On 28 and 29 June 2012 eurozone leaders agreed on important short-term measures to ensure the stability of the euro area. A longer-term vision on the way forward to strengthen the Economic and Monetary Union will be fleshed out before the end of 2012.
Following a discussion on the report "Towards a Genuine Economic and Monetary Union", EU heads of state or government invited the President of the European Council, Herman Van Rompuy, to develop, in close collaboration with the Presidents of the Commission, the Eurogroup and the European Central Bank, "a specific and time-bound road map for the achievement of a genuine Economic and Monetary Union".
The vision for the future EMU as outlined in the report comprises four building blocks:
- an integrated financial framework
- an integrated budgetary framework
- an integrated economic policy framework
- strengthened democratic legitimacy and accountability.
Euro area summit statement
Eurozone heads of state or government decided:
- to establish a single banking supervisory mechanism run the by the ECB, and, once this mechanism has been created,
- to provide the European Stability Mechanism (ESM) with the possibility to inject funds into banks directly.
Spain's bank recapitalisation will begin under current rules, i.e. with assistance provided by the European Financial Stability Facility (EFSF) until the ESM becomes available. The funds will then be transferred to the ESM without gaining seniority status.
It was also agreed that EFSF/ESM funds can be used flexibly to buy bonds for member states that comply with common rules, recommendations and timetables.
The Eurogroup has been asked to implement these decisions by 9 July 2012.
The European Council welcomed the euro area summit statement.
Compact for growth and jobs
Under tax policy measures, several member states will launch a request for enhanced cooperation to introduce a financial transaction tax. Member states participating in the Euro Plus Pact will continue their discussions on tax policy issues.
In addition, leaders took other growth-boosting decisions that will apply not only to the eurozone but to all the 27 Member States. For instance, 120 billion euro will be mobilised in order to
- increase the European Investment Bank's paid-in capital by 10 billion euro
- launch the pilot phase for Project Bonds in transport, energy and broadband infrastructure
- reallocate structural funds in support of SMEs and youth employment and devote a further 55 billion euro to growth-enhancing measures.
Compact for growth and jobs (full text in pdf)
European Council conclusions (full text in pdf)
Remarks by President Herman Van Rompuy following the European Council (pdf)