ZEI Monitor: EU Progress 2014-2019

Completing the Economic and Monetary Union

• Legislative Proposals - Long-term EU budget (MFF) 2021-2027:

On the 31st of May 2018, the European Commission proposed to create a Reform Support Programme and an European Investment Stabilisation Function to strengthen the Economic and Monetary Union for the next long-term EU budget 2021-2027. (Press release)

1. a Proposal for a Regulation on a Reform Support Programme aims to support priority reforms in all EU member states, with an overall budget of 25 billion euro. It comprises three elements: a Reform Delivery Tool to provide financial support for reforms; a Technical Support Instrument to offer and share technical expertise; and a Convergence Facility, to help member states on their way to joining the euro.

2. a Proposal for a Regulation on a European Investment Stabilisation Function is supposed to help stabilise public investment levels and facilitate rapid economic recovery in cases of significant economic shocks in member states of the euro area and those participating in the European Exchange Rate Mechanism (ERM II).

• Convergence: On the 23rd of May 2018, the European Commission published the 2018 Convergence Report, which covers the seven non-euro area member states that are legally committed to adopting the euro: Bulgaria, the Czech Republic, Croatia, Hungary, Poland, Romania and Sweden. It finds that these member states generally display considerable nominal convergence, but none of them currently meet all the formal conditions for joining the euro area. Two of these member states, Bulgaria and Croatia, fulfil all of the convergence criteria, except for the exchange rate criterion as they are not members of the Exchange Rate Mechanism (ERM II). (More)

Completing the Banking Union

• Legislative Proposal - Sovereign-Bond Backed Securities:

On the 24th of May 2018, the European Commission put forward a Proposal for a Regulation on sovereign-bond backed securities (SBBS). The legal act would enable SBBS, contribute to weakening the link between banks and their home countries and remove unwarranted regulatory obstacles to the market-led development of SBBS. These securities would be issued by private institutions as claims on a portfolio of euro-area government bonds. President Juncker's Letter of Intent at the State of the Union of September 2017 and the Banking Union Communication of October 2017 announced that an enabling framework for SBBS would be proposed by the Commission in spring 2018.  Investing in SBBS would help investors such as investment funds, insurance companies, or banks to diversify their sovereign portfolios, leading to more integrated financial markets. (More)

• Legislative Proposals - Non-Performing Loans:

On the 14th of March 2018, the European Commission proposed measures to acclerate the reduction of non-performing loans (NPLs) in the banking sector. Following up the Commissions's Communication from the 11th of October 2017, two legislative proposals were presented: (press release)

1. a Proposal for a Directive on credit servicers, credit purchasers and the recovery of collateral to set common standards for authorisation and supervision and to impose conduct rules across the EU.

2. a Proposal for a Regulation on the introduction of a minimum loss coverage for non-performing exposures amending the Capital Requirements Regulation (CRR) 

• Tackling non-performing loans: On the 18th of January 2018, the European Commission has published its first progress report on the tackling of non-performing loans (NPLs) to support risk-reduction in the European banking sector. It announces that the European Commission will propose a package of measures to reduce the level of existing NPLs and to prevent the build-up of NPLs in the future. Furthermore, the report shows that the positive trend of falling NPL ratios and growing coverage ratios has solidified and continued into the second half of 2017. (More)

Creation of a permanent and accountable European Minister of Economy and Finance

A strong Union built on a strong EMU

• EMU Roadmap: On the 6th of December 2017, the European Commission set out a Roadmap and several concrete measures for deepening Europe's Economic and Monetary Union. The next 18 months should be used to take the next steps, as agreed in the Leaders' Agenda. The package includes four main initiatives: (press release)

1. Legislative Proposal - European Monetary Fund:

A Proposal for a Regulation to establish a European Monetary Fund (EMF), anchored within the EU's legal framework and built on the well-established structure of the European Stability Mechanism (ESM).

2. Legislative Proposal - Fiscal Compact:

A Proposal for a Directive to integrate the substance of the Treaty on Stability, Coordination and Governance (TSCG) into the Union legal framework, taking into account the appropriate flexibility built into the Stability and Growth Pact and identified by the Commission since January 2015. The cornerstone  of  the  TSCG  is  its  Title  III,  which  is known as the  so-called ‘Fiscal Compact’.

3. Governance of EU Structural and Investment Funds: a Communication on new budgetary instruments for a stable euro area within the Union framework setting out a vision of how certain budgetary functions essential for the euro area and the EU's public finances as a whole can be developed. To that end, the Commission proposed changes to the Common Provisions Regulation governing the European Structural and Investment Funds (ESIF) to use their performance reserve in support of agreed reforms.

4. European Minister of Economy and Finance: a Communication on a European Minister of Economy and Finance spelling out its possible functions. Such a minister could serve as Vice-President of the Commission and chair the Eurogroup, as is possible under the current EU Treaties.

• Accelerating the Completion of the Banking Union: On the 11th of October 2017, the European Commission - ahead of the December Euro Summit - released a Communication on Accelerating the Completion of the Banking Union. The Commission is suggesting new measures to reduce non-performing loans and to help banks diversify their investments in sovereign bonds. On the risk-sharing side, the Commission proposes new steps to push for progress on the European Deposit Insurance Scheme (EDIS) in the European Parliament and the Council, which is supposed to guarantee citizens' deposits in the Banking Union at a central level, a missing element of the Banking Union. (More)

• Future of the Eurozone: On the 31st of May 2017, the European Commission put forward a Reflection Paper which sets out possible ways forward for the deepening of Europe's Economic and Monetary Union. The paper proposes to focus on steps in three key areas: 1) completing a genuine Financial Union; 2) achieving a more integrated Economic and Fiscal Union; 3) anchoring democratic accountability and strengthening euro area institutions. (More)

European Pillar of Social Rights

• Countering Precarious Working Conditions: On the 21st of December 2017, the European Commission has put forward a Proposal for a Directive on Working Conditions in the European Union, replacing the Written Statement Directive to include  the  estimated  2-3  million workers  currently  excluded  from  the  scope  of  the  Written Statement Directive. 

• Rules of Employment Contracts: On the 25th of September 2017, the European Commission has entered into further discussions with trade unions and employers' organisations at EU level on how to modernise the rules on employment contracts to include all types of workers. The Commission wants to broaden the scope of the current Directive on employment contracts (the so-called Written Statement Directive), extending it to on-demand workers, voucher-based workers and platform workers. (More)

• Work-Life Balance /  Working Time: On the 26th of April 2017, the European Commission presented a number of legislative and non-legislative initiatives related to work-life balance, the information of workers, access to social protection and working time. (Press release)

1. Legislative Proposal - Work-Life Balance for Parents and Carers:

The Proposal for a Directive on work-life balance for parents and carers sets a number of new or higher minimum standards for parental, paternity and carer's leave.

2. The Commission adopted a Clarification of the Working Time Directive of the European Parliament and the Council, providing guidance on how to interpret various aspects of this directive in line with a growing body of case law.

In addition, the Commission launched two social partner consultations:

3. The first consultation of the social partners concerns modernising the rules on labour contracts under Article 154 TFEU, possibly leading to a revision of the Written Statement Directive (Directive 91/533/EEC).

4. The second consultation of the social partners under Article 154 TFEU addresses a possible action with regard to the challenges of access to social protection for people in all forms of employment.

• Occupational Safety and Health / Carcinogens: On the 10th of January 2017, the European Commission presented a plan for reviewing the EU's Occupational Safety and Health (OSH) legislation and set out details on planned changes to the Carcinogens and Mutagens Directive to improve the health and the safety of workers. Measures for example include setting exposure limits for another seven cancer-causing chemicals and helping businesses, notably small and micro enterprises, in their efforts to comply with health and safety rules. (More)

Pillar of Social Rights

• European Pillar of Social Rights - Outline: On the 8th of March 2016 the European Commission presented a first, preliminary outline of the European Pillar of Social Rights announced by President Juncker in September 2015 and launched a broad public consultation on it. The European Pillar of Social Rights is part of the Commission's work to strengthen the Economic and Monetary Union. It will set out a number of essential principles to support well-functioning and fair labour markets and welfare systems within the euro area. (More)

• Use of Social Surveys for Social Policy: On the 24th of August 2016, the European Commission adopted a Proposal for a Regulation on new, integrated ways to collect and use data from social surveys so as to better support policy making in general and social policy in particular. (More)

European Bank Deposit Insurance Scheme / Completion of the Banking Union

•  Capital Requirements / Bank Recovery and Resolution: On the 23rd of November 2016, the European Commission put forward a reform proposals to strengthen the resilience of EU banks. The proposals build on existing EU banking rules and aim to complete the post-crisis regulatory agenda. The proposals amend the following pieces of legislation that spell out the rules on the recovery and resolution of failing institutions and establish the Single Resolution Mechanism: (press release)

1. a Proposal for a Regulation amending the Capital Requirements Regulation (CRR) adopted in 2013. 

2. a Proposal for a Directive amending the Capital Requirements Directive (CRD) adopted in 2013, setting out prudential requirements for credit institutions (i.e. banks), investment firms and rules on governance and supervision 

3. a Proposal for a Directive amending the Bank Recovery and Resolution Directive (BRRD) as regards the ranking of unsecured debt instruments in insolvency hierarchy 

4. a Proposal for a Regulation amending the Single Resolution Mechanism Regulation (SRMR) on the absorption and recapitalisation capacity for credit institutions and investment firms 

A Package on Deepening Economic and Monetary Union

• European Deposit Insurance Scheme: On the 24th of November 2015 the European Commission issued a Proposal for a Regulation to establish a Euro-Area wide Bank Deposit Insurance Scheme and set out further measures to reduce remaining risks in the banking sector in parallel. The aim of these measures is to strengthen the Banking Union, buttress bank depositor protection, reinforce financial stability and further reduce the link between banks and their sovereigns.(More)

• Representation of the Eurozone at the IMF: On the 21st of October 2015, the European Commission started implementing Stage 1 ("Deepening by doing") of completing the Economic and Monetary Union. Two legislative proposals are key: (press release) 

1. a Proposal for a Council Decision on establishing a common euro area representation at the IMF (International Monetary Fund)

2. a Commission Decision on establishing an independent advisory European Fiscal Board

• Five Presidents' Report: On the 22nd of June 2015, the European Commission presented the “Five Presidents Report” setting out plans to deepen the Economic and Monetary Union. The report puts forward concrete measures to be implemented in three stages starting in July 2015 until 2025 at the latest. A white paper assessing progress during the first stage and outlining the next steps is planned for Spring 2017.  (More) 

Fact Sheet

Compulsory Exchange of Information on Cross-Border Tax Rulings

• Mandatory exchange of information on cross-border tax rulings: On the 8th of December 2015, the Council Directive on mandatory, automatic exchange of information on cross-border tax rulings came into effect. In October 2015, member states had unanimously agreed the legislation at a meeting of Economic and Financial Affairs ministers in Luxembourg. The new rules should act as a deterrent from using tax rulings as an instrument for tax abuse. Member states will have to transpose the new rules into national law before the end of 2016. This implies that the Directive will come into effect on the 1st of January 2017. (More)

• Mandatory exchange of information on cross-border tax rulings: On the 18th of March 2015, the College of Commissioners presented measures to create more tax transparency as part of its agenda to tackle corporate tax avoidance and harmful tax competition in the EU. Member states are requested to agree on the Tax Rulings proposal by the end of 2015, so that it can enter into force on the 1st of January 2016. It includes the following measures: (press release)

1. a Proposal for a Council Directive on the mandatory automatic exchange of information between member states on their tax rulings

2. a Proposal to repeal the Savings Tax Directive (2003/48/EC), as this text has since been overtaken by more ambitious EU legislation 

Fact Sheet

Action Plan on Efforts to Combat Tax Evasion and Tax Fraud

• Corporate Taxation: On the 17th of June 2015, the  Commission presented its Action Plan for Fair Efficient Corporate Taxation in the EU. The Action Plan sets out measures to tackle tax avoidance, secure sustainable revenues and strengthen the Single Market. (More)

Fact Sheet

Difficulties of Enhancing the Eurozone’s Democratic Accountability – the Status of the European Commission’s Proposals by Maja Kluger-Dionigi No. 64 June 2019 (Download)

Eurozone Reform - a View from China by Jiang Yunfei No. 58 September 2018 (Download)

EMU Reform: What is the Road ahead? By Malin Berg von Linde No. 52 December 2017 (Download)

The Crisis Management of Central Banks by Dennis Flück No. 29 September 2015 (Download)

A Social Euro and Economic Dialogue: Conflicting Aims by Carla Manzanas No. 14 February 2015 (Download)

What challenges lie ahead of the new Vice-President for the Euro and Social Dialogue by Saša Mester No. 14 February 2015  (Download)

Juncker’s Priorities: A Deeper and Fairer Economic and Monetary Union by Volker Nitsch No.10 January 2015 (Download)