Thread by @lucasguttenberg

Wednesday was BICC day again. Hardly anyone noticed, but the @EU_Commission published its proposal for the governance framework of the instrument formerly known as the Eurozone budget.

It's not really beachside material, still here the main take-aways:
europa.eu/rapid/press-re…

1/ The proposal makes clear that the COM essentially sees the BICC as an upgraded form of their Reform Delivery Tool (2018 proposal in the link). But rather than proposing an amended version of the orginal RTD proposal, it went for the minimal solution.
ec.europa.eu/commission/sit…

2/ The new BICC proposal would set up a two-step process: In the "euro area recommendation" in spring, the Council in EZ composition (i.e. de facto the Eurogroup) would, on a COM proposal, define "strategic orientations" for the BICC for the upcoming cycle.

3/ In a second step, the Council at 19 would adopt "country-specific guidance". This guidance would then determine for which reform/investment proposals countries would get funds out of the BICC.

This is pretty much the timeline we had proposed in Feb:
delorsinstitut.de/en/all-publica…

4/ Thus, the first real difference to the RTD proposal is this: Originally, reforms to be supported under the RTD had to respond to Semester recommendations adopted by all 28. Now they need to follow guidance by the Eurogroup.

5/ The second one is also one we had avocated in our paper in February: The proposal includes a provision to modulate co-financing rates in case of a severe economic downturn (as determined by the Council). Given the stance of NL and a few others, expect this to be controversial.

6/ Otherwise that's it: The rest of the original RTD proposal remains valid, including
- a very rigid pre-allocation of funds to individual countries
- a strong role for the COM in the decision if countries get the money.

6/ So we will enter the legislative process with these two proposals. Judging from recent months, I would expect member states wanting to change the original proposal quite substantially , e.g. to limit the role of the Commission.

But of course there is a catch: @Europarl_EN.

7/ Both proposals (RTD and governance) have to be adopted under full co-decision. So far, the EP has played practically no role in the process. Now this is the first test for the new @EP_Economics to show it has its own ideas on Eurozone governance. No EP approval, no BICC.

8/ And in addition, there are still major open questions among member states, in particular when it comes to possible additional resources and a possible IGA.

The BICC may be small in size - but the effort that will be needed to bring it over the line will still have to be big.

9/ and of course the thing is called *RDT* not RTD.