European Union leaders agreed broad plans to toughen budget rules and improve coordination of economic policy at a summit in Brussels on Thursday.
Following are details of the agreement, meant to show financial markets the EU can contain a debt crisis.
ENHANCING ECONOMIC GOVERNANCE
* EU member states reaffirmed their position that better economic policy coordination is a crucial and urgent priority.
* They reaffirmed a commitment by individual states to take additional measures to accelerate fiscal consolidation where needed, with priority given to spending restraint.
* Leaders reviewed the findings of a task force set up to deepen policy coordination and agreed on broad policy goals. A firm agreement will be reached only after the group makes its final recommendations in October.
* These broad policy goals include:
– Countries that fail to meet budgetary and debt targets set out by the Stability and Growth Pact should face sanctions.
– EU states should submit their "stability and convergence programmes" for coming years from 2011 onwards each spring; taking into account national budgetary procedures.
– The quality of statistical data should be ensured and statistical offices should be fully independent.
– EU states will develop a scoreboard to assess competitiveness developments and imbalances to allow for early detection of unsustainable or dangerous trends.
– An effective surveillance framework should be developed, reflecting the particular situation of euro zone members.
STRESS TESTS FOR BANKS
* All EU countries will publish the results of stress tests on their banks in the second half of July at the latest to boost investor confidence in the financial sector.
FINANCIAL SECTOR TAXES
* The EU will call for imposing a transaction tax on financial institutions at the G20 summit next week as well as a levy on banks to help pay for any costs associated with repairing the banking system.
* The European Commission and EU finance ministers will work out details for a European levy on financial institutions by October. This should include the size or how revenues should be used.
REGULATORY SUPERVISION
* EU states pledged to move fast on key legislative measures to create new supervisory bodies that could start work in 2011.
LONG-TERM STRATEGY FOR GROWTH
* A long-term strategy to boost sustainable growth, create jobs and even out economic differences, known as "Europe 2020", was adopted. It includes the following targets:
– raising employment rates for women and men aged 20-64 to 75 percent;
– improving conditions for research and development;
– reducing greenhouse emissions by 20 percent compared to 1990 levels; increasing the share of renewables in final energy consumption to 20 percent; moving towards a 20 percent increase in energy efficiency;
– lowering school drop-out rates; raising higher education levels;
– reducing poverty and social inclusions.
