The House of Lords EU Committee reports on EU proposals to reinforce economic stability

The effect of the banking crisis on countries across the EU demonstrated the interconnection between the banking sector and public finances. It showed the degree to which economies in the European Union, and particularly the euro area, are interdependent.
In response the European Commission, supported by the European Council, have put forward a series of legislative proposals that would monitor and coordinate more closely economic policies between Member States. The Commission’s proposals focus on two elements: fiscal discipline and macroeconomic stability.

According to the House of Lords EU Committee report, supplementing the Commission’s proposals will be a permanent crisis resolution mechanism, created and funded by euro area Member States. The report is in favor of supporting the establishment of the European Stability Mechanism. This is essential to ensure that the markets act to discipline Member States with irresponsible fiscal policies. However, several issues remain unresolved,  including the question whether or not the time has come for euro bonds to be issued by the euro area as a whole rather than by individual members.

CASE contributed to the House of Lords EU Economic and Financial Affairs and International Trade Sub-Committee’s report The future of economic governance in the EU.

The House of Lords EU Committee reports on EU proposals to reinforce economic stability ahead of a European Council meeting on 24 and 25 March 2011.

For the full report, please see: parliament.uk