At the June 2018 Euro Summit, EU Leaders asked Finance Ministers to work on the terms of reference for the operation of the common backstop to the Banking Union’s Single Resolution Fund, which exists to assist in the resolution of systemically important banks that are failing or deemed likely to fail. We were also directed to develop a term sheet for our ongoing work on reform of the European Stability Mechanism, which is the euro area’s crisis lending body.
In addition to these issues, the Eurogroup has also been discussing possible new budgetary instruments aimed at strengthening the euro area. This has included proposals put forward by the European Commission and by France and Germany for the establishment of instruments for competitiveness, convergence and stabilisation. A proposal was put forward by France and Germany in the joint Meseberg Declaration released in June. This was followed by an outline of the proposal for a euro zone budget, to be part of the EU budget, which was released in November.
At the Eurogroup meeting on the 3 December, my colleagues and I were able to agree a comprehensive package of measures to be put forward to Leaders at the 14 December Euro Summit. The Report to Leaders on EMU Deepening outlines what we have agreed. This includes a comprehensive terms of reference for the common backstop to the Single Resolution Fund and reforms to the European Stability Mechanism’s toolkit of financial instruments and its role within programmes of financial assistance. In addition, Leaders are asked for guidance on the way forward on the French-German proposals, which are at a very early stage of discussions between Finance Ministers, relative to our work on completing Banking Union and ESM reform.