020)590 final. 

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further assess the efficiency and effectiveness of their insolvency frameworks in line 
with international best practices and address the remaining deficiencies.14 

Further  deepening  the  single  market  in  goods  and  services,  and  adapting  the  euro 
area to the digital era, can be a major engine of growth, convergence and resilience. 
The common currency and the single market have been working in tandem to create 
better  conditions  for  economic  stabilisation  and  long-term  growth.  The  COVID-19 
crisis  has  boosted  the  use  of  digital  tools,  highlighted  the  importance  of  the  digital 
single market and has accelerated the  use of digital and cashless payment methods. 
However,  the  single  market  remains  incomplete,  especially  in  the  area  of  services 
and more specifically in retail trade and professional services. The single market has 
the  potential  to  limit  price  rigidities  that  hamper  both  the  monetary  policy 
transmission mechanism and economic resilience. The single market helps with the 
mobility of production factors, which allows sectors, regions and Member States to 
minimise  economic  costs  (e.g.,  unemployment)  in  response  to  shocks.  To  achieve 
further  integration  of  the  single  market  for  goods  and  services,  it  is  necessary  to 
remove  all  remaining  unnecessary  restrictions,  enhance  market  surveillance 
mechanisms  and  take  measures  to  guarantee the  administrative  capacity  in  order  to 
achieve these objectives. 

Reforms and investment that improve labour market integration and transitions, with 
a particular attention to digital and green jobs, are essential to increase economic and 
social resilience and support the recovery. The immediate national and Union crisis 
measures limited the negative economic and social impact on workers. At the same 
time,  a  number  of  long-standing  reforms  have  become  even  more  urgent  now: 
effective  active  labour market  policies, including  individualised  support, improving 
the  quality  and  inclusiveness  of  education  and  training  systems  to  strenghen 
educational  outcomes  from  an  early  age,  strong  re-  and  up-skilling  measures  and 
investment  in  adult  education  and  training  and  in  online  learning  platforms, 
addressing  skills  shortages,  increasing  the  employment  prospects  of  the  most 
vulnerable segments  of  the working population, including the young and  long-term 
unemployed,  as  well  as  closing  the  gender  gap.  Fostering  quality  job  creation,  and 
improving  working  conditions,  notably  by  ensuring  adequate  minimum  wages  and 
addressing  labour  market  segmentation,  are  key  to  support  a  sustainable  and 
inclusive recovery. Social dialogue and collective bargaining play an important role 
in the successful design and implementation of policies.  

Access  to  adequate,  inclusive  and  sustainable  health  and  social  protection  systems, 
which  function  as  automatic  stabilisers  in  the  crisis,  is  important  for  economic  and 
social resilience. These help to maintain decent living standards and good population 
health,  which  is  fundamental  to  a  productive  labour  economy,  through  the  entire 
economic  cycle.  Investments  to  support  health  reforms  and  resilient  health  systems 
need  to  remain  a  priority  for  Member  States.  The  implementation  of  the  European 
Pillar of Social Rights15 is key to guide policies. In the face of the crisis, the need to 
ensure  adequate  social  protection  coverage  for  all,  both  in  terms  of  quality  health- 
and  long-term  care  as  well  as  in  terms  of  income  replacement  for  all  workers, 
including  those  under  atypical  contracts  and  the  self-employed,  has  become  even 

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The Eurogroup identified a number of principles including early identification of debt distress and 
availability of early restructuring procedures. See 
https://www.consilium.europa.eu/en/meetings/eurogroup/2016/04/22/ 
Interinstitutional Proclamation on the European Pillar of Social Rights OJ C 428, 13.12.2017, p.10-15. 

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more important. Many Member States have adopted temporary income support and 
social assistance measures in favour of vulnerable groups with very low incomes and 
workers  not  entitled  to  unemployment  benefits.  Measures  have  been  taken  with 
regard 
in-kind  services. 
Strengthening of the adequacy and coverage of social protection systems needs to be 
done  in  a  way  that  ensures  the  long-term  sustainability  of  public  finances  and 
intergenerational fairness. 

to  benefits,  eligibility  conditions  and  additional 

Significant progress has been achieved in recent years, but the economic fallout from 
the  pandemic  has  put  renewed  pressure  on  the  financial  sector.  Euro  area  banks 
entered the current crisis with stronger loss-absorption capacities compared to before 
the  onset  of  the  global  financial  crisis.  Combined  with  monetary  and  fiscal  policy 
measures,  this  has  avoided  a tightening  of  market  financing  conditions,  beyond the 
initial  phase  of  the  crisis,  and  ensured  the  continued  credit  provision  to  the  private 
sector. The crisis is likely to put further pressure on banks’ already low profitability 
levels  and  non-performing  loan  ratios,  and  on  the  non-bank  financial  sector,  which 
experienced outflows and valuation losses that have been only partly recovered. This 
could hamper the provision of credit, which is essential for the recovery.  The swift 
and sizeable policy interventions have supported confidence and helped to preserve 
macro-financial  stability.  To  mitigate  risks  it  is  crucial  to  sever  the  feedback-loop 
between  corporate  sector  vulnerabilities  and  financial  sector  risks  and  to  address 
structural weaknesses in order to strengthen profitability. Government loan guarantee 
schemes  help  protect  companies  and  the  banking  sector,  but  also  constitute 
contingent  liabilities  for  Member  States’  budgets.  In  the  absence  of  an  effective 
system  that  distinguishes  viable  from  non-viable  businesses,  prolongation  of 
insolvency  moratoria  and  forbearance  of  non-performing  loans  entails  difficult 
decisions as it might lead to misallocation of funds and increase the losses under an 
eventual bankruptcy.  

The  completion  of  the  EMU  architecture  remains  essential.  Filling  the  remaining 
gaps  could  further  increase  the  euro  area’s  stability  and  resilience  and  would 
strengthen  the  international  role  of  the  euro,  which  has  remained  broadly  stable  in 
recent  years.  Beyond  its  short-term  stabilisation  function  and  its  role  in  supporting 
the recovery, Next Generation EU has the potential to impact the EMU in the longer 
term.  Increasing  the  euro  area’s  resilience  to  future  shocks  as  well  as  through  the 
sizeable  issuance  of  euro-denominated  debt,  including  green  and  social  bonds,  will 
add  depth  and  liquidity  to  the  market  for  high-quality  euro-denominated  debt 
securities,  and  can  in  this  way  strengthen  the  euro  as  an  international  reserve 
currency.  Nonetheless,  important  elements  are  still  missing  in  EMU,  such  as  a 
complete  Banking  Union  and  Capital  Markets  Union.  Strengthening  the  Banking 
Union  remains  crucial  in  order  to  ensure  financial  stability,  reduce  financial 
fragmentation  and  protect  lending  to  the  economy  in  times  of  crisis.  Finalising  the 
work  on  the  ESM  package  of  reforms  is  a  priority,  including  the  introduction  of  a 
backstop for the Single Resolution Fund. This backstop should be made operational 
and be anticipated, provided sufficient progress has  been made with risk reduction. 
There should be further work on solutions for overcoming limitations in the current 
set-up for liquidity provision in resolution. Completing the Capital Markets Union is 
a key priority, as demonstrated by the new action plan of September 2020. A strong 
and resilient EMU will also be important  to  strengthen  the international role of the 
euro  and  ensure  the  Union’s  economic  and  financial  autonomy  on  which  the 
Commission  will  put  forward  a  communication,  while  fully  respecting  the  Union’s 

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internal  market  and  pursued  in  an  open  and  transparent  manner  towards  non-euro 
area Member States.  

HEREBY RECOMMENDS that euro area Member States take action, individually, including 
through  their  Recovery  and  Resilience  Plans,  and  collectively  within  the  Eurogroup,  in  the 
period 2021–2022 to: 

1. 

Ensuring a policy stance which supports the recovery  

As  the  health  emergency  persists,  fiscal  policies  should  remain  supportive  in  all  euro  area 
Member States throughout 2021. 

Policy  measures  should  be  tailored  to  country-specific  circumstances  and  be  timely, 
temporary  and  targeted.  As  downside  risks  continue  to  materialise,  Member  States  should 
continue  coordinating  actions  to  effectively  address  the  pandemic,  sustain  the  economy  and 
support a sustainable recovery.  

When  the  epidemiological  and  economic  conditions  allow,  phase  out  support  measures  to 
firms  and  citizens  in  a  way  that  mitigates  the  social  and labour-market  impact  of  the  crisis, 
and  pursue  fiscal  policies  aimed  at  achieving  prudent  medium-term  fiscal  positions  and 
ensuring debt sustainability, while enhancing investment. 

Member  States  should  pursue  reforms  that  strengthen  the  coverage,  adequacy,  and 
sustainability of health and social protection systems. 

Member States should pay particular attention to the quality of budgetary measures. Improve 
public  financial  management,  including  notably  investment  and  green  budgeting  and  public 
procurement frameworks. Make use of spending reviews to better focus public expenditure on 
recovery and resilience needs.  

2. 

Further improving convergence, resilience and sustainable and inclusive growth 

Mitigate the risk of further divergence and enhance economic and social resilience in the euro 
area by implementing reforms that strengthen productivity and employment, ensure a smooth 
allocation of resources and improve the functioning of markets and public administration, and 
by  increasing  the  level  of  public  and  private  investment  to  support  the  recovery  consistent 
with fair and inclusive green and digital transitions. 

Further  integrate  the  single  market  for  goods  and  services,  including  digital,  by  removing 
unnecessary  restrictions,  enhancing  market  surveillance  and  guaranteeing  sufficient 
administrative capacity. 

Ensure effective active labour market policies and support to job transitions, notably towards 
the  green  and  digital  economy.  Foster  fair  working  conditions  and  address  labour  market 
segmentation.  Ensure  the  effective  involvement  of  social  partners  in  policy  making, 
strengthen  social  dialogue  and  collective  bargaining.  Strengthen  inclusive  education  and 
training systems and investment in skilling, addressing skills shortages. 

Continue working on a global consensus-based solution to address the tax challenges arising 
from the digitalisation of the economy within the OECD framework, and stand ready to move 
ahead with action at the EU level by June 2021. Make further progress to combat Aggressive 

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Tax Planning, lower the tax wedge and support a shift in taxation towards carbon pricing and 
environmental taxation. 

3. 

Strengthening national institutional frameworks 

Pursue and frontload reforms to address bottlenecks to investments and to ensure the efficient 
and timely use of EU funds, including of the Recovery and Resilience Facility. Strengthen the 
effectiveness and digitalisation of public administration, including justice and health systems, 
as  well  as  public  employment  services.  Reduce  the  administrative  burden  for  firms  and 
improve  the  business  environment.  Put  in  place  effective  frameworks  to  counter  fraud, 
corruption, and money laundering. 

Promote  concrete  actions  to  increase  the  efficiency,  effectiveness  and  proportionality  of 
insolvency  frameworks,  to  work  out  non-performing  exposures  and  ensure  an  efficient 
allocation of capital. 

4. 

Ensuring macro-financial stability  

Maintain  the  credit  channels  to  the  economy  and  measures  to  support  viable  companies  as 
long as necessary during the emergency of the unprecedented crisis.  

Keep  sound  bank  sector  balance  sheets,  including  by  continuing  to  address  non-performing 
loans, in particular through the development of secondary markets for non-performing loans.  

5. 

Completing the EMU and strengthening the international role of the euro 

Make progress on deepening the Economic and Monetary Union to increase the resilience of 
the  euro  area  by  completing  the  Banking  Union  and  Capital  Markets  Union  and  through 
initiatives implementing digital finance, retail finance and sustainable finance policies. 

Increase the efficiency, proportionality and overall coherence of the bank crisis management 
and depositor insurance framework, including robust Banking Union safety nets as short-term 
priorities. 

Progress  in  these  areas  will  contribute  to  enhancing  the  international  role  of  the  euro  and 
promote  better  Europe’s  economic  interests  globally  while  fully  respecting  the  Union’s 
internal market. 

Done at Brussels, 

For the Council 
The President. 

EN 

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  EN