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The last piece in the economic governance reform

20-02-2012 09:56:00

Ms Margrethe Vestager, Danish Minister for Economic and Interior Affairs, Mr Wolfgang Schäuble, German Federal Minister for Finance (left), and Mr George Osborne, UK Chancellor of the Exchequer.

Photo: The Council of the European Union
Ecofin council meeting

Minister for Economic Affairs and the Interior, Margrethe Vestager, hopes that the EU finance and economy ministers this Tuesday at the ECOFIN meeting will be able to lay one of the last pieces in the economic governance reform by reaching agreement on the Commission’s two legislative proposals concerning strengthened euro cooperation (the so-called “two-pack”).

The other pieces of the puzzle consists of the Fiscal Compact and the six proposals for strengthened economic governance (the so-called “six-pack”) which came into force at the end of 2011 and is now being put into practice during the Danish Presidency.

On the agenda for tomorrow’s meeting are the Commission’s two legislative proposals regarding strengthened euro cooperation, the so-called “two-pack”. The purpose of the two proposals is to strengthen the surveillance and follow-up on the euro area economies. 

The ambition is to reach agreement in the Council now and to get an agreement between the Council and the Parliament in place during the Danish Presidency so that the two proposals can enter into force before the countries present and adopt their budgets in accordance with the national budget processes during the autumn.

Margrethe Vestager says:

”I hope that we at the meeting can reach political agreement on the two proposals – the “two-pack” which will strengthen the economic responsibility through better surveillance of the euro countries. The “two-pack” is important to strengthen fiscal discipline in the euro countries and is the last piece in the puzzle to complete the economic governance reform”.

Moreover, the Danish Presidency will continue full speed ahead with the implementation of the enhanced economic cooperation when EU finance and economy ministers meet in Brussels on Tuesday.

At the meeting, the countries will take the next step in the European Semester when the Commission presents its first report on macroeconomic imbalances. The aim of the report is to identify countries that have or are at risk of building up macroeconomic imbalances.

If further analysis shows that some countries have severe imbalances, the Council will at a later point during the Danish Presidency adopt recommendations for the countries to correct these imbalances.

Margrethe Vestager says:

”One of the great innovations in the economic governance reform is the procedure for macroeconomic imbalances. The innovation is that we no longer focus solely on whether the public finances appear healthy but also on other imbalances in the economy such as competiveness problems, current account deficits, housing price bubbles etc. The fact is that the crisis has shown us that even countries with healthy public finance can get in trouble if imbalances build-up elsewhere”.

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