Strong measures for more efficient economic governance

EU heads of state and government took important decisions to strengthen the euro at their meeting in Brussels on 28-29 October. They endorsed the final report of the Task Force on Economic Governance and agreed on the need for a permanent crisis mechanism for the euro area.

Herman Van Rompuy, President of the European
Council (on the right), with Catherine Ashton,
EU High Representative for Foreign Affairs
and Security Policy, and Yves Leterme,
Belgian Prime Minister
© European Union

"With the endorsement of the Task Force report and the decision on the way forward for the euro zone crisis mechanism, the European Council has sealed a solid pact to strengthen the euro. That's one of the most important decisions we have taken in recent months," said Herman Van Rompuy.

The biggest innovation is the setting up of a new macro-economic surveillance framework to detect emerging imbalances and risks, including divergences in competitiveness.

Fiscal responsibility will also be strengthened under a stronger Stability and Growth Pact. Under the new rules, progressive sanctions may kick in earlier in the budgetary surveillance process. Public debt will also be taken into account, alongside the deficit criterion.

Furthermore, the European Council agreed on the establishment of a permanent crisis mechanism to safeguard the financial stability of the euro area. President Herman Van Rompuy will open consultations with the member states on a limited treaty change required to establish such a mechanism.

The European Council also set the EU's priorities for the upcoming G20 summit in Seoul. Some of the issues at stake are financial sustainability, high unemployment and the unpredictability of global commodity prices. The EU will emphasise in Seoul the need to keep markets open and to adopt a growth-oriented development agenda. The reform of the International Monetary Fund will also be raised.

Finally, leaders discussed the preparation of the Cancún conference on climate change and the key EU messages for the upcoming summits with the USA, Russia and Ukraine.

More information:
European Council conclusions (pdf)
Webcast of press conference 
Task Force report (full text) (pdf)
Factsheet on the surveillance procedures in the EU