European Council summit aims to create growth and jobs

The European Council met these past two days on 28-29 June, at the end of the Danish Presidency of the Council. The main items on the agenda of this meeting were the conclusions of a pact aimed at creating growth and jobs, the first discussion at this level on the Multiannual Financial Framework (MFF) for 2014-2020 and discussions on a report presented by Council President van Rompuy on the further deepening of the Economic and Monetary Union (EMU).
 
I. The new Compact for Growth and Jobs will mobilise Eur 120 billion which will go towards immediate investment. Half of this amount will come from an increase in the lending capacity of the European Investment bank, whereas the other half will come from the reallocation of unusual structural funds and from a pilot launch of the Project Bonds. The Council was invited to examine how to improve cooperation between the institutions in order to ensure the timely implementation of the provisions of this Compact that require EU legislation.
 
A breakthrough of this Council was that after 30 years of discussions, agreement on the European patent was reached. The last outstanding issue was the seat of the Unified Patent Court. It has been decided that the seat of the Court be in Paris, with divisions based on thematic clusters in London and Munich. It is expected that this development help contribute to more investment in Europe leading to more growth and jobs.
 
The progress achieved by the outgoing Danish Presidency on the MFF was acknowledged and it was agreed that it is a good basis for further negotiations under the incoming Cypriot Presidency, with a view to reach an agreement by the end of the year. It was also agreed that an agreement on the MFF is not just a mathematical exercise and an end in itself; the MFF is an investment budget that if managed properly could be used as a tool for future growth. The negotiating box (the MFF document prepared by the Danish Presidency) has so far been purposely left without any figures to allow discussions thereon to be of a more strategic nature.
 
The Council reached also very important conclusions on the basis of the report drawn up by the President of the Council in close cooperation with the presidents of the European Commission, the European Central Bank and the Eurogroup on the future of the Economic and Monetary Union. The main decisions concern:
 

• the establishment of a banking union by setting up a single European bank supervisory authority in order to break the vicious circle between banks and sovereign debt,
• the possibility, once this single supervisory authority is in place, for banks to be recapitalised directly from the ESM; and
• the need for every country's budgetary and economic policy to be sustainable in a way that makes the way for a fiscal and economic union. 

The European Council agreed to draw up a road map to take forward this work. The President of the Council will once more work in close cooperation the presidents of the European Commission, the European Central Bank and the Eurogroup, with close involvement of the Member States and consultations with the European Parliament. A report is expected by the end of the year, with an interim report to be presented in October.
 
On foreign affairs issues the Council endorsed the agreement reached in the General Affairs Council of 26 June to enable the Council to start accession negotiations with Montenegro as from today.

The President of the European Parliament was invited to attend the first part of the meeting on Thursday 28 June. In his address to the Council he stated that most of the proposals on the agenda of this Council were already made by the European Parliament, some even up to two years before. These include the reallocation of unspent EU funds to growth measures and project bonds. He also spoke of the huge support there is in the European Parliament for a financial transaction tax.

He said that any reform measures should not undermine the fundamental principles of European integration, that is,  the involvement of the 27 Member States, avoiding where possible lengthy Treaty revisions and using existing institutions to carry out these reforms, and doing so in full respect of the principle of parliamentary democracy in order for the reforms to have the trust of the EU citizens. President Schulz stated that it is unacceptable that the only directly elected EU institution does not have any say in the debate on the future of Europe, since the European Parliament was excluded from the master plan for a political union drawn up by the Presidents of the Council, the Commission, the European Central Bank and the Eurogroup.
 
In a press conference after his participation in the Council, President Schulz expressed the view that it was not acceptable that the President of the European Parliament is not entitled to stay throughout the Council meeting, and that there was almost unanimous support among the MEPs on this.