Text Of Van Rompuy Report On Vision For Future Of EMU -2 ...

BRUSSELS (MNI) ? Below is the second half of the verbatim text of a
report by EU Council President Herman Van Rompuy on a ?vision? for the
future of the Eurozone, including steps towards a banking and fiscal
union:

?Integrated supervision is essential to ensure the effective
application of prudential rules, risk control and crisis prevention
throughout the EU. The current architecture should evolve as soon as
possible towards a single European banking supervision system with a
European and a national level. The European level would have ultimate
responsibility. Such a system would ensure that the supervision of banks
in all EU Member States is equally effective in reducing the probability
of bank failures and preventing the need for intervention by joint
deposit guarantees or resolution funds. To this end, the European level
would be given supervisory authority and pre-emptive intervention powers
applicable to all banks. Its direct involvement would vary depending on
the size and nature of banks. The possibilities foreseen under Article
127(6) TFEU regarding the conferral upon the European Central Bank of
powers of supervision over banks in the euro area would be fully
explored.

Building on existing and forthcoming Commission proposals, work
should be taken forward on deposit insurance and resolution:

A European deposit insurance scheme could introduce a European
dimension to national deposit guarantee schemes for banks overseen by
the European supervision. It would strengthen the credibility of the
existing arrangements and serve as an important assurance that eligible
deposits of all credit institutions are sufficiently insured.

A European resolution scheme to be primarily funded by
contributions of banks could provide assistance in the application of
resolution measures to banks overseen by the European supervision with
the aim of orderly winding-down non-viable institutions and thereby
protect tax payer funds.

The deposit insurance scheme and the resolution fund could be set
up under the control of a common resolution authority. Such a framework
would greatly reduce the need to make actual use of the guarantee
scheme. Nevertheless, the credibility of any deposit guarantee scheme
requires access to a solid financial backstop. Therefore, as regards the
euro area, the European Stability Mechanism could act as the fiscal
backstop to the resolution and deposit guarantee authority.

2. Towards an integrated budgetary framework

The financial and debt crisis has underlined high levels of
interdependence particularly within the euro area. The smooth
functioning of the EMU requires not only the swift and vigorous
implementation of the measures already agreed under the reinforced
economic governance framework (notably the Stability and Growth Pact and
the Treaty on Stability, Coordination and Governance), but also a
qualitative move towards a fiscal union.

In the context, within the euro area, of greater pooling of
decision making on budgets commensurate with the pooling of risks,
effective mechanisms to prevent and correct unsustainable fiscal
policies in each Member State are essential. Towards this end, upper
limits on the annual budget balance and on government debt levels of
individual Member States could be agreed in common. Under these rules,
the issuance of government debt beyond the level agreed in common would
have to be justified and receive prior approval. Subsequently, the euro
area level would be in a position to require changes to budgetary
envelopes if they are in violation of fiscal rules, keeping in mind the
need to ensure social fairness.

In a medium term perspective, the issuance of common debt could be
explored as an element of such a fiscal union and subject to progress on
fiscal integration. Steps towards the introduction of joint and several
sovereign liabilities could be considered as long as a robust framework
for budgetary discipline and competitiveness is in place to avoid moral
hazard and foster responsibility and compliance. The process towards the
issuance of common debt should be criteria-based and phased, whereby
progress in the pooling of decisions on budgets would be accompanied
with commensurate steps towards the pooling

of risks. Several options for partial common debt issuance have
been proposed, such as the pooling of some short-term funding
instruments on a limited and conditional basis, or the gradual roll-over
into a redemption fund. Different forms of fiscal solidarity could also
be envisaged.

A fully-fledged fiscal union would imply the development of a
stronger capacity at the European level, capable to manage economic
interdependences, and ultimately the development at the euro area level
of a fiscal body, such as a treasury office. In addition, the
appropriate role and functions of a central budget, including its
articulation with national budgets, will have to be defined.

3. Towards an integrated economic policy framework

In an economic union, national policies should be orientated
towards strong and sustainable economic growth and employment while
promoting social cohesion. Stronger economic integration is also needed
to foster coordination and convergence in different domains of policy
between euro area countries, address imbalances, and ensure the capacity
to adjust to shocks and compete in a globalised world economy. This is
essential for the smooth functioning of the EMU and is an essential
counterpart to the financial and fiscal frameworks.

It is important, building on the principles spelled out in the
European semester and the Euro Plus Pact, to make the framework for
policy coordination more enforceable to ensure that unsustainable
policies do not put stability in EMU at risk. Such a framework would be
particularly important to guide policies in areas such as labour
mobility or tax coordination.

Measures to strengthen the political and administrative capacity of
national institutions and foster national ownership of reforms could be
taken where necessary, as this is a vital condition for the efficient
implementation of growth enhancing reforms.

4. Strengthening democratic legitimacy and accountability

Decisions on national budgets are at the heart of Europe?s
parliamentary democracies. Moving towards more integrated fiscal and
economic decision-making between countries will therefore require strong
mechanisms for legitimate and accountable joint decision-making.
Building public support for European-wide decisions with a far-reaching
impact on the everyday lives of citizens is essential.

Close involvement of the European parliament and national
parliaments will be central, in the respect of the community method.
Protocol 1 TFEU on the role of national parliaments in the EU offers an
appropriate framework for inter-parliamentary cooperation.

III. NEXT STEPS?PROPOSAL FOR A WORKING METHOD

Further work is necessary to develop a specific and time-bound road
map for the achievement of the genuine Economic and Monetary Union.

A report could be submitted to the December European Council by the
President of the European Council in close collaboration with the
President of the Commission, the President of the Eurogroup and the
President of the European Central Bank. There will be regular and
informal consultations with the Member States and the EU institutions.
An interim report could be presented in October 2012.?

[TOPICS: M$X$$$,MGX$$$,M$$CR$,MT$$$$]

shawshank redemption 3 10 to yuma west virginia football west virginia football black friday violence black friday violence il postino