Speech - Blueprint for a Deep and Genuine EMU, Commissioner Olli REHN
European Commission - SPEECH/12/879 28/11/2012
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Vice-President of the European Commission and member of the Commission responsible for Economic and Monetary Affairs and the Euro
Blueprint for a Deep and Genuine EMU
Press Conference on the Blueprint for EMU/Brussels
28 November 2012
Thank you Jose Manuel.
For over three years already we have been simultaneously pursuing both immediate crisis management and rebuilding the architecture of the economic and monetary union. This week has been an important point in time in this regard. As you know, we reached an important decision on Greece on Monday, or actually Tuesday morning. And today in the Commission we have adopted the blueprint that outlines the short, medium and long-term plan for rebuilding the economic and monetary union. I want to say about the decision concerning Greece that it is a major milestone which includes both concrete measures to reduce the debt burden of Greece to 124% by 2020, and a clear commitment to of further reduction of debt burden substantially lower than 110%. This shows that the euro area is practising what it is preaching when we say that we will do whatever it takes to ensure the sustainability and irreversibility of the euro. I know that for some years, for some time, some people have blamed us, blamed the European Union, the euro area for being behind the curve. Well, I want to say that those who still predict a Grexit or bank on it, are themselves badly behind the curve.
This blueprint aims at creating not only a sketch of the final architecture of the economic and monetary union, but it also provides a credible, realistic building plan for completing the construction. The sequencing of the various steps is an essential aspect of the blueprint, as President Barroso explained, and we have taken into account in a balanced way the economic theory of an economic and monetary union, the political reality we operate under, as well as the legal requirements within the Treaties and beyond. But we are firmly leaning on the Community method and on the existing institutions.
The guiding principle of this blueprint is that steps toward further mutualisation of economic risk and solidarity need to be combined with deeper integration of decision-making and responsibility.
Let me highlight three concrete elements quite briefly concerning this blueprint. We have in mind in the short term several concrete proposals within the current Treaties and based on secondary legislation. In order to improve the functioning of the EMU, the existing framework of the economic governance for the euro area should be further strengthened through ensuring ex ante coordination of major economic reforms and following the decision of the next Multi Annual Financial Framework through the creation of a Convergence and Competitiveness instrument to provide support for the timely implementation of structural reforms.
My second point is indeed the Convergence and Competitiveness Instrument, which would support reforms that are recommended in the country specific recommendations so that they are in reality implemented even when they are politically and economically difficult in the short term, especially in more vulnerable member States. This instrument would combine deepening integration of economic policy with financial support and thereby respect the principle according to which steps towards more solidarity have to be combined with responsibility and economic rigour.
And third, the intent to pursue a strengthening and consolidation of external representation of the euro area. We see that this is essentially in fact necessary to ensure that the euro area is represented in such a manner that is commensurate with its economic weight and the strengthening of its internal economic governance. In our view the euro area must be able to deliver a single message on issues of economic and fiscal policy, macroeconomic surveillance, exchange rate policies and financial stability, be it in the G20, in the IMF, G7 or G8, in multilateral economic institutions and with our strategic partners bilaterally. And ultimately we would aim for a single seat for the EU or for at least the euro area in the International Monetary Fund.