Good morning everyone,
Today we are presenting new proposals for completing Europe's Economic and Monetary Union.
Our Economic and Monetary Union is more resilient now than it was before the crisis, but it is not yet complete. A more integrated, resilient and performing euro area would bring further stability and prosperity to all Europeans.
We have had almost three years of intensive discussions on various aspects of deepening the EMU. Now it is time to decide. The June leaders' Summit should take a position on key proposals, in particular on Banking Union and the ESM, which were identified as short term priorities. Last week's agreement on the banking package paves the way for further progress on banking union.
Today we deliver two measures to further strengthen the EMU – namely the Reform Support Programme, and the European Investment Stabilization Function.
The two measures are complementary. By incentivising reforms at the national level and stabilising public investment during downturns, both proposals will reinforce the resilience of individual economies and the euro area as a whole. Our end goal is to achieve better living and social standards for all Europeans. This is what matters at the end of the day.
Let me focus on the Reform Support Programme.
Structural reforms are fundamental to modernise our economies, strengthen their resilience, and foster convergence within and across the Member States.
Through the European Semester we see that the implementation of reforms has been uneven across Member States and policy areas. Major reforms are complex and often have high political cost. Experience shows that they bear fruit, but it is also true that it takes time for their benefits to be felt. As a consequence, many necessary reform efforts may be delayed, abandoned or even reversed.
The Reform Support Programme is designed exactly to strengthen the incentives for reforms. It will offer financial and technical support, upon request by Member States and without any co-financing needed from Member States.
The programme will first and foremost support and incentivise reforms identified under the European Semester, in particular in the Country Specific Recommendations and under the macroeconomic imbalances procedure.
The programme will be open to all EU Member States. We are also proposing a dedicated instrument for the non-euro area members that take demonstrable steps towards joining the euro. By demonstrable steps we mean concrete plans set out by the authorities, with a precise calendar.
There will be three tools under the Reform Support Programme with a total budget of 25 billion euro:
First, there is the Reform Delivery Tool, which will offer financial support to the Member State upon implementation of agreed reforms. The Reform Delivery Tool will mobilise the bulk of the budget – 22 billion euro out of as I said 25 billion in total. At first, we will set this financial support according to geographical allocations, but any subsequent rounds will be competitive. There will be only one single payment at the end once all commitments have been successfully implemented. As such, there are both strong incentives to prepare and implement multiannual reform programmes, and robust safeguards against moral hazard.
Second, the Programme will continue to provide technical support for the design and implementation of reforms in Member States. Here we are reinforcing something which already works well. The demand for such tailor-made reform support currently exceeds our budgetary capacity for that, so we are offering additional financing.
And third, we also propose a dedicated Convergence Facility, which will offer financial and technical support for those non-euro Member States that take concrete steps to adopt the euro. We have stated clearly that the euro area should remain open and welcoming to new members. It is important that we accompany those who are ready to work hard to join the Euro Area
Now let me now pass floor to Pierre who will explain the European Investment Stabilisation Function.