The first EU Economy and Finance Ministers Council under the Cyprus EU Presidency took place yesterday in Brussels.
Ministers exchanged views and adopted a general position on the issue of the "two pack", two draft regulations on strengthened fiscal surveillance of the euro area.
Cypriot Minister of Finance Vassos Shiarly, who chaired the meeting, referred during a press conference in Brussels to the decisions taken at the Council and the issues that were discussed.
Present at the press conference were the Commission`s Vice President for Economic and Monetary Affairs and the Euro, Olli Rehn and the Commissioner responsible for Internal Market and Services Michel Barnier.
The aim of the "two pack" is to complement what has already been agreed under the "six pack" legislation, mainly through enhancing macroeconomic surveillance for countries under Excessive Deficit Procedure or countries under a Macroeconomic Programme. There are also provisions for submitting draft budget plans to the European Commission in order to issue an Opinion.
In his statements at the press conference after the ECOFIN meeting, Shiarly said that the Council adopted the recommendations of the Commission published on the 30th of May 2012, for each member state, with the aim to correct structural imbalances, promote growth and jobs.
As he said, due to the new economic governance, the evaluation of the recommendations was particularly difficult this year.
Commissioner Rehn said that allowing the ESM to directly recapitalise banks, once the conditions are met, is a cornerstone of the efforts to break the vicious circle between banks and sovereigns. "Once in place, this will be a powerful tool to ease pressure on sovereigns in the euro area", he stressed.
Regarding the two proposed regulations to further strengthen the economic governance of the euro area, the so-called "two-pack", Rehn said that the EU needs to put in place these important building blocks, which are part of the solid foundations of the EMU 2.0 that the EU is now currently building. "We are essentially rebuilding the Economic and Monetary Union", he stressed.
ECOFIN Ministers also exchanged views on what was agreed during the last European Council of 28-29 June 2012 regarding their decision on "Compact for Growth and Jobs", providing a coherent framework for action at national, EU and euro area levels, using all possible levers, instruments and policies.
The Compact includes, among other, provisions for the mobilisation of EUR 120 billion for boosting the Union`s economy, increase of European Investment Bank`s paid-in capital by EUR 10 billion, swift implementation of the Project Bond pilot phase and further deepening of the Single Market.
The European Council also decided for the creation of a single European supervisory mechanism for banks, as an important step to break the vicious circle between banks and sovereigns.
Shiarly said that the procedure for the establishment of a single banking supervisor will depend first of all on presentation by the European Commission of its proposals.
