On Friday, the #EuroSummit will meet to take stock of where we are on #Eurozone reform. It will be another "keep the ball rolling" summit without concrete decisions. Still, it will be worth paying attention to the fineprint.
Thread:
consilium.europa.eu/en/meetings/eu…
1/ This edition will be the first under new leadership: With Charles Michel, we have again a @eucopresident from a € member state. Will be interesting to see if he makes EMU an explicit priority of his mandate. @Lagarde and @vonderleyen will attend for the first time.
2/ The #EuroSummit will again meet in "inclusive format". That means that all heads except @BorisJohnson are invited to participate, but he won't come to the normal #EuCo either. So even member states that have no intention to join the euro still have an equal say in the debate.
2/ The substance to be discussed is rather thin and it is unlikely that anything will be finally decided. Topics on the menu are the usual suspects:
- ESM reform
- banking union
- BICC
Basis for the discussion is the letter by @mariofcenteno👇
consilium.europa.eu/en/press/press…
3/ On ESM reform: In June, leaders had asked the Eurogroup to get the package ready for final approval by this week. They have failed to do so because 🇮🇹 has put in a veto last week for reasons that I do not fully understand.
consilium.europa.eu/en/press/press…
4/ @mariofcenteno claims that there is an "agreement in principle" that is subject to "national procedures". But it looks a lot more like @gualtierieurope primarily needs to garner more support at home for a deal that the previous government including @matteosalvinimi negotiated.
5/ On substance, formally there is still disagreement on the legal status of the Terms of References on single-limb collective action clauses. Again, not sure that this completely captures the political dimension of the veto. So it seems nothing will move here until 🇮🇹 moves.
6/ On banking union: Things are stuck. Despite the opening by @OlafScholz a few weeks back, ministers did not propose the opening of political talks on all BU elements, i.e. including deposit insurance and the treatment of sovereign bonds. Instead, technical talks will continue.
7/ What matters here is the language in the conclusions. The Centeno letter contains two crucial points:
First, he says that work on all BU elements should be done "on a consensual basis". If leaders take up that formulation in the conclusions, it would be a really bad sign:
8/ Most banking union legislation falls under QMV - it would be nuts to re-intergovernmentalise this policy area. So hopefully leaders do not follow Centeno here.
Second, the letter argues that work on BU should be brought "forward within this institutional cycle".
9/ It would be very welcome if leaders take up the idea of giving the work on BU a clear time frame - and 2024 seems a reasonable objective. But ideally, they would go further than Centeno and fix 2024 as the deadline for the actual *completion* of banking union.
10/ Finally, the instrument formerly known as Eurozone budget a.k.a. BICC: My sense is that leaders will not touch this sad creature in earnest until they have to - and that will be when they meet as actual #EUCO and decide on the MFF.
11/ Until then, the Eurogroup will continue to negotiate. But the really big remaining sticking point, namely whether or not there will be an IGA to put in additional resources at a later stage, will not be solved by ministers but by the leaders. Just not now.
12/ So to sum up, look for two things on Friday: How will @eucopresident formulate his ambition for EMU deepening? And what language will leaders use on banking union?
And then we all meet again in June 2020 for a new decade of Eurozone reform. The ball keeps rolling.
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