The US wants Turkey in the EU to keep it inside the tent.
A wrote:
The president is also in favour of joining the EU.But there is no question of Turkey joining any more. If Turkey was going to join at all, it should have joined in the seventies. If Britain is going to leave at all, it should leave now. There is a time for everything. I don't understand why these people still talk about the EU and Turkey's defunct membership bid. Maybe they are pretending to be stupid because they want Turkey to be underestimated as a competitor. Or allies with influence have asked them not to turn their backs on the EU.Any ideas?
http://economistsview.typepad.com/timduy/2011/11/endgame-approaching.html
Council of the EU
Economic governance: Council adopts legal texts
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofin/125952.pdf
You need to click on the various small contacts on the first page
Anne xxxxxxxxxxxxxxxxxx
Economic governance: Council adopts legal texts
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofin/125952.pdf
You need to click on the various small contacts on the first page
Anne xxxxxxxxxxxxxxxxxx
COUNCIL OF
THE EUROPEAN UNION
EN
Brussels, 8 November 2011
16446/11
PRESSE 413
Economic governance: Council adopts legal texts
The Council today1 adopted a package of six legislative proposals aimed at strengthening
economic governance in the EU – and more specifically in the euro area – as part of the
EU's response to the current turmoil on sovereign debt markets (PE-CONS 28/11, 29/11,
30/11, 31/11, 14615/11, 14616/11, 15996/1/11 REV 1 ADD 1, 15998/11 ADD 1 +
16001/11 ADD 1 + REV 2).
Adoption of the so-called "six-pack" of governance measures follows a political agreement
at the Council's meeting on 4 October on the basis of a compromise reached with the
European Parliament. The texts were approved by the Parliament on 28 September.
The measures set out to ensure the degree of coordination necessary to avoid the
accumulation of excessive imbalances and to ensure sustainable public finances. This will
help enable the EU's monetary union to function properly in the long term.
They consist of:
– a regulation amending regulation 1466/97 on the surveillance of member states
budgetary and economic policies;
– a regulation amending regulation 1467/97 on the EU's excessive deficit procedure;
– a regulation on the enforcement of budgetary surveillance in the euro area;
1 The decision was taken without discussion at a meeting of the Economic and Financial
Affairs Council.
16446/11 2
EN
– a regulation on the prevention and correction of macroeconomic imbalances;
– a regulation on enforcement measures to correct excessive macroeconomic
imbalances in the euro area;
– a directive on requirements for the member states' budgetary frameworks.
More specifically, the measures set out to:
• enhance budgetary discipline under the EU's Stability and Growth Pact, in order to
ensure a satisfactory decline of public debt in the member states, as well as a decrease
of high deficits to be followed by achieving ambitious, country-specific medium-term
budgetary objectives (four proposals). This involves enhancing the surveillance of
budgetary policies, introducing provisions on national fiscal frameworks, and applying
enforcement for non-compliant euro area member states more consistently and at an
earlier stage;
• broaden the surveillance of the member states' economic policies, so as to cater
adequately for macroeconomic imbalances (two proposals). An alert mechanism is
introduced for the early detection of imbalances, to be assessed using a "scoreboard" of
economic indicators. An "excessive imbalance procedure" is also introduced, with
enforcement for non-compliant member states.
Reform of the Stability and Growth Pact
The Stability and Growth Pact was adopted in 1997, prior to the creation of the euro, in
order to ensure that fiscal discipline is maintained in the member states. It is aimed at
ensuring that member states respect specified criteria for their annual budget deficits and
public debt, for which the following reference values are set:
• 3% of GDP for annual budget deficits;
• 60% of GDP for public debt.
The new solutions are aimed at strengthening the provisions set for ensuring the respect of
those criteria. They affect both the preventive arm of the pact, namely the procedures that
are followed to ensure that excessive deficits are avoided, and the corrective arm of the
pact, i.e. the procedure followed for the correction of excessive deficits. At the same time,
the reform introduces new provisions with regard to the debt criterion of the pact.
16446/11 3
EN
– Preventive arm of the pact
To promote attainment by the member states of their medium term budgetary objectives
(MTOs), the reform introduces an expenditure benchmark, which implies that annual
expenditure growth should not exceed a reference medium-term rate of GDP growth. This
is meant to ensure that revenue windfalls are not spent but instead allocated to debt
reduction. If a euro area member state has not reached its MTO, a significant deviation in
expenditure development from its reference expenditure growth path could eventually lead
to sanctions in the form of interest-bearing deposits amounting to 0.2% of GDP.
– Corrective arm of the pact (excessive deficit procedure)
Greater emphasis is be placed on the debt criterion of the Stability and Growth Pact, with
member states whose debt exceeds 60% of GDP (the EU's reference value for debt)
required to take steps to reduce their debt at a pre-defined pace, even if their deficit is
below 3% of GDP (the EU's deficit reference value).
To determine whether the debt ratio is sufficiently diminishing toward the 60% of GDP
threshold, a numerical benchmark is introduced. A debt-to-GDP ratio above 60% will thus
be considered to be sufficiently diminishing if its distance with respect to the 60%
reference value has decreased over the previous three years at an annual rate of onetwentieth.
However, a decision to subject a country to the excessive deficit procedure will
not only be based on the numerical benchmark, but will also take into account other
relevant factors.
To strengthen the corrective arm of the Stability and Growth Pact, a new set of financial
sanctions are introduced for euro-area member states; these will apply earlier on in the
excessive deficit procedure, and using a graduated approach. A non-interest-bearing
deposit amounting to 0.2% of GDP will apply once a decision has been taken to subject a
country to the excessive deficit procedure, if an interest-bearing deposit has already been
imposed under the preventive arm of the pact or if serious non-compliance is identified.
The deposit will be converted into a fine of 0.2% of GDP if the Council's initial
recommendation for correcting the deficit has not been followed. Further non-compliance
will result in the sanction being stepped up, in line with the existing provisions of
article 126(11) of the EU treaty (maximum fine: 0.5% of GDP).
To trigger the sanctions more automatically than at present, a so-called reverse majority
rule is introduced, whereby the Commission's proposal for imposing sanctions related to
non-compliance with the Pact will be considered adopted unless the Council turns it down
by qualified majority.
16446/11 4
EN
– Budgetary frameworks at national level
Alongside the reform of the Stability and Growth Pact, a draft directive sets out to ensure
that the objectives of EU budgetary coordination are reflected in the member states'
budgetary frameworks. Accounting, statistical and forecasting practices are brought into
line with EU standards. Member states must adopt multi-annual fiscal planning to ensure
that medium-term budgetary objectives set at EU level are achieved. They must also
introduce rules to promote compliance with the deficit and debt thresholds.
Surveillance of economic policies
Beyond budgetary surveillance, the legislative package is aimed at broadening the
surveillance of the member states' economic policies.
It establishes a mechanism for the prevention and correction of excessive macroeconomic
imbalances, made up of two regulations which outline an "excessive imbalance procedure"
and introduce the possibility of fines being imposed on member states found to be in an
"excessive imbalance position" and repeatedly failing to comply with recommendations.
The starting point of the new framework is an alert mechanism for the early detection of
imbalances, which will be assessed using a "scoreboard" of economic indicators. This will
be followed by country-specific qualitative expert analysis.
If the imbalance is considered to be excessive, the member state concerned could be
subject to an "excessive imbalance procedure", and would be called on to adopt a
corrective action plan within a specific timeframe. The procedure gives the Council more
flexibility in setting deadlines than the excessive deficit procedure in order to account for
the less direct influence of government policies in addressing imbalances.
If the Council decides that the member state concerned has taken appropriate action, the
procedure will be held in abeyance, and can be closed if the Council concludes that the
imbalance is no longer considered to be excessive.
On the other hand, repeated non-compliance with the recommendations can in the case of
euro area member states eventually lead to sanctions. Specifically, a decision to impose a
yearly fine equal to 0.1% of the member state's GDP will be adopted through the "reverse
majority" rule described above.
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