Establishing a permanent crisis mechanism to safeguard the financial stability of the euro area

1.12.2010

Question for oral answer O-0199/2010
to the Commission
Rule 115
Sharon Bowles
on behalf of the Committee on Economic and Monetary Affairs

The European Parliament is convinced of the need for a permanent crisis mechanism to safeguard the financial stability of the euro. It recalls that the ECB similarly identified such a need in its proposals of June 2010 on ‘Reinforcing economic governance in the euro area’. The Parliament even called for the creation of a European Monetary Fund (see the Feio report, 2010). The Parliament has also previously identified the need for a crisis resolution mechanism for the banking sector (see the Garcia-Margallo y Marfil and Ferreira reports, 2010). Whatever the mechanism put in place, the priority should be to help the euro zone and its Member States and not to further aggravate the situation. In this regard the Parliament favours the Community method.

In its conclusions of 28-29 October, the European Council asked its President to work towards a limited treaty change required to establish a permanent crisis mechanism to safeguard the financial stability of the euro area as a whole. The way the European Council has addressed the involvement of the private sector in such a mechanism did not leave the markets unresponsive.

On 28 November 2010, the Ministers of the Euro Group agreed that the permanent mechanism, the European Stability Mechanism (ESM), will be based on the European Financial Stability Facility (EFSF) and that it may involve the private sector on a case-by-case basis in accordance with international and IMF practice.

Given the tensions on the markets and the need for the mechanism to be efficient in the interests of all the eurozone members, when will the Commission make a formal proposal for a permanent crisis resolution, and can it answer the following questions?

1.  What exactly would the Treaty change imply, if a Treaty change is ultimately required? Under which procedure would it take place?

2.  Would the new instrument be based on an intergovernmental approach or on the Community method, and how would it be funded?

3.  What would all the technical options be, taking into account the necessary conditionality?

4.  Should Member States not yet part of the euro area be invited to be part of the mechanism?

5.  When would this mechanism be in place, and what role does the Commission see for the Parliament in this respect?

Tabled: 1.12.2010

Forwarded: 3.12.2010

Deadline for reply: 10.12.2010