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This publication is produced by the General Secretariat of the Council.
www.european-council.europa.eu
Luxembourg: Publications Office of the European Union, 2011
ISBN 978-92-824-2804-7
doi:10.2860/64741
© European Union, 2011
Reproduction is authorised provided the source is acknowledged.
Printed in Belgium
PRINTED ON ECOLOGICAL PAPER
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The European Council in 2010
by the president of the European Council
Around the table
5
Preserving the stability of the eurozone
6
Creating jobs and growth
9
Setting the Union’s course in the world
11
Working together
14
Looking ahead
19
Conclusions of the European Council
and statements by heads of state or government
21
The European Council, October 2010
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It is now over a year since I took office as the first permanent president of the European
Council. Our institution brings the Union’s highest executive leaders around the
table: the 27 heads of state or government of the member states, the president of the
Commission, and the president of the European Council. This strategic body does not exercise legislative functions.
Together we establish political priorities, we set the Union’s strategic course and we take responsibility in crisis situations.
The European Council in 2010 covers our activities in 2010. It has been an eventful year. The stability of the eurozone, the
state of our economies and the role of the European Union in the world required our utmost attention.
On 1 December 2009, when the Lisbon Treaty entered into force, the European Council formally became a fully fledged
institution. It also acquired a permanent president, elected for a term of two and a half years, renewable once. The new
set-up was decided to give more coherence and continuity to the Union’s work. The first year has proven that this idea
was worthwhile.
In our meetings, only the leaders and the High Representative for Foreign Affairs and Security Policy take part in the
work. This allows an open and lively debate. With about thirty people around an oval table, one can see eye-to-eye
(or just about). An exchange of views with the president of the European Parliament often precedes the meeting. The
president of the European Central Bank is sometimes invited. Over time, we get to know each other very well. In
the course of 2010, we welcomed six new colleagues, and said goodbye to former ones, after government changes in
the United Kingdom, Hungary, Finland, the Czech Republic, Slovakia and the Netherlands. These get-togethers are
essential for building relationships amongst Europe’s heads of state or government. Only trust between persons can
establish a shared sense of direction.
In 2010, we had six European Council meetings between 11 February and 16-17 December, one informal and five
formal. There were also two meetings of the heads of state or government of the eurozone, which I chaired, one in the
timeframe of the March European Council, the other as a separate meeting in May. I will always remember the first
meeting I chaired, not in the usual Council premises but in the Solvay Library: snow outside, bold deal-making inside.
The annual number of meetings may vary, with a Treaty-required minimum of four; in 2009 there were six and in
2008 seven. Because of their relatively low frequency and high political intensity, meetings attract a lot of public
attention. They make the Union of 27 very visible. For the same reasons, careful preparations are necessary.
This involves many people and institutions in Brussels and the 27 capitals. The role of the General Affairs Council is
important in bringing together results achieved by the various ministers' meetings.
The president’s task is to prepare, chair and lead the meetings of the European Council, to seek consensus among
the members, and to make sure that the decisions we take are subsequently put into practice. Together with the
Commission president, the European Council president acts as the Union’s representative, at his level, in relations with
third countries.
Even if the institution does not exercise legislative functions, the political authority of the European Council's
conclusions and statements by heads of state or government is well recognised.
Just like a ‘summit’, which is only reached at the end of a long journey, a European Council meeting may suddenly open
new vistas. It is both the end of a process and the start of new beginnings.
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The year 2010 was dominated by the public debt crises
in the eurozone. The issue was on the agenda for all
our meetings. Even if only sixteen member states share
the single currency (in the meantime seventeen, since
Estonia joined on 1 January 2011), all 27 members are
fully convinced that the stability of the eurozone is in
the core interest of the Union as a whole. The decisions
we have taken, notably in May, October and December,
constitute the biggest reform of the Economic and
Monetary Union since the euro was created.
The public debt crises within the eurozone were an
unexpected turn in the greater and global financial and
economic roller-coaster which began in August 2007
and reached an international height with the collapse
of Lehman Brothers. Although the risk of an economic
depression across the whole of Europe proved to
be short-lived – thanks to strong and coordinated
interventions, most member states were back on the
path to growth within a year –, another threat came to
light with the Greek government's financing problems,
late in 2009.
At the February 2010 meeting of the European Council
we agreed on the principle of taking action if needed to
safeguard the stability of the eurozone as a whole and to
help Greece. In March, we agreed on the key features
of that possible support. It was only in late April – in
view of our allegedly lengthy decision-making process,
it may be worthwhile to recall this sequence –,
that our Greek colleague for the first time asked for
support. Then things moved quickly. On 2 May a
deal was reached among finance ministers which was
endorsed by the heads of state or government of the
eurozone on 7 May. It provided a 110 billion euro loan
safety package (80 billion from the EU and 30 billion
from the International Monetary Fund). Together with
the courageous austerity measures taken by the Greek
government itself, this stabilised the situation for Greece.
Decisive dinner
By the first week of May events had accelerated. It was
clear that we needed to go beyond an ad hoc decision
for one country and towards a systemic mechanism.
The problem of one country became a problem for
the eurozone as a whole, and even a threat to the
global recovery. That’s why the special summit of the
sixteen heads of state or government of the eurozone
– scheduled on 7 May to adopt the Greek package
and look forward – unexpectedly became one of those
decisive dinners which seem to be the secret of the
Union's success. After midnight, the leaders of the
sixteen eurozone countries agreed to use ‘all means
available’ to safeguard the stability of the euro. These
were not empty words. Within 48 hours, following
the request of the heads of state or government, the
European Commission made a proposal, the ministers
of finance agreed upon an ad-hoc crisis mechanism:
a system of conditional loans of 750 billion euro, which
is now in place and will last until mid-2013. Several
member states announced immediate extra budgetary
measures and economic reforms. The European Central
Bank took the unprecedented step of buying bonds on
secondary markets to prevent disruption in the market.
This joint effort showed that the Union’s capacity to act
is beyond doubt.
In the spring crisis, as I said in a speech on 25 May, ‘we
built a lifeboat at sea’. In a stormy situation, that was
no mean feat. However, it was clear to all of us that we
needed to draw the right lessons for the future: both to
prevent such a crisis where possible and to enhance our
capacity to deal with a crisis. That twin goal has been the
European Council’s priority in the second half of 2010.
We have done what needed to be done.
Already in our March meeting, the European Council
established a task force on economic governance to
draw the lessons of the crisis and to present proposals
before the end of the year. As European Council
president I was asked to chair it, working closely with
the Commission and with representatives from the
member states, the European Central Bank and the
president of the Eurogroup. The contribution of the
Commission was key. In May, as urgency was added to
necessity, we stepped up the task force’s work. Thus the
European Council was able to be consulted on progress
in June and September. It is in my view very positive
that already in our 28-29 October meeting the European
Council endorsed the task force's full report. This is a
huge leap forward.
Common duty
Two sets of decisions stand out in terms of crisis
prevention. Firstly, a stronger stability and growth
pact: this will substantially increase fiscal responsibility.
Sanctions will kick in earlier and progressively, on more
grounds (taking into account public debt alongside the
annual deficit), and be decided more easily, thanks to
the so-called reverse majority vote (in which a proposal
of the Commission is adopted unless rejected by a
qualified majority of member states). Secondly, a new
form of macro-economic surveillance: this will allow us
to better monitor the economies of our countries, their
competitiveness, the risks of housing bubbles and other
vulnerabilities. We will act and correct if necessary.
The legislative follow-up to these recommendations
will proceed in accordance with regular procedures,
involving the Commission, the Council of ministers and
the European Parliament, but at a faster pace so as to
have the new surveillance in place by summer 2011.
It is our common duty.
The third important decision flowing from the task
force’s work concerns our capacity to deal with a crisis.
In October, the European Council decided to establish
a permanent crisis mechanism to safeguard the financial
stability of the eurozone as a whole. The mechanism
decided in May is temporary. In the last meeting of the
year, we agreed on the text of the limited Treaty change
required to achieve the goal. It will provide a firm legal
anchor for the permanent mechanism.
The European Council also endorsed the mechanism's
general features, as agreed by the finance ministers.
Moreover, in December 2010, the sixteen heads of
state or government of the eurozone and the European
Union institutions reaffirmed their determination to do
whatever is required to ensure the stability of the euro
area as a whole.
In difficult times, the invisible and often underestimated
forces which hold our Union together come to
light, as the sovereign debt crisis confirmed once
more. The members of the European Council have
defended their collective decisions vigorously in their
national parliaments. We acted upon the principles of
responsibility and solidarity enshrined in the Lisbon
Treaty, to the benefit of our citizens. The strong political
bonds between the members of the Union have been
confirmed.
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Many short-term problems arise because not enough
attention is paid to long-term structural reform.
Other major economies race ahead in terms of
competitiveness, research and labour skills. Jobs and
growth in Europe are at stake. That is why the European
Council devoted its March and June meetings to
preparing ‘Europe 2020’, an ambitious ten-year strategy
for jobs and growth.
In workplaces all over the continent, people feel both
the thrill and the pressure of international competition:
this is the challenge of globalisation. In cities and villages
from Finland to Italy, homes for the elderly replace
kindergartens: the challenge of demography. In the
south of the continent, the Sahara is about to leap into
Spain, in the north tundras are thawing and in the centre
alpine glaciers melting: the challenge of climate change.
Any economic strategy needs to deal with this triple
challenge. As a most comprehensive response, the
‘Europe 2020’ strategy involves structural reforms in the
member states and enhanced coordination of economic
policies and macro-economic surveillance. The overall
aim is to achieve durable growth and employment,
while ensuring sustainable public finances. The policies
to be implemented are largely in the realm of national
responsibilities. Yet it is very important to have a
common strategy and a consistent approach, not least to
increase peer pressure and strengthen political resolve.
The European Council in June adopted this European
strategy. We decided to set five realistic and quantifiable
headline targets for the European Union as a whole, to
be achieved by 2020:
–
the employment rate for women and men;
–
the investment level in research and development;
–
the efforts to reduce the risk of global warming;
–
education levels, both in terms of fewer school
drop-outs and more university diplomas;
–
the number of people lifted out of poverty and
exclusion.
Real-life commitment
Each government will present its own proposals to reach
its national contribution to those five overall targets.
Each will also identify obstacles to growth and the
means to remove them. A close involvement of regional
and local authorities as well as of business and labour
organisations and civil society will increase the sense of
ownership and responsibility. This will help us move
from paper targets to real-life commitment. The Social
Summit on the day of the March and October European
Council meetings proved in 2010 to be an important
forum for dialogue on such matters.
To further improve the resilience of our economies,
drawing on the lessons from the financial crisis, the
European Council gave a strong impetus to the
ambitious reform of the supervision and regulation
of the financial system. This involved the creation of a
European Systemic Risk Board and three new European
Supervisory Authorities, which took up their duties
on 1 January 2011. In June 2010, we agreed that
member states should introduce systems of levies and
taxes on financial institutions so that they make a fair
contribution to the costs of containing systemic risk
in the financial sector. In the same meeting, we also
decided that the stress tests of major European banks,
ongoing at the time, should be made public in order to
enhance transparency.
The destinies of the world’s main economies are
more intertwined than ever before. A number
of issues that have an impact upon the European
economy will continue to require attention at a global
level. These include risks to financial sustainability,
high unemployment, volatile commodity prices
and macroeconomic imbalances. To address these
challenges, the European Council carefully prepared the
EU position for the G-20 summits of Toronto (June)
and Seoul (November).
Green growth
Tackling climate change - an issue of major public
concern - is another important element of the Union’s
sustainable growth strategy. In the run-up to the
United Nations Conference in Cancún in December,
the European Council defined an ambitious and
constructive position, which contributed to its
successful outcome. We also encouraged regional
initiatives to tackle climate change and promote green
growth. In parallel, important work remains to be done
at home, in creating green jobs and green growth.
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Heads of state or government have an important role
to play in external relations: together defining strategic
interests, deciding priorities and giving strategic
guidance, both in ʻthe common foreign and security
policy and [in] other areas of the external action of the
Union’, as the EU Treaty puts it.
We are not starting from scratch. The European Union
is a major trading power and the largest donor of
development aid in the world, it plays a stabilising role
in its neighbourhood and has in past years launched
a number of civil and military crisis management
missions. However, we could do more collectively to
translate financial and economic clout into political
influence. That's why the September European Council
was dedicated to foreign policy and in particular to
our global strategic partnerships. In December, we
continued this strategic reflection, with a special focus
on the United States, Russia and China, on the basis of
work conducted so far by our High Representative.
By involving all players at the highest level, the European
Council can encourage the necessary synergies between
national diplomacy and our common external service,
thus gradually building a European diplomatic culture.
More important at this stage than the ritual 'speaking
with one voice', it is imperative to deliver common key
messages.
In the September discussion, all colleagues also agreed
that we have to strive for reciprocity and find mutual
interests in dealings with global partners. The EU
has a certain number of cards which we can only play
together, for instance in granting increased market access
or a more attractive visa regime.
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operation Atalanta
The bilateral summits between the Union and key
partners have benefitted from the European Council’s
stronger involvement. Thanks to better preparation at
this level, and to an agreement between the president of
the Commission and myself on how best to represent
the Union in various international meetings, the
Commission president and I can truly speak (and listen)
on behalf of the 27.
Mutual benefits
It is only the beginning of a process, yet the bilateral
summits in the autumn started to show a difference.
On 6 October we established a strategic partnership
with South Korea, shortly after an important trade
deal was concluded with the country. At the EU-US
summit of 20 November, we reconfirmed with president
Obama the significance of the transatlantic relationship
and opened new avenues for cooperation on growth,
jobs and security. A breakthrough, in the meeting
with president Medvedev on 7 December, was the
agreement with Russia on its WTO accession; this will
also help our neighbour with its modernisation plans,
which are in the EU's strategic interest. In the summit
with Ukraine, we were able to welcome a step toward
visa liberalisation and progress towards an association
agreement. The summit with India on 10 December
showed good prospects for an ambitious and balanced
free trade agreement. Even a meeting with allegedly
fewer achievements, the EU-China summit in early
October, proved interesting because of our resolve to
ensure reciprocity and mutual benefits.
I also took part in the NATO summit of
19-20 November in Lisbon, where the importance of
EU-NATO relations was underlined, and in the OSCE
summit of early December in Astana.
Throughout the year, some events with considerable
impact required our attention. The June European
Council reached an agreement amongst the 27 for
sanctions aimed at ensuring that Iran's nuclear programme
remains a strictly civilian one. It is in Europe’s core
strategic interest to remove the concerns over the
nature of this programme. The sanctions we agreed
have strengthened the influence of the UN Security
Council resolution. This was not easy. The result
has been remarkable. Our decision convinced other
major economies to follow suit, thus strengthening the
incentives for Iran to come back to the negotiating table.
In the September meeting, a month after the devastating
floods which had struck the country, we decided to give
Pakistan maximum support. With increased market
access, the Union could offer ‘more aid and more trade’.
In September, the European Council discussed the
relationships with the Union’s eastern and southern
neighbours. The European Council will in the near
future take up the Union's relations with the Western
Balkans, a region which I visited twice in 2010; we
have confirmed the Western Balkans' European
perspective, for instance by giving Montenegro the
status of candidate country in our December meeting.
In the course of the year, I had four meetings with
the Ukrainian president, including the November
summit. As regards the few neighbours we have on the
north-west side of the continent, Iceland has knocked
at our door, and the June European Council took the
important decision to open accession negotiations.
With the new political and diplomatic means provided
by the Lisbon Treaty, the European Council has
shown in 2010 its readiness to act in the field of foreign
relations.
Summits with third countries
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First semester of 2010, Spain chairs the Council of ministers of the EU
The Lisbon Treaty has provided the European Union
with a renewed institutional setting. The Commission
continues to plays its central role as initiator of
legislative proposals and guardian of the Treaties. The
Parliament has become the Council's equal partner in
the legislative process, playing its due role as the citizens'
representative. The European Council, which previously
gave its strategic guidelines from the sidelines of the
formal institutional framework, has had to define its new
place under the Lisbon sun. The challenge on
1 December 2009 was to translate provisions which for
two years had only existed on paper into a living reality.
That takes time. Embodying new functions, developing
new habits, filling in some grey areas requires careful
attention. No treaty text, however detailed, can define all
paths in advance.
The main elements of relations between our institution
and the others are determined by the Treaty. The fact,
for instance, that the president of the Commission is
a member of the European Council creates a vital link
between our two institutions, between the impetus from
the capitals and the ideas and expertise from within the
Brussels institutions. The Treaty also provides that the
president of the European Parliament may be invited
to be heard by the European Council and that the
president of the European Council shall present a report
to the Parliament after each meeting of the European
Council. This resulted in a number of lively debates
in the course of 2010. For their part, depending on
national practices, individual members of the European
Council also report back to their parliaments. All this
Second semester of 2010, Belgium chairs the Council of ministers of the EU
provides for the vital democratic legitimacy of our
actions. Our gathering is like a weaving of institutional
threads, tying national and European politics together
into a common fabric.
Good personal relations between the main actors
are always essential for success. That is why, from the
first day of my mandate, I endeavoured to establish
informal and structural contacts with the Commission
and its president José Manuel Barroso, with High
Representative Catherine Ashton and with the
European Parliament and its president Jerzy Buzek.
It has also been a pleasure to work with the two rotating
Council Presidencies of 2010 - the first six months with
Spanish Prime Minister José Luis Rodríguez Zapatero,
who helped to ensure a fine transition to the new system,
and the second six months with Belgian Prime Minister
Yves Leterme. In a spirit of cooperation, respect and a
sense of shared responsibility between the institutions
and between the member states and the institutions,
the Lisbon Treaty can be what it is meant to be: an
instrument to strengthen the European Union's capacity
to safeguard the security and prosperity of our citizens.
The momentous decisions we have been able to take
in 2010 regarding the monetary union show that this is
possible.
Nevertheless, it has been said in certain Brussels circles
that the new role of the European Council has increased
the influence of national governments at the expense
of the EU institutions, thereby allegedly weakening
the effectiveness and the democratic legitimacy of
The president of the
European Council with the president
of the European Commission
the Union's decisions. This is strange, for a number
of reasons. The European Council includes 27
democratically legitimate heads of state or government.
It is now an integrated part of the formal framework,
with all its checks and balances.
The so-called Community method is and will be the
central way of adopting European policy and legislation.
Yet this method, in all its variations, can only apply in
areas where the Union has the competence to act and
cannot be applied in fields of national competence.
However, European coordination is sometimes
indispensable in those areas. The economic and
financial crisis has shown this clearly.
Génie européen
That is why often the choice is not between the
Community method and the intergovernmental
method, but between a coordinated European position
and nothing at all. The European Council, as the body
bringing together the strengths of the member states and
the qualities of our common institutions, is well placed
to contribute to this coordinated European position,
working closely with all the Union’s institutions and
bearing in mind that the member states are not outside
of it but form its constituent parts.
In the European Union, we are often caught between
'the one' and 'the many', between 'the whole' and 'the
parts'. This tension is part of our identity. The génie
européen is to invent ever new ways to deal with this
tension. That's what politics is about. Speaking at the
College of Europe in Bruges last November, chancellor
Angela Merkel characterised this way of working
together as the 'Union method'. In the true spirit of the
Lisbon Treaty, all the Union's energies and competences
must be mobilised. It is the only way to deal with the
challenges which we face, in 2011 and beyond.
The president of the
European Council in the
European Parliament
Members of the European Council in their national parliament
The European Council, December 2010
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In 2011, the European Council will start by taking up
the prospects for economic growth. We will have a
debate, on 4 February, on the twin themes of innovation
and energy. These themes touch upon the great societal
challenges of our time: attractive jobs, healthy aging, a
green and low-carbon economy, secure energy supply.
In the March meeting, we will for the first time assess
the progress each country has made with the EU2020
strategy for growth and jobs. Following the new macroeconomic surveillance decided in 2010, we will also give
strategic guidance on economic policies. I am looking
forward to working with the prime ministers of Hungary
and Poland, the countries chairing the Council of
ministers in the first and second half of 2011.
As regards international relations, we will continue the
strategic dialogues with our global partners, building
upon recent experience and with the External Action
Service now fully playing its role. An important question
this year will be whether the global shift in power toward
emerged economies will be accompanied by a shift in
global responsibilities as well. Europe can only be strong
if we are united. In the field of foreign affairs, where
geography and history play an important role, it will
require trust – and therefore time – to move forward
with 27 states. But in geopolitics as in life, patience can
be a virtue. Therefore the priority for the years ahead is
to establish a shared sense of direction.
Beyond our long-term economic agenda and a general
strategic course, one cannot predict individual events.
That's why in 2011 the European Union will surely have
to show, in matters internal as well as external, that the
Lisbon framework has enhanced one essential political
quality: our capacity to cope with the unexpected. The
European Council is ready to do so.
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11 February 2010
23
Statement by the heads of state or government of the euro area,
25 March 2010
24
European Council, 25-26 March 2010
25
Statement by the heads of state or government of the euro area,
7 May 2010
29
European Council, 17 June 2010
30
European Council, 16 September 2010
35
European Council, 28-29 October 2010
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European Council, 16-17 December 2010
42
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All euro area members must conduct sound national policies in
line with the agreed rules. They have a shared responsibility for the
economic and financial stability in the area.
In this context, we fully support the efforts of the Greek government
and their commitment to do whatever is necessary, including
adopting additional measures to ensure that the ambitious targets
set in the stability programme for 2010 and the following years
are met. We call on the Greek government to implement all these
measures in a rigorous and determined manner to effectively reduce
the budgetary deficit by 4% in 2010.
Commission’s proposal and the additional measures Greece has
announced.
The Commission will closely monitor the implementation of the
recommendations in liaison with the ECB and will propose needed
additional measures, drawing on the expertise of the IMF. A first
assessment will be done in March.
Euro area Member states will take determined and coordinated
action, if needed, to safeguard financial stability in the euro area as
a whole. The Greek government has not requested any financial
support.
We invite the Ecofin Council to adopt at its meeting of the 16th
of February the recommendations to Greece based on the
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We reaffirm that all euro area members must conduct sound
national policies in line with the agreed rules and should be aware
of their shared responsibility for the economic and financial stability
in the area.
We fully support the efforts of the Greek government and welcome
the additional measures announced on 3 March which are sufficient
to safeguard the 2010 budgetary targets. We recognize that the
Greek authorities have taken ambitious and decisive action which
should allow Greece to regain the full confidence of the markets.
The objective of this mechanism will not be to provide financing
at average euro area interest rates, but to set incentives to return
to market financing as soon as possible by risk adequate pricing.
Interest rates will be non-concessional, i.e. not contain any subsidy
element. Decisions under this mechanism will be taken in full
consistency with the Treaty framework and national laws. We
reaffirm our commitment to implement policies aimed at restoring
strong, sustainable and stable growth in order to foster job creation
and social cohesion.
The consolidation measures taken by Greece are an important
contribution to enhancing fiscal sustainability and market
confidence. The Greek government has not requested any financial
support. Consequently, today no decision has been taken to activate
the below mentioned mechanism.
Furthermore, we commit to promote a strong coordination of
economic policies in Europe. We consider that the European
Council must improve the economic governance of the European
Union and we propose to increase its role in economic coordination
and the definition of the European Union growth strategy.
In this context, Euro area member states reaffirm their willingness
to take determined and coordinated action, if needed, to safeguard
financial stability in the euro area as a whole, as decided the
11th of February.
The current situation demonstrates the need to strengthen and
complement the existing framework to ensure fiscal sustainability
in the euro zone and enhance its capacity to act in times of crises.
For the future, surveillance of economic and budgetary risks and
the instruments for their prevention, including the Excessive Deficit
Procedure, must be strengthened. Moreover, we need a robust
framework for crisis resolution respecting the principle of member
states’ own budgetary responsibility.
As part of a package involving substantial International Monetary
Fund financing and a majority of European financing, Euro area
member states, are ready to contribute to coordinated bilateral loans.
This mechanism, complementing International Monetary Fund
financing, has to be considered ultima ratio, meaning in particular
that market financing is insufficient. Any disbursement on the
bilateral loans would be decided by the euro area member states
by unanimity subject to strong conditionality and based on an
assessment by the European Commission and the European
Central Bank. We expect Euro-Member states to participate on
the basis of their respective ECB capital key.
We ask the President of the European Council to establish, in
cooperation with the Commission, a task force with representatives
of Member States, the rotating presidency and the ECB, to present
to the Council, before the end of this year, the measures needed to
reach this aim, exploring all options to reinforce the legal framework.
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The European Council discussed the European Union’s new strategy for jobs and growth. It agreed on its main elements,
including the key targets which will guide its implementation and arrangements for its improved monitoring. Heads of
State or government also held an exchange of views on competitiveness, a critical aspect of Europe’s growth prospects,
and discussed the state of preparation for the next G20 Summit. On climate change, the European Council agreed that it
is now necessary to bring a new dynamic to the negotiation and mapped out the next steps.
I.
EUROPE 2020: A NEW EUROPEAN
STRATEGY FOR JOBS AND GROWTH
1.
Over the last two years, we have faced the world’s worst
economic crisis since the 1930s. This crisis has reversed
much of the progress achieved since 2000. We are now
facing excessive levels of debt, sluggish structural growth,
and high unemployment. The economic situation is
improving, but the recovery is still fragile.
2.
Restoring macroeconomic stability and returning public
finances on a sustainable path are prerequisites for growth
and jobs. As agreed in December 2009, the exit from the
exceptional support measures adopted to combat the crisis,
once recovery is fully secured, will be important in that
respect.
3.
Structural reforms are essential for a strong and sustainable
recovery and for preserving the sustainability of our social
models. Jobs and social welfare are at stake. If we do not
act, Europe will lose ground. The European Council’s
responsibility is to show the way ahead.
4.
− improving the conditions for research and development,
in particular with the aim of bringing combined public
and private investment levels in this sector to 3% of GDP;
the Commission will elaborate an indicator reflecting
R&D and innovation intensity;
− reducing greenhouse gas emissions by 20% compared
to 1990 levels; increasing the share of renewables in final
energy consumption to 20%; and moving towards a 20%
increase in energy efficiency;
the EU is committed to take a decision to move to
a 30% reduction by 2020 compared to 1990 levels
as its conditional offer with a view to a global and
comprehensive agreement for the period beyond
2012, provided that other developed countries commit
themselves to comparable emission reductions and that
developing countries contribute adequately according
to their responsibilities and respective capabilities;
− improving education levels, in particular by aiming to
reduce school drop-out rates and by increasing the share
of the population having completed tertiary or equivalent
education; taking into account the Commission’s
proposal, the European Council will set the numerical
rates of these targets in June 2010;
The EU needs a new strategy, based on an enhanced
coordination of economic policies, in order to deliver
more growth and jobs. Following the Commission’s
communication “Europe 2020: a strategy for smart,
sustainable and inclusive growth” and the discussions
held in the Council, the European Council agreed on
the following elements of this new strategy, which will be
formally adopted in June.
5.
Our efforts need to be better focused in order to boost
Europe’s competitiveness, productivity, growth potential
and economic convergence:
a)
The new strategy will focus on the key areas where action
is needed: knowledge and innovation, a more sustainable
economy, high employment and social inclusion.
b)
The European Council agreed on the following headline
targets, which constitute shared objectives guiding the
action of the Member States and of the Union:
− aiming to bring to 75% the employment rate for women
and men aged 20-64, including through the greater
participation of youth, older workers and low skilled
workers and the better integration of legal migrants;
− promoting social inclusion, in particular through
the reduction of poverty. Further work is needed on
appropriate indicators. The European Council will revert
to this issue at its June 2010 meeting.
These targets cover the main areas where efforts are rapidly
needed. They are interrelated and mutually reinforcing. They
will help measure progress achieved in implementing the
strategy.
While some of these targets are reflected in EU legislation,
the others are not of a regulatory nature and do not imply
burden-sharing; they represent a common aim to be
pursued through a mix of national and EU level action.
c)
In the light of the headline targets, Member States will
set their national targets, taking account of their relative
starting positions and national circumstances. They will do
so according to their national decision-making procedures,
in a dialogue with the Commission in order to check
consistency with the EU headline targets. The results of
this dialogue will be examined by the Council by June 2010.
d)
The new strategy will address the main bottlenecks
constraining growth at national and at EU level, including
those related to the working of the internal market and
infrastructure.
e)
The Member States will draw up National Reform
Programmes setting out in detail the actions they will
undertake to implement the new strategy, with a particular
emphasis on efforts to meet the national targets as well as
on measures to lift the bottlenecks that constrain growth
at the national level.
f)
The Commission will further develop and submit to the
Council the actions it proposesto take at the EU level,
notably through the flagship initiatives.
g)
All common policies, including the common agricultural
policy and cohesion policy, will need to support the strategy.
A sustainable, productive and competitive agricultural
sector will make an important contribution to the new
strategy, considering the growth and employment potential
of rural areas while ensuring fair competition. The European
Council stresses the importance of promoting economic,
social and territorial cohesion as well as developing
infrastructure in order to contribute to the success of the
new strategy.
h)
The strategy will include a strong external dimension, to
ensure that EU instruments and policies are deployed to
promote our interests and positions on the global scene
through participation in open and fair markets worldwide.
6.
Efficient monitoring mechanisms are key for the successful
implementation of the strategy:
a)
Building on the monitoring by the Commission and the
work done in the Council, the European Council will, once
a year, make an overall assessment of progress achieved both
at EU and at national level in implementing the strategy.
The development of productivity is an essential indicator of
progress. Macroeconomic, structural and competitiveness
developments will be considered simultaneously, together
with the assessment of overall financial stability, based on
input from the European Systemic Risk Board.
b)
c)
The European Council will regularly hold debates dedicated
to economic developments and the main priorities of the
strategy. In October 2010, it will discuss research and
development, in particular looking at how to boost Europe’s
innovation potential in the light of current challenges. In
early 2011 it will discuss energy policy, including how it
can best support the shift towards an efficient low-carbon
economy and greater security of supply.
Overall economic policy coordination will be
strengthened by making better use of the instruments
provided by Article 121 of the Treaty (TFEU).
d)
Coordination at the level of the eurozone will be
strengthened in order to address the challenges the euro
area is facing. The Commission will present by June 2010
proposals in that respect, making use of the new instruments
for economic coordination offered by Article 136 of the
Treaty (TFEU).
e)
The EU needs to focus on the pressing challenges of
competitiveness and balance of payments developments.
The European Council will revert to this issue in June 2010.
f)
The timing of the reporting and assessment of the National
Reform Programmes and Stability and Convergence
Programmes should be better aligned, in order to enhance
the overall consistency of policy advice to Member States.
These instruments will however be kept clearly separate.
The integrity of the Stability and Growth Pact will be fully
preserved, as will the specific responsibility of the ECOFIN
Council in overseeing its implementation.
g)
A close dialogue between Member States and the
Commission will help increase the quality of surveillance
and promote the exchange of best practices. This could
include bringing together experts from the Commission
and the Member States to review the situation.
h)
Ensuring the quality, reliability and timeliness of statistical
data provided by national statistical offices will be central in
ensuring credible and effective monitoring. Rapid decision
is required on the Commission’s proposals in this field.
i)
Close cooperation will be maintained with the European
Parliament and other EU institutions. National parliaments,
social partners, regions and other stakeholders will be
involved, so as to increase ownership of the strategy.
7.
The European Council asks the President of the European
Council to establish, in cooperation with the Commission,
a task force with representatives of the Member States, the
rotating presidency and the ECB, to present to the Council,
before the end of this year, the measures needed to reach
the objective of an improved crisis resolution framework
and better budgetary discipline, exploring all options to
reinforce the legal framework.
8.
Rapid progress is required on the strengthening of financial
regulation and supervision both within the EU and in
international fora such as the G20, while ensuring a levelplaying field at the global level. Progress is particularly
needed on issues such as capital requirements;
systemic institutions; financing instruments for crisis
management; increasing transparency on derivative markets
and considering specific measures in relation to sovereign
credit default swaps; and implementation of internationally
agreed principles for bonuses in the financial services sector.
The Commission will shortly present a report on possible
innovative sources of financing such as a global levy on
financial transactions.
9.
10.
This requires that the EU make rapid progress on all these
issues internally. In particular, work on the new European
supervisory framework needs to be concluded in time for
the European Systemic Risk Board and the three European
Supervisory Authorities to begin work in early 2011.
c)
The European Council remains firmly committed to the
UNFCCC process. It supports ongoing efforts to make
it more effective. Given the short time available before
Cancun, this process could usefully be complemented and
supported by discussions in other settings and on specific
issues.
d)
The EU will strengthen its outreach to third countries. It
will do so by addressing climate change at all regional and
bilateral meetings, including at summit level, as well as other
fora such as the G20. The Presidency and the Commission
will engage in active consultations with other partners and
rapidly report back to the Council.
e)
Opportunities for cooperation, including with industrialised
partners, need to be exploited in areas such as green
technologies and norms and verification techniques.
The Council and the Commission will report back on
these issues to the June 2010 European Council, ahead of
the Toronto Summit.
II.
CLIMATE CHANGE: REFOCUSING OUR
EFFORTS AFTER COPENHAGEN
11.
A global and comprehensive legal agreement remains the
only effective way to reach the agreed objective of staying
below 2°C increase in global temperatures compared to
preindustrial levels. On the basis of the conclusions reached
by the Council on 15 and 16 March 2010, and taking note
of the Commission’s communication of 9 March 2010, it is
now necessary to bring a new dynamic to the international
negotiation process.
12.
A stepwise approach should be followed, building on the
Copenhagen Accord, which should be swiftly implemented:
a)
As a first step, the next meetings in Bonn should set the
roadmap for taking the negotiations forward. The focus
should be on integrating the political guidance of the
Copenhagen Accord into the various negotiating texts.
b)
The COP-16 in Cancun should at least provide concrete
decisions anchoring the Copenhagen Accord to the
UN negotiating process and addressing remaining gaps,
including as regards adaptation, forestry, technology and
monitoring, reporting and verification.
13.
The EU is prepared to play its part in this process:
a)
The EU and its Member States will implement their
commitment to provide EUR 2.4 billion annually over
the 2010-2012 period for fast-start financing, alongside
contributions by other key players and in the framework of
the implementation of the Copenhagen Accord. The swift
implementation of this commitment will be crucial. To that
end, the EU will initiate consultations on practical ways to
implement fast start funding in specific areas. The EU and
its Member States will present a preliminary state of play
of their commitments at the May/June 2010 UNFCCC
session and submit coordinated reports on implementation
in Cancun and thereafter on an annual basis.
b)
as the overall balance of the global effort to tackle climate
change.
The EU and other developed countries have committed
to jointly mobilise USD 100 billion per year by 2020 to
help developing countries fight climate change. Financial
contributions in the longer term need to be seen in the
context of meaningful and transparent actions to be taken
by developing countries to mitigate climate change as well
Common interests with emerging countries on issues which
could create leverage in the climate change debate should
be rapidly identified.
14.
There is an urgent need to reverse continuing trends of
biodiversity loss and ecosystem degradation. The European
Council is committed to the long term biodiversity
2050 vision and the 2020 target set out in the Council’s
conclusions of 15 March 2010.
15.
The President of the European Council announced that he
would convene a special meeting of the European Council
in September 2010, in the presence of the Ministers of
Foreign Affairs, in order to discuss how the Union can better
engage with its strategic partners on global issues.
—
The European Council appointed Mr Vítor Constâncio as VicePresident of the ECB.
It also endorsed the Internal Security Strategy.
—
ANNEX
NEW EUROPEAN STRATEGY FOR JOBS
AND GROWTH NEXT STEPS
a)
Taking account of the EU headline targets, the Commission
will rapidly present, in accordance with the Treaty, its
proposals for more focused integrated guidelines, including
the employment guidelines and the broad economic policy
guidelines. The guidelines will be discussed by the Council
so that, after the consultation of the European Parliament
and other institutions on the employment guidelines, they
can be endorsed by the June 2010 European Council.
b)
c)
The main bottlenecks constraining growth at EU level are
being identified by the Commission and will be discussed
by the Council; the same will be done by the Member States
at their level, in close cooperation with the Commission.
The June 2010 European Council will take stock of this
work, so that it can be taken into account in the drawing
up of the National Reform Programmes.
The national targets, as set out in paragraph 5c) of these
conclusions, should be submitted in time to be taken
into account in the drawing up of the National Reform
Programmes.
d)
In this first year of the new strategy, the Member States
will present their National Reform Programmes in the
Autumn 2010, setting out in detail the actions they will
undertake to implement the strategy. These should be
fully supported by mobilising all relevant EU instruments,
including innovative financing instruments in cooperation
with the EIB Group, as incentives for reform.
e)
The Commission will present by October 2010 the actions
required at EU level to implement the new strategy, notably
through the flagship initiatives.
f)
The Council will better align the timing of processes with a
view to enhancing the overall consistency of policy advice
to Member States.
6WDWHPHQWE\WKHKHDGVRI VWDWHRUJRYHUQPHQW
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1.
Implementation of the support package for Greece
In February and in March, we committed to take determined and
coordinated action to safeguard financial stability in the euro area
as a whole.
Following the request by the Greek government on April 23 and
the agreement reached by the Eurogroup on May 2, we will provide
Greece with 80 billion euros in a joint package with the IMF of
110 billion euros. Greece will receive a first disbursement in the
coming days, before May 19.
The programme adopted by the Greek government is ambitious
and realistic. It addresses the grave fiscal imbalances, will make the
economy more competitive, and will create the basis for stronger
and more sustainable growth and job creation.
—
Second, we fully support the ECB in its action to ensure
the stability of the euro area.
—
Third, taking into account the exceptional circumstances,
the Commission will propose a European stabilization
mechanism to preserve financial stability in Europe. It will be
submitted for decision to an extraordinary ECOFIN meeting
that the Spanish presidency will convene this Sunday May 9th.
3.
Strengthening economic governance
We have decided to strengthen the governance of the euro area.
In the context of the Task Force headed by the President of the
European Council, we are prepared to :
—
The Greek Prime Minister has reiterated the total commitment
of the Greek government to the full implementation of these vital
reforms.
broaden and strengthen economic surveillance and policy
coordination in the euro area, including by paying close
attention to debt levels and competitiveness developments;
—
The decisions we are taking reflect the principles of responsibility
and solidarity, enshrined in the Lisbon Treaty, which are at the core
of the monetary union.
reinforce the rules and procedures for surveillance of euro
area Member States, including through a strengthening of
the Stability and Growth Pact and more effective sanctions;
—
create a robust framework for crisis management,
respecting the principle of Member States' own budgetary
responsibility.
2.
Response to the current crisis
In the current crisis, we reaffirm our commitment to ensure the
stability, unity and integrity of the euro area. All the institutions
of the euro area (Council, Commission, ECB) as well as all euro
area Member States agree to use the full range of means available
to ensure the stability of the euro area.
Today, we agreed on the following :
—
First, consolidation of public finances is a priority for all of
us and we will take all measures needed to meet our fiscal
targets this year and in the years ahead in line with excessive
deficit procedures. Each one of us is ready, depending on
the situation of his country, to take the necessary measures
to accelerate consolidation and to ensure the sustainability of
public finances. The situation will be reviewed by the Ecofin
Council on the basis of a Commission assessment by the end
of June at the latest. We have asked the Commission and the
Council to strictly enforce the recommendations addressed
to Member States under the Stability and Growth Pact.
The President of the European Council decided to accelerate the
work of the Task Force. The Commission will present its proposals
next week on May 12.
4.
Regulation of the financial markets and the fight
against speculation
Finally, we agreed that the current market turmoil highlights the
need to make rapid progress on financial markets regulation and
supervision. Increasing transparency and supervision in derivatives
markets and dealing with the role of rating agencies are among the
key priorities for the EU. We also agreed on intensifying the work
on crisis management and resolution in the financial sector and on
a fair and substantial contribution of the financial sector to the costs
of crises. The work on assessing whether more steps are necessary
in view of recent speculation against sovereign debtors should be
sped up. The President of the European Council therefore intends
to discuss these issues at the June European Council, on the basis,
where needed, of Commission proposals.
(8523($1&281&,/—-81(
&21&/86,216
The EU has met the worldwide financial crisis with united resolve and has done what was necessary to safeguard the
stability of the Economic and Monetary Union. In particular, in May agreement was reached on a support package for
Greece as well as on a European financial stabilisation mechanism and facility, which was finalised in June. We have been
laying the foundations for much stronger economic governance. We remain committed to taking all necessary action to
put our economies back on the path of sustainable and job-creating growth.
To that end, today:
−
we adopt “Europe 2020”, our new strategy for jobs and smart, sustainable and inclusive growth. It constitutes a
coherent framework for the Union to mobilise all of its instruments and policies and for the Member States to take
enhanced coordinated action. It will promote the delivery of structural reforms. The emphasis must now be on
implementation, and we will guide and monitor this process. We will discuss further, over the coming months, how
specific policies can be mobilised to unlock the EU’s growth potential, starting with innovation and energy policies;
−
we reaffirm our collective determination to ensure fiscal sustainability, including by accelerating plans for fiscal
consolidation where warranted;
−
we confirm our commitment to ensuring financial stability by addressing the gaps inregulation and supervision of
financial markets, both at the level of the EU and at the G20. We agree to rapidly advance on key legislative measures
so that the new supervisory bodies can start work from the beginning of next year and set an ambitious position for
the EU to take at the Toronto Summit;
−
we fully agree on the urgent need to reinforce the coordination of our economic policies. We agree on first
orientations as regards the Stability and Growth Pact and budgetary surveillance as well as broader macroeconomic
surveillance. We look forward to the final report of the Task Force in October.
I.
A NEW EUROPEAN STRATEGY FOR JOBS
AND GROWTH
account. Several Member States have recently strengthened
and frontloaded budgetary consolidation. All Member
States are ready, if necessary, to take additional measures
to accelerate fiscal consolidation. Priority should be given
to growth-friendly budgetary consolidation strategies
mainly focused on expenditure restraint. Increasing the
growth potential should be seen as paramount to ease fiscal
adjustment in the long run.
Finalising and implementing the Europe 2020 Strategy
1.
The European Council today has finalised the European
Union’s new strategy for jobs and smart, sustainable and
inclusive growth. The strategy will help Europe recover
from the crisis and come out stronger, both internally and
at the international level, by boosting competitiveness,
productivity, growth potential, social cohesion and
economic convergence.
The new strategy responds to the challenge of reorienting
policies away from crisis management towards the
introduction of medium- to longer-term reforms that
promote growth and employment and ensure the
sustainability of public finances, inter alia through the reform
of pension systems.
2.
Member States are determined to ensure fiscal sustainability
and achieve budgetary targets without delay. They
will continue to adopt a differentiated speed in fiscal
consolidation taking both fiscal and non-fiscal risks into
3.
The European Council confirms the five EU headline
targets (annex I) which will constitute shared objectives
guiding the action of Member States and the Union as
regards promoting employment; improving the conditions
for innovation, research and development; meeting our
climate change and energy objectives; improving education
levels and promoting social inclusion in particular through
the reduction of poverty. It agrees on the quantification of
the education and social inclusion/poverty indicators, as
agreed by the Council. It gives its political endorsement to
the Integrated Guidelines for economic and employment
policies, which will be formally adopted following the
European Parliament’s opinion on the latter. The guidelines
will continue to be the basis for any country-specific
recommendations that the Council may address to Member
States. These recommendations shall be fully in line with
relevant Treaty provisions and EU rules and shall not alter
Member States’ competences, for example in areas such as
education.
4.
5.
6.
7.
8.
Member States must now act to implement these policy
priorities at their level. They should, in close dialogue with
the Commission, rapidly finalise their national targets, taking
account of their relative starting positions and national
circumstances, and according to their national decisionmaking procedures. They should also identify the main
bottlenecks to growth and indicate, in their National Reform
Programmes, how they intend to tackle them. Progress
towards the headline targets will be regularly reviewed.
All common policies, including the common agricultural
policy and cohesion policy, will need to support the strategy.
A sustainable, productive and competitive agricultural
sector will make an important contribution to the new
strategy, considering the growth and employment potential
of rural areas while ensuring fair competition. The European
Council stresses the importance of promoting economic,
social and territorial cohesion as well as developing
infrastructure in order to contribute to the success of the
new strategy. Full use should be made of the strategy’s
external dimension, notably via the trade strategy that the
Commission will present by the end of the year. Efforts
should seek to address the main bottlenecks constraining
growth at EU level, including those related to the working
of the internal market and infrastructure, as well as the need
for a common energy policy and a new ambitious industrial
policy.
In particular, Europe’s Single Market needs be taken to
a new stage, through a comprehensive set of initiatives.
The European Council welcomes the report presented
by Mr Mario Monti on a new strategy for the Single Market
and the Commission’s intention to follow it up by presenting
concrete proposals. The European Council will revert to
this matter in December 2010.
Further to the presentation by the Commission of the
first flagship initiative on a ‘Digital Agenda for Europe’,
the European Council endorses the establishment of an
ambitious action agenda based on concrete proposals and
calls upon all institutions to engage in its full implementation,
including the creation of a fully functioning digital single
market by 2015. The Commission is invited to report on
progress achieved by the end of 2011.
The European Council looks forward to the presentation
of the other flagship initiatives before the end of the year.
Enhancing economic governance
9.
The crisis has revealed clear weaknesses in our economic
governance, in particular as regards budgetary and broader
macroeconomic surveillance. Reinforcing economic policy
coordination therefore constitutes a crucial and urgent
priority.
10.
The European Council welcomes the progress report of
the President of the Task Force on economic governance
and agrees on a first set of orientations.
11.
The present rules on budgetary discipline must be fully
implemented. As regards their strengthening, the European
Council agrees on the following orientations :
a)
strengthening both the preventive and corrective arms of
the Stability and Growth Pact, with sanctions attached to
the consolidation path towards the medium term objective;
these will be reviewed so as to have a coherent and
progressive system, ensuring a level playing field across
Member States. Due account will be taken of the particular
situation of Member States which are members of the euro
area and Member States’ respective obligations under the
Treaties will be fully respected;
b)
Giving, in budgetary surveillance, a much more prominent
role to levels and evolutions of debt and overall sustainability,
as originally foreseen in the Stability and Growth Pact;
c)
from 2011 onwards, in the context of a “European semester”,
presenting to the Commission in the spring Stability and
Convergence Programmes for the upcoming years, taking
account of national budgetary procedures;
d)
ensuring that all Member States have national budgetary
rules and medium term budgetary frameworks in line
with the Stability and Growth Pact; their effects should be
assessed by the Commission and the Council;
e)
ensuring the quality of statistical data, essential for a sound
budgetary policy and budgetary surveillance; statistical
offices should be fully independent for data provision.
12.
As regards macro-economic surveillance, it agrees on the
following orientations:
a)
developing a scoreboard to better assess competitiveness
developments and imbalances and allow for an early
detection of unsustainable or dangerous trends;
b)
developing an effective surveillance framework, reflecting
the particular situation of euro area Member States.
13.
The European Council invites the Task Force and the
Commission to rapidly develop further and make
operational these orientations. It looks forward to the
final report of the Task Force, covering the full scope of its
mandate, for its meeting in October 2010.
Regulating financial services
14.
The necessary reforms to restore the soundness and stability
of the European financial system must be completed
urgently. The resilience and transparency of the banking
sector must be ensured. Progress in the next few months
is essential. The European Council agrees that the results of
ongoing stress tests by banking supervisors will be disclosed
at the latest in the second half of July. The Commission’s
communication on “Regulating Financial Services for
sustainable growth” of 2 June 2010 sets out a comprehensive
list of initiatives to be undertaken and completed before the
end of 2011. The EU must demonstrate its determination
to bring about a safer, sounder, more transparent and more
responsible financial system.
15.
In particular, the European Council:
a)
calls on the Council and the European Parliament to rapidly
adopt the legislative proposals on financial supervision to
ensure that the European Systemic Risk Board and the three
European Supervisory Authorities can begin working from
the beginning of 2011;
b)
calls for agreement on the legislative proposal on alternative
investment fund managers before the summer and for
the swift examination of the Commission’s proposal on
the improvement of the EU’s supervision of credit rating
agencies;
c)
looks forward to proposals announced by the Commission
on derivative markets and in particular appropriate measures
on short selling (including “naked” short selling) and credit
default swaps.
16.
The European Council agrees that Member States should
introduce systems of levies and taxes on financial institutions
to ensure fair burden-sharing and to set incentives to contain
systemic risk.1 Such levies or taxes should be part of a
credible resolution framework. Further work is urgently
required on their main features and issues of level playing
field and cumulative impacts of various regulatory measures
should be carefully assessed. The European Council invites
the Council and the Commission to take this work forward
and report back in October 2010.
II.
G 20 TORONTO SUMMIT
17.
The Union’s response to the crisis must continue to be
coordinated at the global level to ensure that measures
are internationally consistent. The action it is taking to
1
The Czech Republic reserves its right not to introduce these
measures.
boost competitiveness, consolidate public finances and
reform its financial sector will enable it to put forward
strong positions for similar international action at the
forthcoming G20 Summit.
The EU should lead efforts to set a global approach for
introducing systems for levies and taxes on financial
institutions with a view to maintaining a world-wide level
playing field and will strongly defend this position with
its G20 partners. The introduction of a global financial
transaction tax should be explored and developed further
in that context.
18.
With a view to the Toronto Summit, the European
Council confirms the orientations agreed by the Council
and reflected in the Terms of Reference prepared for the
Busan Ministerial Meeting. Given the major risks that late
exit from extraordinary fiscal stimulus would entail for
public accounts’ sustainability, the G20 should agree on
a coordinated and differentiated exit strategy to ensure
sustainable public finances. All major economies need to
do their part to achieve the agreed objective of a strong,
sustainable and balanced growth. The G20 must reaffirm
its commitment to the reform of the financial system and
make rapid progress in a consistent and coordinated manner
on the whole range of actions agreed upon in Pittsburgh, to
strengthen the resilience and transparency of our financial
system, including through better quality additional capital
and new liquidity buffer. In the IMF, quotas should be
reviewed as part of a wider package of IMF governance
issues, covering all elements agreed in Pittsburgh and
Istanbul, and be completed, as a single and comprehensive
package by November 2010.
III.
MILLENNIUM DEVELOPMENT GOALS
19.
The forthcoming UN High Level Plenary Meeting on
the Millennium Development Goals constitutes a unique
opportunity to strengthen our collective endeavours and
our partnerships with developing countries to eliminate
global poverty, hunger and inequality. The conclusions
adopted by the Council on 14 June provide the European
Union with a strong position for this meeting.
20.
The European Union remains determined to support the
achievement of the MDGs globally by 2015. This is possible
if all partners demonstrate firm political commitment,
implement necessary policy changes and take concrete
action. The European Union calls on the High Level Plenary
Meeting to agree on concrete actions aimed at: increasing
ownership by developing countries; focusing efforts;
improving the impact of policies; mobilising more and
predictable financing for development, including innovative
sources of financing; and making more effective use of
development resources. The European Council reaffirms
its commitment to achieve development aid targets by
2015 as set out in its June 2005 conclusions. The European
Council agrees to return to this annually on the basis of a
report by the Council.
IV.
CLIMATE CHANGE
21.
The European Council takes note of the Commission’s
communication analysing options to move beyond 20%
greenhouse gas emission reductions and assessing the
risk of carbon leakage. In line with the conclusions of the
Council of 11 June, the Commission will undertake further
analyses, including consequences for each Member State,
and the Council will examine further the issues raised in
the communication. As shown in the ECOFIN report,
the EU and its Member States have advanced in the
implementation of their fast start commitments for 2010
and will report at the Cancun conference in a coordinated
manner on progress achieved. The European Council will
revert to climate change in the autumn, in advance of the
Cancun conference.
V.
OTHER ISSUES
22.
The European Council expresses its appreciation for the
work achieved by the Reflection Group. The Group’s report
on “Project Europe 2030 - Challenges and Opportunities”
will provide useful input for the European Union’s work in
the future.
23.
The European Council welcomes the progress achieved
in implementing the European Pact on Immigration and
Asylum and endorses the conclusions of the Council of
3/4 June.
24.
The European Council welcomes the Commission opinion
on Iceland’s application for membership of the EU and the
recommendation that accession negotiations should be
opened. Having considered the application on the basis
of the opinion and its December 2006 conclusions on the
renewed consensus for enlargement, it notes that Iceland
meets the political criteria set by the Copenhagen European
Council in 1993 and decides that accession negotiations
should be opened.
25.
The European Council invites the Council to adopt a general
Negotiating Framework. It recalls that negotiations will
be aimed at Iceland integrally adopting the EU acquis
and ensuring its full implementation and enforcement,
addressing existing obligations such as those identified
by the EFTA Surveillance Authority under the EEA
Agreement, and other areas of weakness identified in the
Commission’s Opinion, including in the area of financial
services. The European Council welcomes Iceland’s
commitment to address these issues and expresses its
confidence that Iceland will actively pursue its efforts
to resolve all outstanding issues. The European Council
confirms that the negotiations will be based on Iceland’s
own merits and that the pace will depend on Iceland’s
progress in meeting the requirements set out in the
negotiating framework, which will address i.a. the above
requirements.
26.
The European Council congratulates Estonia on the
convergence it has achieved, based on sound economic
and financial policies, and welcomes its fulfilment of all the
convergence criteria as set out in the Treaty. It welcomes
the Commission’s proposal that Estonia adopt the euro
on 1 January 2011.
27.
The European Council adopts a Declaration on Iran
(annex II).
28.
Confirming its previous conclusions of December 2008 and
June 2009, and following on its decision of December 2009
to examine transitional measures regarding the addition
of 18 seats in the European Parliament until the end of
the present 2009-2014 parliamentary term, the European
Council adopts a decision (doc. EUCO 11/10) to pursue
the necessary procedure to adopt those measures.
ANNEXES
I.
NEW EUROPEAN STRATEGY FOR JOBS
AND GROWTH EU HEADLINE TARGETS
−
aiming to raise to 75% the employment rate for women and
men aged 20-64, including through the greater participation
of young people, older workers and low-skilled workers and
the better integration of legal migrants;
−
improving the conditions for research and development,
in particular with the aim of raising combined public and
private investment levels in this sector to 3% of GDP; the
Commission will elaborate an indicator reflecting R&D
and innovation intensity;
−
reducing greenhouse gas emissions by 20% compared
to 1990 levels; increasing the share of renewables in final
energy consumption to 20%; and moving towards a 20%
increase in energy efficiency;
the EU is committed to taking a decision to move to a
30% reduction by 2020 compared to 1990 levels as its
conditional offer with a view to a global and comprehensive
agreement for the period beyond 2012, provided that other
developed countries commit themselves to comparable
emission reductions and that developing countries
contribute adequately according to their responsibilities
and respective capabilities;
−
improving education levels, in particular by aiming to reduce
school drop-out rates to less than 10% and by increasing
the share of 30-34 years old having completed tertiary or
ent education to at least 40%;2
−
promoting social inclusion, in particular through the
reduction of poverty, by aiming to lift at least 20 million
people out of the risk of poverty and exclusion.3
II.
DECLARATION ON IRAN
1.
The European Council underlines its deepening concerns
about Iran’s nuclear programme and welcomes the adoption
by the UN Security Council of Resolution 1929 introducing
new restrictive measures against Iran.
2.
The European Council welcomes the recent efforts by Brazil
and Turkey to secure progress on the Tehran Research
Reactor agreement proposed to Iran by the IAEA in
October 2009. A satisfactory agreement with Iran on the
TRR could serve as a confidence building measure.
concerns. In this regard, the European Council notes the
last report of the IAEA of 31 May.
4.
the Iranian transport sector, in particular the Islamic
Republic of Iran Shipping Line (IRISL) and its subsidiaries
and air cargo; key sectors of the gas and oil industry with
prohibition of new investment, technical assistance and
transfers of technologies, equipment and services related
to these areas, in particular related to refining, liquefaction
and LNG technology; and new visa bans and asset freezes
especially on the Islamic Revolutionary Guard Corps
(IRGC).
5.
The European Council confirms once again the commitment
of the European Union to work for a diplomatic solution
of the issue of Iran’s nuclear programme. The European
Council calls on Iran to demonstrate willingness to build
the confidence of the international community and to
respond to the invitation for resumption of negotiations,
and reaffirms the validity of the June 2008 proposals made
to Iran.
6.
What is needed is a serious negotiation concerning Iran's
nuclear programme and other issues of mutual concern.
The European Council underlines that the EU High
Representative for Foreign Affairs and Security Policy is
ready to resume talks in this regard.
However, the European Council stresses that it would
not address the core of Iran’s nuclear issue. The European
Council urges Iran to engage in negotiations on its nuclear
programme.
3.
2
3
The European Council reaffirms the rights and
responsibilities of Iran under the NPT. The European
Council deeply regrets that Iran has not taken the many
opportunities which have been offered to it to remove the
concerns of the international community over the nature
of the Iranian nuclear programme. The decision by Iran to
enrich uranium to the level of 20 per cent, contrary to its
international obligations under existing UNSC and IAEA
Board of Governors Resolutions has further increased these
The European Council emphasises the competence of Member
States to define and implement quantitative targets in the field of
education.
The population is defined as the number of persons who are at
risk-of-poverty and exclusion according to three indicators (atrisk-of poverty; material deprivation; jobless household), leaving
Member States free to set their national targets on the basis of the
most appropriate indicators, taking into account their national
circumstances and priorities.
Under these circumstances, new restrictive measures
have become inevitable. The European Council, recalling
its declaration of 11 December 2009 and in the light
of the work undertaken by the Foreign Affairs Council
thereafter, invites the Foreign Affairs Council to adopt at
its next session measures implementing those contained
in the UN Security Council Resolution 1929 as well as
accompanying measures, with a view to supporting the
resolution of all outstanding concerns regarding Iran’s
development of sensitive technologies in support of its
nuclear and missile programmes, through negotiation.
These should focus on the areas of trade, especially dual
use goods and further restrictions on trade insurance; the
financial sector, including freeze of additional Iranian banks
and restrictions on banking and insurance;
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The European Council discussed how to give new momentum to the Union’s external relations, taking full advantage
of the opportunities provided by the Lisbon Treaty. It agreed on the need for Europe to promote its interests and values
more assertively and in a spirit of reciprocity and mutual benefit. As a first step, it set general orientations with a view to
a number of important events over the coming weeks and months. It also decided on a number of concrete measures to
more generally enhance the effectiveness of the Union’s external policy. The European Council took stock of progress
achieved in the Task Force on economic governance.
I.
RELATIONS WITH STRATEGIC PARTNERS
for enhanced coordination between institutional actors, for
better integration of all relevant instruments and policies, and
for summit meetings with third countries to be used more
effectively, as set out in more detail in Annex I.
A changing world: a challenge for the EU
1.
Europe is facing many challenges in a rapidly changing world,
which all require a concerted international response. The
recent economic and financial crisis has dramatically shown
the extent to which the well-being, security and quality of
life of Europeans depend on external developments. The
emergence of new players with their own world views and
interests is also an important new feature in the international
environment.
2.
The European Union must be an effective global actor,
ready to share in the responsibility for global security
and to take the lead in the definition of joint responses
to common challenges. A strong economy and internal
cohesion will strengthen the Union’s ability to project its
influence in the world. The Union can draw on its firmlyrooted belief in effective multilateralism, especially the role
of the UN, universal values, an open world economy and
on its unique range of instruments. It remains the largest
donor to countries in need, it is the first trading power in
the world, and it has developed a common security and
defence policy supported by crisis management tools which
should be further reinforced. It also plays a major stabilizing
role in its neighbourhood. The Union has secured stability
in the Western Balkans particularly through the European
perspective given to that region; the European Council will
return to this at a subsequent meeting.
3.
In accordance with the Lisbon Treaty, and in line with the
European Security Strategy, the European Union and its
Member States will act more strategically so as to bring
Europe’s true weight to bear internationally. This requires
a clear identification of its strategic interests and objectives
at a given moment and focused reflection on the means to
pursue them more assertively. The European Council calls
for improved synergies between the European Union and
national levels, consistent with the provisions of the Treaties,
4.
The European Union’s strategic partnerships with key
players in the world provide a useful instrument for
pursuing European objectives and interests. This will only
work if these partnerships are two-way streets based on
mutual interests and benefits and on the recognition that
all actors have rights as well as duties. The full participation
of emerging economies in the international system should
allow its benefits to be spread in a balanced manner and
its responsibilities to be shared evenly. In this context,
enhancing trade with strategic partners constitutes a crucial
objective, contributing to economic recovery and job
creation. We must take concrete steps to secure ambitious
Free Trade Agreements, secure greater market access for
European businesses and deepen regulatory cooperation
with major trade partners.
Orientations for upcoming events
5.
The European Union will hold a number of important
international meetings in the coming weeks. The European
Council lays out initial orientations today with a view to
these meetings. It will in future regularly discuss external
relations in order to set strategic orientations in advance
of key events, in particular with a view to defining key
messages on our objectives and on the means to achieve
them. This requires clear strategic guidance by the European
Council on the basis of effective preparation by the High
Representative and by the Council.
6.
October will see summits with China and the Republic of
Korea and the Asia-Europe Meeting (ASEM), followed
later in the year by a summit with India. They are a good
opportunity to engage with key partners in a very dynamic
part of the world. Issues such as our respective roles in
achieving a sustainable recovery from the economic crisis
and in seeking global solutions to universal challenges
will be on the agenda. Concrete steps should be taken in
priority areas of cooperation between Europe and Asia,
such as cooperation on climate change, including on
the promotion of effective and verifiable reductions in
emissions, as well as on renewables and energy efficiency;
pressing security issues, such as proliferation, terrorism,
cybersecurity and piracy; cooperation on regional issues
such as Iran and North Korea as well as on global issues such
as migration, energy and access to raw materials; working
together on development policies and the promotion of
good governance, labour standards and human rights and
developing people-to-people relations.
In view of the EU/China summit in particular, the European
Union should actively pursue its strategic interests, including
as regards the promotion of bilateral trade, market access for
goods and services and investment conditions; the protection
of intellectual property rights and the opening up of public
procurement markets; stronger discipline in the field of export
subsidies; and the dialogue on exchange rate policies.
7.
Over the coming months there will be a number of other
important external relations issues which will have to be
addressed by the European Council.
a.
The G20 Summit in Seoul will allow a review of the global
economic recovery and the commitments made by G20
members. In particular, it will allow the Union to stress the
importance of maintaining strong momentum in the area
of financial reform; in this respect, the recent agreement
between the European Parliament and the Council on
the financial supervision package and the completion of
the reform of the regulatory framework by the end of 2011
strengthen the EU’s hand. It should also serve to send a clear
signal on the need to conclude the WTO DDA negotiations
and implement the Framework for Strong, Sustainable and
Balanced Growth. The European Council will discuss
the detailed preparation of Seoul at its October 2010
meeting and determine the Union’s position. The G8
and the G20 will remain important fora for the definition
of global responses to many of the challenges facing us, to
which the EU must actively contribute through coordinated
positions. The European Council therefore welcomes the
ambition of the incoming French chairmanship in 2011 to
fully use the G20 and G8 to that end.
b.
The transatlantic relationship is based on common values
and constitutes a core element of the international system.
The present circumstances call for fresh impetus to be
given to this relationship and for renewed reflection on
ways of creating a true partnership based on our respective
strengths and specificities. The November 2010 summit
with President Obama will constitute a real opportunity
in this respect and will require careful preparation. The
October 2010 European Council will agree on the key
political messages the European Union representatives will
bring to this major summit. Based on a good understanding
of our mutual interests and respective contributions, the
transatlantic partnership should concentrate on maximising
the potential benefits of our economic relationship, on
working more closely on major international issues and
on confronting global economic and security challenges
together in a concerted manner. In this connection,
the High Representative is invited to develop ideas on
how EU/NATO cooperation in crisis management, in
accordance with the United Nations Charter and with
the relevant United Nations Security Council resolutions,
could be further strengthened. This should be done in
a spirit of mutual reinforcement and with due respect
for their decision-making autonomy, further to the
recommendations on concrete measures transmitted by
the EU to NATO in February 2010.
c.
The European Council will take stock of preparations for
the Cancun conference on climate change at its October
meeting and agree on the EU position. Cancun should be
a stepping stone in the international climate negotiations,
agreeing on concrete deliverables for all participants to
create momentum and stay on track for an ambitious final
agreement.
d.
The upcoming reflection on the implementation of
the European Neighbourhood Policy will provide an
opportunity to deepen relations with the Union’s eastern
neighbours through the Eastern Partnership as well as with
its southern neighbours. The smooth implementation of
projects launched within the Eastern Partnership constitutes
an outreach of EU values and promotes the legal, economic
and social approximation of the countries concerned to the
EU. The second summit of the Union for the Mediterranean
will provide a timely opportunity to strengthen EuroMediterranean cooperation and support the resumption
of direct negotiations between the parties in the Middle
East Peace Process.
e.
EU/Africa relations have taken on a new dynamic in recent
years. The EU/South Africa Summit on 28 September 2010
and the EU/Africa Summit on 29/30 November 2010 should
serve to further deepen elations. The EU, in partnership with
African countries, will continue to pursue the objectives of
economic development, good governance, transparency
and accountability in the context of the joint EU/Africa
Strategy.
f.
The 20-22 September UN High Level Plenary Meeting
on the Millennium Development Goals will be held in
New York. The European Union is firmly committed to
supporting the achievement of the MDG globally by 2015,
together with partners in the international community.
g.
The upcoming summits with Ukraine in November and
Russia in December should be used to deepen cooperation
on areas of mutual benefit, so as to bring more stability and
predictability to those two important relationships, as well
as to promote human rights.
governance, and looks forward to receiving for its
October 2010 meeting the final report of the Task Force,
encompassing all aspects of the mandate given by the
European Council of March 2010 and presenting a
comprehensive package of measures which will guide
legislative work.
In particular, the summit with Ukraine should bring progress
to the negotiations on the Association Agreement, including
the deep and comprehensive Free Trade Agreement, and
highlight the role of the EU in the economic and democratic
reforms of this important neighbour.
The summit with Russia will provide an opportunity
to enhance cooperation with Russia and to discuss in
particular its modernization agenda. Cooperation should
be enhanced on economic issues such as energy, investment
and innovation, on security issues, including frozen conflicts,
the combat against terrorism and organized crime, and on
environmental issues, including climate change.
ANNEXES
I.
INTERNAL ARRANGEMENTS TO
IMPROVE THE EUROPEAN UNION’S
EXTERNAL POLICY
a)
Looking at concrete measures to more generally improve
the functioning of the European Union’s external policy,
the European Council calls for a more integrated approach,
ensuring that all relevant EU and national instruments and
policies are fully and coherently mobilised, consistent with
the provisions of the Treaties, in support of the European
Union’s strategic interests. The importance of issues like
climate change, energy policy, trade, development or
Justice and Home Affairs issues, including migration and
visa policy in dealings with partners and at a multilateral
level must be fully taken into account in preparations
for summits and international events. In this regard the
European Union should further enhance the coherence and
complementarity between its internal and external policies.
The practice of holding orientation debates well before
summits should be further developed, with a particular
emphasis on setting priorities and concrete tasking.
b)
Synergies need to be developed between the European
Union’s external relations and Member States bilateral
relations with third countries, so that, where appropriate,
what is done at the level of the European Union
complements and reinforces what is done at the level of
the Member States and vice versa. There should be more
active and regular sharing of information and consultation
on developments at the respective levels, on the basis of a
running calendar of EU and Member States’ summits with
major strategic partners.
c)
Close and regular coordination between all the different
institutional actors involved in the definition and
implementation of the European Union’s external relations
is necessary to ensure that EU representatives can defend
coherent positions on the whole range of the strategic
interests and objectives of the Union.
d)
Much progress has been achieved in the preparation, at
the level of the European Union, for multilateral summits,
notably through the practical arrangements reached
The October European Council will come back to the key
messages of the European Union in these summits so as to
ensure a fruitful outcome.
h.
Building on the successful summit held this year with
its Latin American and Caribbean partners, the EU is
committed to continuing to work closely together with the
countries of the region in response to the global challenges
facing us.
8.
Pakistan’s development and stability is of strategic
importance to the European Union. In light of the
devastating floods, the European Union and its Member
States have responded with an increase in bilateral and
multilateral humanitarian aid. The European Council
adopted a declaration on Pakistan (Annex II).
9.
The European Union will remain actively engaged and
involved, including through the Quartet, to support and
ensure the success of the negotiations between Israel and
the Palestinian Authority. The European Council adopted
a declaration on the Middle East Peace Process (Annex III).
II.
TASK FORCE ON ECONOMIC
GOVERNANCE
10.
On the basis of an interim report of the President of
the Task Force on economic governance, the European
Council welcomes the important progress made, notably
on the European semester, on the development of a new
macro-surveillance framework to monitor and correct
unsustainable competitiveness divergences and imbalances
in a timely manner and on the strengthening of national
fiscal frameworks.
11.
The European Council underlines the need to maintain
momentum on the reform of European economic
between the President of the European Council and the
President of the Commission on the EU representation in
the G8 and G20 structures. It invites them to continue to
work towards improving the way in which the European
Union projects its views in such fora.
e)
f)
The European Union needs a clear picture of the particular
issues arising from relations with the individual partner
States. It needs to develop medium-term planning that
sets out objectives to be reached over time, with each
summit concentrating on two or three core issues. The
European Council therefore asks the High Representative,
in coordination with the Commission and with the Foreign
Affairs Council, to evaluate the prospects of relations with all
strategic partners, and set out in particular our interests and
possible leverage to achieve them. The High Representative
is invited to present a first progress report on this work to
the December 2010 European Council. In this context,
there should be a reflection on the frequency, format and
output of those summits, which need to be better targeted
towards reaching EU objectives. The European Council
invites its President, in cooperation with the President of
the Commission and the High Representative, to take any
necessary initiatives with a view to improving the process.
The European External Action Service will be a crucial tool
in support of the efforts towards enhancing the European
Union’s external policy. At service level, it will, under the
authority of the High Representative, provide support to
the European Council, the Council and the Commission
concerning the strategic overview and coordination
necessary to ensure the coherence of the European Union’s
external action as a whole.
II.
DECLARATION ON PAKISTAN
1.
The European Council is shocked at the devastating
impact of the floods in Pakistan which continue to destroy
livelihoods and communities throughout the country. The
scale of the disaster is unprecedented in Pakistan’s history.
The cost in humanitarian needs and to its already fragile
economy is immense. The severity of this crisis demands
an immediate and substantial response, taking also into
account the strategic importance of Pakistan’s development,
security and stability in the region. Following the second
EU-Pakistan Summit held last June, the European Council
reiterates its intention to strengthen cooperation on political
issues. A stable, democratic and prosperous Pakistan is key
to addressing global issues such as counter-terrorism, nonproliferation or counter-narcotics. Good governance will
also be key to ensure swift reconstruction of the country.
2.
The European Council recalls the recent efforts of the EU
(Member States and the Commission) in response to the
crisis, notably the provision of significant humanitarian aid.
It recognises the importance of further support to Pakistan
to bring immediate relief and longer term assistance for
recovery and reconstruction.
3.
To this end, the European Council resolves to mandate
Ministers to agree urgently a comprehensive package of
short, medium and longer term measures which will help
underpin Pakistan’s recovery and future development. These
should comprise significant additional humanitarian and
development assistance as well as ambitious trade measures
essential for economic recovery and growth. In this regard,
the European Council underlines its firm commitment to
grant exclusively to Pakistan increased market access to the
EU through the immediate and time limited reduction of
duties on key imports from Pakistan in conformity with
WTO rules, to be implemented as soon as possible, and to
commit to Pakistan’s eligibility for GSP+ for 2014, provided
it meets the necessary criteria. The Commission is invited
to explore options with WTO partners and to present its
finalised proposal in October taking account of industrial
sensitivities in the EU.
III. DECLARATION ON THE MIDDLE EAST
PEACE PROCESS
The European Union strongly welcomes the launch of direct
negotiations between Israel and the Palestinian Authority,
announced in Washington on 2nd September 2010, and commends
the Israelis, the Palestinians and the United States as well as the
Quartet and Arab partners for their efforts. The decision by the
parties to engage in substantive talks represents a major step on the
road towards a just, lasting and comprehensive peace in the region.
Recalling the Council conclusions of December 2009 on the
Middle East Peace Process, the European Union stresses that these
negotiations on all final status issues should lead to a two-state
solution with the State of Israel and an independent, democratic,
contiguous and viable State of Palestine living side by side in peace
and security.
In this context, the European Union deems it indispensable that
both parties observe calm and restraint and refrain from actions that
could affect negatively the progress of the negotiations. It calls on
both parties to uphold previous commitments and to strive to create
an environment conducive to a successful outcome. The European
Union recalls that settlements are illegal under international law
and calls for an extension of the moratorium decided by Israel. It
continues to call for a complete stop to all violence, in particular
rocket fire and terrorist attacks.
The European Union will spare no effort, along with its partners in
the Quartet as well as Arab partners, to support the US-led efforts
for successful negotiations that lead to a framework agreement
within one year, which is in the interest of Israelis and Palestinians,
the peoples of the region and the international community. The
European Union is the first donor to the Palestinians and a crucial
political and economic partner of both parties as well as their
neighbours. In this regard, it stresses that the European Union
will remain actively engaged and involved, including through the
Quartet, to support and ensure the success of the negotiations
and invites the High Representative to continue to fully associate
the European Union to the ongoing efforts. The European Union
stresses the need for the Quartet to continue to play an essential
role in the peace process. It also stresses the crucial importance of
the continuation of the Palestinian State building process which
the European Union will continue to actively support, including
the implementation of the Fayyad Plan.
Recalling the Council conclusions of June 2010 on Gaza, the
European Union also stresses that for peace to be sustainable, a
durable solution needs to be found for Gaza. It welcomes the recent
measures announced by the Israeli government as an important
step forward. It calls for full implementation and complementary
measures in order to achieve a fundamental change of policy that
allows for the reconstruction and economic recovery of Gaza.
The EU has offered its assistance for achieving this objective. The
European Union calls for a solution addressing Israel’s legitimate
security concerns.
The European Union recalls that peace in the Middle East should
be comprehensive and reiterates the importance of negotiations
on the Israeli-Syria and Israeli-Lebanon tracks.
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In order to address the challenges revealed by the recent financial crisis, a fundamental shift in European economic
governance is required. To that end, the European Council endorsed the report of the Task Force on economic governance.
Its implementation will constitute a major step forward in strengthening the economic pillar of EMU: it will increase fiscal
discipline, broaden economic surveillance and deepen coordination. The report also sets out the guiding principles for
a robust framework for crisis management and stronger institutions. The European Council agreed on the way forward
concerning the follow-up to the Task Force. Further to its discussions of 16 September 2010, the European Council also
exchanged views in preparation for the Seoul G20 Summit and the Cancún Conference on climate change as well as the
summits with the United States, Russia, Ukraine, India and Africa.
I.
TASK FORCE ON ECONOMIC
GOVERNANCE
1.
The European Council endorses the report of the Task Force
on economic governance. Its implementation will allow us
to increase fiscal discipline, broaden economic surveillance,
deepen coordination, and set up a robust framework for
crisis management and stronger institutions. The European
Council calls for a “fast track” approach to be followed
on the adoption of secondary legislation needed for the
implementation of many of the recommendations. The
objective is for the Council and the European Parliament
to reach agreement by summer 2011 on the Commission’s
legislative proposals, noting that the Task Force report does
not cover all issues addressed in these proposals and viceversa. This will ensure the effective implementation of the
new surveillance arrangements as soon as possible.
The result will be a substantial strengthening of the
economic pillar of EMU, enhancing confidence and thus
contributing to sustainable growth, employment and
competitiveness. The European Council invites the Council
to speed up work on how the impact of pension reform is
accounted for in the implementation of the Stability and
Growth Pact and report back to the European Council in
December. Acknowledging the importance of systemic
pension reforms, a level playing field within the SGP should
be ensured.
2.
Further to the report of the Task Force, and in order to
ensure balanced and sustainable growth, Heads of State
or Government agree on the need for Member States to
establish a permanent crisis mechanism to safeguard the
financial stability of the euro area as a whole and invite
the President of the European Council to undertake
consultations with the members of the European Council
on a limited treaty change required to that effect, not
modifying article 125 TFEU (“no bail-out” clause).
The European Council welcomes the intention of the
Commission to undertake, in close consultation with the
President of the European Council, preparatory work on
the general features of a future new mechanism, i.a. the
role of the private sector, the role of the IMF and the very
strong conditionality under which such programmes should
operate.
The European Council will revert to this matter at its
December meeting with a view to taking the final decision
both on the outline of a crisis mechanism and on a limited
treaty amendment so that any change can be ratified at the
latest by mid-2013.
The President of the European Council intends to
subsequently examine in consultation with the Member
States the issue of the right of euro area members to
participate in decision making in EMU-related procedures
in the case of a permanent threat to the stability of the euro
area as a whole.
3.
Heads of State or Government stressed that, at the same
time as fiscal discipline is reinforced in the European Union,
it is essential that the European Union budget and the
forthcoming Multi-annual Financial Framework reflect the
consolidation efforts being made by Member States to bring
deficit and debt onto a more sustainable path. Respecting
the role of the different institutions and the need to meet
Europe’s objectives, the European Council will discuss at its
next meeting how to ensure that spending at the European
level can make an appropriate contribution to this work.
II.
SEOUL G20 SUMMIT
4.
The world economy is recovering from the crisis. However,
there remain a number of issues that require sustained
attention at the global level, including risks to financial
sustainability, incomplete financial sector repair, high
unemployment, the volatility of global commodity prices,
and re-emerging global macroeconomic imbalances. The
European Council confirmed the orientations agreed
by the Council and discussed the priorities which the
representatives of the EU and the EU Member States which
are member of the G20 will promote at the Seoul summit.
The summit must send an ambitious signal as regards the
concrete and timely implementation of measures agreed
in the Framework for Strong, Sustainable and Balanced
Growth, notably concerning fiscal consolidation plans,
financial regulatory reform, social cohesion, job creation
and the need for further structural reforms. The issue of
the rebalancing of world growth also requires particular
attention. The European Union looks forward to the
confirmation by the G20 Summit of the Basel agreement,
which is an important step in strengthening global financial
stability. The European Union emphasises the need to
continue keeping markets open, to inject momentum
into the Doha negotiations and to adopt a growthoriented
development agenda. It stresses the need to avoid all forms
of protectionism and to avoid engaging in exchange-rate
moves aimed at gaining short-term competitive advantages.
5.
6.
The agreement reached at the G20 Ministerial Meeting
of 23 October 2010 on the reform of the International
Monetary Fund will help deliver a more effective, credible
and legitimate IMF and enable the IMF to play its role in
supporting the operation of the international monetary and
financial system. Quota as well as wider governance reforms
should be delivered together as a single, comprehensive
package and within the same time frame.
Further work is necessary on levies and taxes on financial
institutions, at both the international and internal levels.
In line with the Council’s report, there should be further
coordination between the different levy schemes in place
in order to avoid double-charging. The Council is invited
to report back to the European Council in December 2010.
The different options regarding the taxation of the financial
sector should also be examined, as well as good practices
aimed at impeding tax havens and tax evasion.
III.
CANCÚN CONFERENCE ON CLIMATE
CHANGE
7.
Making progress in tackling climate change is becoming
ever more urgent. It is therefore important that the Cancún
Conference deliver a significant intermediate step, building
on the Kyoto Protocol and paving the way towards a global
and comprehensive legally binding framework, integrating
the political guidance given in the Copenhagen Accord.
It is crucial that the European Union and its Member
States continue to play a constructive role and that they
deliver a single message. The European Council endorses
the conclusions of the Council of 14 October 2010 on
the preparation of the Cancún Conference and confirms
the willingness of the European Union to consider a
second commitment period under the Kyoto Protocol
provided the conditions set out in these conclusions are
met. The European Union will submit a comprehensive
and transparent report on the implementation of its
commitment on fast-start financing in Cancún and yearly
thereafter and will underline the importance of further
increasing transparency of climate change financing. The
European Union will reassess the situation after the Cancún
Conference, including the examination of options to move
beyond 20% greenhouse gas emission reductions to be
prepared to react to the ongoing international climate
negotiations; the Council is invited to report back on this
issue by spring 2011. In parallel with seeking an international
agreement, the EU will also develop a more diversified
approach to engaging with key partners in areas of mutual
interest that help them reduce their emissions. In this
context, the EU encourages regional initiatives to tackle
climate change and promote green growth such as the
recent Mediterranean Initiative on Climate Change.
IV.
SUMMITS WITH THIRD COUNTRIES
8.
In line with its conclusions of September 2010, the European
Council discussed the key political messages which the
President of the European Council and the President of
the Commission will promote at the forthcoming summits
with the United States, Russia, Ukraine, India and Africa.
—
In the margins of the European Council a Social Summit was held,
focusing on economic governance following the final report of the
Task Force, in the light of the conclusions adopted by the Council
(EPSCO) on 21 October 2010.
—
(8523($1&281&,/—'(&(0%(5
&21&/86,216
Throughout the crisis, we have taken decisive action to preserve financial stability and promote the return to a sustainable
growth. We will continue to do so and the EU and the euro area will emerge stronger from the crisis.
Growth prospects are strengthening and the fundamentals of the European economy are sound. The temporary stability
tools put in place earlier this year have proved their utility, but the crisis has demonstrated that there can be no complacency.
This is why we agreed today on the text of a limited amendment to the Treaty on the establishment of a future permanent
mechanism to safeguard the financial stability of the euro area as a whole. This amendment should enter into force on 1
January 2013. We also reiterated our commitment to reach agreement on the legislative proposals on economic governance
by end June 2011 with the aim of strengthening the economic pillar of the Economic and Monetary Union and to continue
to implement the Europe 2020 strategy.
I.
ECONOMIC POLICY
1.
The European Council welcomed the report presented by
its President following up on its conclusions of 28 and 29
October 2010. It agreed that the Treaty should be amended
in order for a permanent mechanism to be established by
the Member States of the euro area to safeguard the financial
stability of the euro area as whole (European Stability
Mechanism). This mechanism will replace the European
Financial Stability Facility (EFSF) and the European
Financial Stabilisation Mechanism (EFSM), which will
remain in force until June 2013. As this mechanism is
designed to safeguard the financial stability of the euro area
as whole, the European Council agreed that Article 122(2)
TFEU will no longer be needed for such purposes. Heads
of State or Government therefore agreed that it should not
be used for such purposes.
2.
3.
The European Council also called for Finance Ministers
of the euro area and the Commission to finalise work on
the intergovernmental arrangement setting up the future
mechanism by March 2011, integrating the general features
set out in the Eurogroup statement of 28 November 2010,
which the European Council endorsed (annex II). The
mechanism will be activated by mutual agreement of the
euro area Member States in case of risk to the stability of
the euro area as a whole.
4.
Member States whose currency is not the euro will, if
they so wish, be involved in this work. They may decide to
participate in operations conducted by the mechanism on
an ad hoc basis.
5.
The European Council agreed on the text of the draft
decision amending the TFEU set out in annex I. It decided
to immediately launch the simplified revision procedure
provided for in Article 48(6) TEU. The consultation of
the institutions concerned should be concluded on time to
allow the formal adoption of the decision in March 2011,
completion of national approval procedures by the end of
2012, and entry into force on 1 January 2013.
The European Council called for the acceleration of
the work on the six legislative proposals on economic
governance, building on the recommendations of the Task
Force endorsed last October and keeping a high level of
ambition, so that they can be adopted by June 2011. It
welcomed the Council's report on the treatment of systemic
pension reform under the Stability and Growth Pact and
called for the report to be reflected in the specifications on
the implementation of the reformed SGP.
6.
Recalling its conclusions of October 2010, the European
Council looked forward to the Commission's intention
to make proposals for the new multiannual financial
framework by June 2011 and invited the institutions to
cooperate in order to facilitate its timely adoption.
7.
The new Europe 2020 strategy for jobs and growth will
continue to guide the Union and the Member States in
responding to the crisis and promoting the delivery of
structural reforms. The European Council welcomed the
progress achieved since the launch of the strategy, as shown
in the report presented by the Presidency.
8.
The European Council welcomed the Statement by the
Heads of State or Government of the euro area and the EU
institutions (annex III).
II.
OTHER ISSUES
9.
The European Council welcomed the first progress report
presented by the High Representative on the European
Union's relations with its strategic partners. On this basis,
the European Council invited the High Representative, in
close cooperation with the Commission and the Foreign
Affairs Council, to take this work forward in line with its
conclusions of September 2010, setting out common
European interests and identifying all possible leverages
to achieve them. The European Council will take stock of
progress once a year and, where necessary, set orientations.
The launch of the EEAS and its coordinating role provide
a valuable opportunity to step up this work.
10.
The European Council endorsed the Council's conclusions
of 14 December 2010 on enlargement and agreed to give
Montenegro the status of candidate country.
11.
12.
The European Council condemned the violence perpetrated
since the second round of the presidential election in Côte
d’Ivoire, in particular the recourse to violence against
civilians on 16 December. It called firmly on all the parties
to act with restraint. It recalled the availability expressed by
the International Criminal Court to prosecute the persons
responsible for such acts. It called on all Ivorian leaders,
both civilian and military who have not yet done so, to
place themselves under the authority of the democratically
elected President, Mr°Alassan Ouattara. It confirmed
the determination of the EU to take targeted restrictive
measures against those who would continue to obstruct
the respect of the sovereign will expressed by the Ivorian
people.
The European Council welcomed the successful outcome
of the COP-16 in Cancun as an important step forward
in global efforts to reach the agreed objective of staying
below 2°C increase in global temperatures, and noted with
satisfaction the successful implementation of the strategy
it agreed in March.
(1)
Article 48(6) of the Treaty on European Union (TEU)
allows the European Council, acting by unanimity after
consulting the European Parliament, the Commission
and, in certain cases, the European Central Bank, to adopt
a decision amending all or part of the provisions of Part
Three of the Treaty on the Functioning of the European
Union (TFEU). Such a decision may not increase the
competences conferred on the Union in the Treaties and its
entry into force is conditional upon its subsequent approval
by the Member States in accordance with their respective
constitutional requirements.
(2)
At the meeting of the European Council of 28 and 29
October 2010, the Heads of State or Government agreed on
the need for Member States to establish a permanent crisis
mechanism to safeguard the financial stability of the euro
area as a whole and invited the President of the European
Council to undertake consultations with the members of
the European Council on a limited treaty change required
to that effect.
(3)
On 16 December 2010, the Belgian Government submitted,
in accordance with Article 48(6), first subparagraph, of the
TEU, a proposal for revising Article 136 of the TFEU by
adding a paragraph under which the Member States whose
currency is the euro may establish a stability mechanism
to be activated if indispensable to safeguard the stability of
the euro area as a whole and stating that the granting of any
required financial assistance under the mechanism will be
made subject to strict conditionality. At the same time, the
European Council adopted conclusions about the future
stability mechanism (paragraphs 1 to 4).
(4)
The stability mechanism will provide the necessary tool
for dealing with such cases of risk to the financial stability
of the euro area as a whole as have been experienced in
2010, and hence help preserve the economic and financial
stability of the Union itself. At its meeting of 16 and 17
December 2010, the European Council agreed that, as this
mechanism is designed to safeguard the financial stability
of the euro area as whole, Article 122(2) of the TFEU will
no longer be needed for such purposes. The Heads of State
or Government therefore agreed that it should not be used
for such purposes.
(5)
On 16 December 2010, the European Council decided
to consult, in accordance with Article 48(6), second
subparagraph, of the TEU, the European Parliament and the
Commission, on the proposal. It also decided to consult the
European Central Bank. [On […dates…], the European
Parliament, the Commission and the European Central
Bank, respectively, adopted opinions on the proposal.]
(6)
The amendment concerns a provision contained in Part
Three of the TFEU and it does not increase the competences
conferred on the Union in the Treaties,
ANNEXES
I.
DRAFT EUROPEAN COUNCIL DECISION
of …
amending Article 136 of the Treaty on the Functioning of the
European Union with regard to a stability mechanism for Member
States whose currency is the euro
THE EUROPEAN COUNCIL,
Having regard to the Treaty on European Union, and in particular
Article 48(6) thereof,
Having regard to the proposal for revising Article 136 of the Treaty
on the Functioning of the European Union submitted to the
European Council by the Belgian Government on 16 December
2010,
[Having regard to the opinion of the European Parliament,1]
[Having regard to the opinion of the European Commission,2]
[After obtaining the opinion of the European Central Bank,3]
Whereas:
1
2
3
Opinion of … (not yet published in the Official Journal).
Opinion of … (not yet published in the Official Journal).
Opinion of … (not yet published in the Official Journal).
HAS ADOPTED THIS DECISION:
Article 1
The following paragraph shall be added to Article 136 of the Treaty
on the Functioning of the European Union:
"3.
The Member States whose currency is the euro may establish
a stability mechanism to be activated if indispensable to
safeguard the stability of the euro area as a whole. The
granting of any required financial assistance under the
mechanism will be made subject to strict conditionality."
Article 2
Member States shall notify the Secretary-General of the Council
without delay of the completion of the procedures for the approval
of this Decision in accordance with their respective constitutional
requirements.
This Decision shall enter into force on 1 January 2013, provided
that all the notifications referred to in the first paragraph have been
received, or, failing that, on the first day of the month following
receipt of the last of the notifications referred to in the first paragraph.
The ESM will complement the new framework of reinforced
economic governance, aiming at an effective and rigorous economic
surveillance, which will focus on prevention and will substantially
reduce the probability of a crisis arising in the future.
Rules will be adapted to provide for a case by case participation of
private sector creditors, fully consistent with IMF policies. In all
cases, in order to protect taxpayers' money, and to send a clear signal
to private creditors that their claims are subordinated to those of
the official sector, an ESM loan will enjoy preferred creditor status,
junior only to the IMF loan.
Article 3
Assistance provided to a euro area Member State will be based on
a stringent programme of economic and fiscal adjustment and on
a rigorous debt sustainability analysis conducted by the European
Commission and the IMF, in liaison with the ECB.
This Decision shall be published in the Official Journal of the
European Union.
On this basis, the Eurogroup Ministers will take a unanimous
decision on providing assistance.
Done at,
For the European Council
The President
II.
GENERAL FEATURES OF THE
FUTURE MECHANISM —
EUROGROUP STATEMENT
OF 28 NOVEMBER 2010
"The recent events have demonstrated that financial distress in
one Member State can rapidly threaten macro-financial stability
of the EU as a whole through various contagion channels. This is
particularly true for the euro area where the economies, and the
financial sectors in particular, are closely intertwined.
Throughout the current crisis, euro area Member States have
demonstrated their determination to take decisive and coordinated
action to safeguard financial stability in the euro area as a whole, if
needed and return growth to a sustainable path.
In particular, the European Financial Stability Facility (EFSF) has
been set up to provide for swift and effective liquidity assistance,
together with the European Financial Stabilisation Mechanism
(EFSM) and the International Monetary Fund, and on the basis of
stringent programmes of economic and fiscal policy adjustments
to be implemented by the affected Member State and ensuring
debt sustainability.
On 28 - 29 October the European Council agreed on the need
to set up a permanent crisis mechanism to safeguard the financial
stability of the euro area as a whole. Eurogroup Ministers agreed
that this European Stability Mechanism (ESM) will be based
on the European Financial Stability Facility capable of providing
financial assistance packages to euro area Member States under
strict conditionality functioning according to the rules of the current
EFSF.
For countries considered solvent, on the basis of the debt
sustainability analysis conducted by the Commission and the
IMF, in liaison with the ECB, the private sector creditors would be
encouraged to maintain their exposure according to international
rules and fully in line with the IMF practices. In the unexpected
event that a country would appear to be insolvent , the Member
State has to negotiate a comprehensive restructuring plan with its
private sector creditors, in line with IMF practices with a view to
restoring debt sustainability. If debt sustainability can be reached
through these measures, the ESM may provide liquidity assistance.
In order to facilitate this process, standardized and identical
collective action clauses (CACs) will be included, in such a way as to
preserve market liquidity, in the terms and conditions of all new euro
area government bonds starting in June 2013. Those CACs would
be consistent with those common under UK and US law after the
G10 report on CACs, including aggregation clauses allowing all
debt securities issued by a Member State to be considered together
in negotiations. This would enable the creditors to pass a qualified
majority decision agreeing a legally binding change to the terms of
payment (standstill, extension of the maturity, interest-rate cut and/
or haircut) in the event that the debtor is unable to pay.
Member States will strive to lengthen the maturities of their new
bond emissions in the medium-term to avoid refinancing peaks.
The overall effectiveness of this framework will be evaluated in
2016 by the Commission, in liaison with the ECB.
We restate that any private sector involvement based on these terms
and conditions would not be effective before mid-2013.
President of the European Council Herman Van Rompuy has
indicated that his proposal on limited treaty change to the European
Council at its next meeting will reflect today's decision."
III.
Strengthening the Stability and Growth Pact and
implementing a new macro-surveillance framework from
summer 2011.
e)
Ensuring the availability of adequate financial support
through the EFSF pending the entry into force of the
permanent mechanism: we note that only a very limited
amount has been committed from the EFSF to support
the Irish programme.
f)
Further strengthening of the financial system both as regards
the regulatory and supervisory frameworks and conducting
new stress tests in the banking sector.
g)
Expressing full support to ECB action: we support the ECB
in its independent responsibility to ensure price stability,
solidly anchor inflation expectations and thereby contribute
to financial stability of the euro area. We are committed to
ensuring the financial independence of the central banks
of the Eurosystem.
STATEMENT BY THE HEADS OF STATE OR
GOVERNMENT OF THE EURO AREA AND
THE EU INSTITUTIONS
The Heads of State or Government of the euro area and the EU
institutions have made it clear, as set out below, that they stand ready
to do whatever is required to ensure the stability of the euro area
as a whole. The euro is and will remain a central part of European
integration. In particular, the Heads called for determined action
in the following areas:
a)
d)
Fully implementing existing programmes: we welcome
the impressive progress made in implementing the Greek
programme and the agreed adjustment programme for
Ireland, including the adoption of the 2011 budget.
b)
Keeping up fiscal responsibility: we are all committed
to strictly implementing the budgetary policy
recommendations, fully respecting the fiscal targets for
2010 and 2011 and to correcting excessive deficits within
the agreed deadlines.
c)
Stepping up growth enhancing structural reforms: we are
determined to accelerate structural reforms to enhance
growth.
Elements of this strategy will be further developed in
the coming months as a comprehensive response to any
challenges, as part of our new economic governance.
Photo credits
© European Union
Page 17
1. Photo: G. Seibold
2. © Administraţia prezidenţială/autor Sorin Lupsa
3. Gabinete do Primeiro - Ministro
4. © Copyright RVD / foto: Richard van Elferen
5. Creative Commons (Some rights reserved)
6. © Grzegorz Rogiński/Chancellery of the Prime Minister
7. © 2009 SIP / Charles Caratini, tous droits réservés
8. Courtesy of the office of the Prime Minister
9. © UK Parliament
General Secretariat of the Council
The European Council in 2010
Luxembourg: Publications Office of the European Union
2011 — 46 pp. — 21.0 x 29.7 cm
ISBN 978-92-824-2804-7
doi:10.2860/64741
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