Reforms of the Economic and Monetary Union and of the European Banking Union: current state of play
The financial and economic crisis evidenced the need to reform and strengthen the EU’s Economic and Monetary Union. As is well-known, several imbalances in its functioning – notably the imbalance between a fully integrated Monetary Union among Euro area Member States and the mere coordination of their economic policies – showed their limits, as did the possibility for banks to operate in several Member States without any common supervisory framework.
Consequently, Member States’ fiscal policies are now more constrained following the tightening of the Stability and Growth Pact, the European Semester allows for the closer monitoring of their economic policies and Euro area financial institutions are now supervised and resolved under the Banking Union.
Yet, these reforms have not sufficed to complete the Economic and Monetary Union and several proposals have been tabled over the past years by the European Commission to achieve this goal. The Commission launched its ‘December package’ on 6 December 2017 which entailed five main proposals: 1. the establishment of a European Monetary Fund (EMF), 2. the integration in EU law of the ‘substance’ of the TSCG, 3. the proposal of new budgetary instruments for the Eurozone, 4. some changes in EU funds and the Structural Reform Support Programme, and 5. the creation of a European minister of economy and finance. Additionally, other proposals and priorities, such as the question of the international role of the Euro, have since been pushed forward. They are undoubtedly key to avoid future crises but they also entail important consequences for the Member States and the EU’s legal structure, for instance because they are partly adopted by means of intergovernmental agreements outside of the EU legal framework.
As the discussions on these reforms are still on-going 18 months after the Commission published its December package, and as important changes to it were enacted by – among others – the December 2018 European Council, scholars from our Law Faculty and other European universities debated these issues with practitioners from the European Commission, the Council of the EU, the European Central Bank and the European Parliament during a workshop organised on 20 May at UM Campus Brussels. This event, co-funded by the Law Faculty and SWOL, provided a unique opportunity to exchange on issues such as: the current status of the December package; the creation of the European Monetary Fund and the reform of the European Stability Mechanism; the international role of the Euro; the institutional architecture between Euro area and non-Euro area Member States and Brexit and the future of the Banking Union. The papers presented in this occasion are forthcoming in the Law Faculty Working paper series.
|Written by Diane Fromage and Bruno de Witte - more blogs on Law Blogs Maastricht|