On Wednesday, the European Commission presented its plan for an overhaul of the economic and monetary union.
The new proposal comes after Jean-Claude Juncker’s speech on the subject, and sets a roadmap for future integration. Most of the proposals build up on previous instruments, fixing, completing or expanding them.
The changes are intended to be operative in two years, and they are as follows:
-Integrating the (so-called) fiscal compact into European law, since, for now, it relies on an intergovernmental treaty.
-Expanding the European Stability Mechanism into a full fledged European monetary fund, including the possibility, in emergency situations, of acting with a qualified majority.
-Completing the Banking Union, setting up a deposit insurance scheme and a backstop, namely a safety net that will act when the Single Resolution Fund can’t finance the resolution of a failing bank.
As for the brand new tools proposed by the Commission, they are intended as support for reforms in Member States, and include a convergence support for members that want to adopt the single currency.
Two additional proposals are intended for future developments:
-A stabilisation mechanism, to deal with asymmetric shocks, that could potentially include a European Unemployment Reinsurance Scheme or an Investment Protection Scheme.
-A European minister of Finances, accountable to the European parliament.
The content of this roadmap isn’t set in stone, but the intention is to establish a common position between the Member States and European institutions, in order to build consensus for the future of the Union.