Madrid Declaration on the reform of the euro area
MIL OSI Translation. Government of the Republic of France statements from English to French – Published July 26, 2018
The President of the French Republic, Emmanuel Macron, and the President of the Government of the Kingdom of Spain, Pedro Sánchez, share a common vision of the Economic and Monetary Union, which is much more than a single currency: it is the stone the cornerstone of a political project that aims to bring its Member States closer together, from a political and social perspective, by converging the participating economies towards a higher standard of living. They stress that the recent declarations by Meseberg and the June 29 Eurozone summit pave the way for an ambitious and urgent strengthening of Economic and Monetary Union (EMU).
To this end, they pledge to work closely together to promote EMU architecture reforms, based on an appropriate balance between accountability and solidarity. This involves:
Complete the Banking Union by implementing the common safety net for the Single Resolution Fund, as agreed at the June 2018 euro area summit. The common safety net decision-making procedure will have to be effective, credible and to meet the deadlines of a resolution case, ensuring that all countries can access it. On the basis of sufficient risk reduction in the banking sector, the entry into force of the common safety net should be anticipated. In addition, the work on the European Deposit Guarantee Scheme, which will guarantee genuine European protection for citizens' savings, needs to be stepped up. To this end, it is necessary that a roadmap be approved at the euro area summit in December 2018. Finally, an appropriate framework for liquidity provision should be put in place in the event of a resolution.
Reform the European Financial Stability Mechanism, develop its precautionary instruments and strengthen its evaluation capacity. To this end, the two Presidents are in favor of its integration, when the time comes, within the framework of the European Union, with full respect for the powers of the Commission and avoiding duplication. In the short term, existing precautionary instruments need to be revised to ensure that the European Financial Stability Mechanism is ready to respond promptly when needed to meet liquidity needs, with deployment mechanisms based on ex ante conditionality.
Establish a central budget for the euro area to promote competitiveness, convergence and stabilization by 2021 with full democratic accountability. Decisions on its financing will have to take into account the next multiannual financial framework, and this funding could come from national contributions, the allocation of tax revenues, new European resources and amounts equivalent to the profits of the European Central Bank. In addition, an unemployment insurance fund could play a stabilizing role. These instruments could complement national fiscal stabilizers in countries affected by a major economic shock, thus avoiding an excessive adjustment of national budgets and related social costs. France and Spain pledge to work on joint proposals with their partners to develop these instruments.
Both countries believe that a complete, prosperous and stable euro area will eventually require a common budget, borrowing capacity, strengthened political leadership and genuine democratic accountability.
In December, European leaders will have to seize the opportunity to decide on a comprehensive set of measures, constituting a major step towards completing the architecture of the euro area. The strengthening of EMU can not wait. Responsibility and solidarity should not be opposed, but seen as going hand in hand. National reforms, common rules and the new common instruments thus described are complementary and all essential for strengthening the euro area. Common European instruments are therefore needed to complement national policies and provide the euro area with the capacity to stabilize its economy in the face of shocks. This strategy will strengthen its resilience and promote sustainable and inclusive growth, which will also benefit the whole of the European Union.
France and Spain also support the development of the social dimension of EMU, building on the European pillar of social rights. A stable economic and monetary union, which fully meets citizens' expectations, requires stronger economic convergence and upward social convergence. Thus, it is necessary to set up a real social dimension, guided by clear objectives of consolidation of the welfare state, high activity rate with quality jobs, and social justice with a real equality of opportunity. To this end, the social dimension needs to be better integrated into the European economic coordination procedures, in particular the European Semester and the procedure concerning macroeconomic imbalances, and the respect of social standards should be taken into account in cohesion policy. in the next multiannual financial framework.
In the same spirit of convergence and justice in the European Union, France and Spain support the European Commission's proposals on the taxation of digital businesses, which should be finalized and adopted in the coming months. To this end, the two countries will work together to promote and accelerate the adoption of short-term measures, in full accordance with the Commission proposal.
France and Spain, for example, recall their firm commitment to a European project based on convergence, solidarity and responsibility.
EDITOR'S NOTE: This article is a translation. Please accept our apologies should the grammar and / or sentence structure not be perfect.