Current developments

How to manage the eurozone efficiently

Speaking at the European Parliament on 27 October, President of the European Council Herman Van Rompuy explained the implications of the EU's evolving economic and financial policy structures.

Multifaceted reform of economic governance

The European Union is putting in place enhanced economic governance, which combines three kinds of pressure. Institutional pressure is exercised for instance by means of the new legislation on reinforced fiscal and macro-economic surveillance. The peer pressure that leaders put on each other is much more intense than it was ten years ago. Additional pressure is created by the markets reacting instantaneously to the latest decisions. "These three types of pressure to induce responsible behaviour work to reinforce each other," said Herman Van Rompuy.

 

Eurozone summits

A new feature of European economic policy coordination is the meeting of the heads of state and government of eurozone countries, chaired by President Van Rompuy.

"It is perfectly natural that those who share a common currency take some decisions together", said President Van Rompuy. He added, however, that he would personally do his utmost to avoid divisions between the eurozone countries and other members of the Union.

President Van Rompuy intends if possible to hold eurozone summits immediately after meetings of the European Council, the summits that bring together all EU leaders. He also recognised the continuing role to be played by the Commission and the Parliament.


For an illustration of the new eurozone governance structure, please see below.


Future strengthening of economic convergence in the eurozone

The eurozone summit of 26 October gave President Van Rompuy a mandate to identify possible steps to strengthen the economic union, including exploring the possibility of limited Treaty changes. "My intention is that first we discuss the 'what' before we discuss the 'how'," he said. Treaty changes take time, whereas an immediate financial crisis can only be dealt with by other, swifter means.

The new eurozone governance structure

euro-governance-chart

More information:
President Van Rompuy at the European Parliament: view video
Remarks by President Van Rompuy at the European Parliament (pdf)
Euro Summit Statement (26 October 2011) (pdf)
Eurogroup webpages

 

Source CONS, © European Union, 2011

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