The report by Council President Herman Van Rompuy - “Toward a genuine economic and monetary union” - was discussed over dinner. It was seen as the most important document of the two-day summit, due to end today (29 June).
The report outlines the process towards deeper EU integration and identifying the main building blocks – a banking union, a fiscal union and further steps towards a political union
‘Close cooperation with member states’
The Van Rompuy document became public on 26 June, raising eyebrows in EU capitals. The EU leaders now want a follow-up report to be prepared by the end of October, and asked the quartet of EU presidents to draft it in close cooperation with member states and in liaison with the European Parliament.
The quartet consists of Van Rompuy and the heads of the Commission, European Central Bank and Eurogroup.
Van Rompuy told reporters it would be “quite a job to get it ready before the end of October”, but this was what the Council had decided.
“The analysis is simple. If we are serious about the single currency, there are a number of steps that must be taken: in the financial sector, in fiscal matters, in economic policy. They must be accompanied by increased democratic legitimacy and accountability. We will talk about the timing and nature of the next steps,” he said.
Long-term budget to be agreed by December
EU leaders agreed that it was necessary to conclude the negotiations on the Union’s budget – or Multi-Annual Financial Framework - for 2014-2020 before the end of the year. Up to now, no target date had been set for wrapping up the budget talks.
The incoming Cyprus presidency recently said they hoped for a “political agreement” before the end of the year, not a full agreement.
It also became clear that an important discussion on the 2014-2020 budget would take place at the October summit.
Van Rompuy said that all leaders had agreed that the EU's budget should be transformed into a tool for future growth. Even if it is relatively small compared to the budgets of all the member countries put together, (about 50 times smaller), it can make a real difference because it is an investment budget, he argued.
“The MFF discussions are always interesting political negotiations. They are not just about how much we can spend and where the money comes from, but also where we spend it and how we spend it. They are about more than just money,” Van Rompuy said.
The Council president also announced that he had asked leaders to inform him what of their national priorities for the next EU budget.
The Danish EU presidency presented a “negotiating box” for the incoming budget talks, for which Van Rompuy warmly thanked the country’s prime minister, Helle Thorning-Schmidt.
€120 billion plan to boost growth and jobs
Van Rompuy stressed that the leaders have also approved the so-called growth compact, which he said would mobilise €120 billion in "immediate measures."
Thorning-Schmidt called the pact "a light in the dark." She argued it will "give hope to the Europeans that we are capable of taking decisions that will create growth."
Within that framework, leaders decided that the European Investment Bank would see its capital increased by €10 billion, which will expand the bank's overall lending capacity by €60 billion.
The capital increase comes with a pledge to make sure EIB loans reach “the most vulnerable countries,” Van Rompuy said.
Leaders also decided that unused structural funds (€55 billion) would be reallocated to measures for small and medium-sized enterprises and youth employment.
A pilot phase of the new project bonds (€5 billion) would be launched this summer for initiatives in energy, transport and broad-band infrastructure.