Estonia to support crisis management mechanism at European Council meeting in Brussels

TALLINN - EU heads of state and government took important decisions to strengthen the euro at their meeting in Brussels on Oct. 28-29. They endorsed the final report of the Task Force on Economic Governance and agreed on the need for a permanent crisis mechanism for the euro area.

At the European Council meeting on Oct. 28, heads of state and government of the European Union discussed how to better coordinate the economic policy of the EU’s member states in order to avoid future crises.
The discussion centered on the work of the expert group chaired by Herman Van Rompuy, the president of the European Council. Primarily comprised of the ministers of finance of the member states, the working group has since this spring been discussing ways of improving coordination of budgetary and economic policy in the European Union, above all in the eurozone.

“Estonia fully supports the recommendations in the final report,” Prime Minister Andrus Ansip told his colleagues. “They fulfill the objective of protecting the economies of European countries from crisis more effectively.”
The recommendations of the working group are aimed at several broader fields, including strengthening member states’ budgetary discipline and broadening macro-economic surveillance.

Ansip highlighted the recommendation that member states adhere to stricter government debt criteria. Under European Union agreements, debt may be up to 60 percent of GDP. However, most member states are now unable to comply with this requirement.
As a positive development, he noted the expanded range of sanctions with regard to member states that flout the uniform rules.

“The task force has done good work,” said the prime minister. “Now its recommendations must be introduced into European Union legal acts as quickly as possible.”
The issue of how to establish a permanent crisis mechanism in the eurozone produced an in-depth discussion. The creation of a new crisis management mechanism may also entail a need to amend the basic treaties establishing the European Union.

“Estonia supports rapid progress toward establishing a financial crisis mechanism,” said Ansip. “As early as possible, we must have an answer to the question of what will happen after June 2013, the closure date for the temporary bailout fund for assisting countries in difficulty, which was established this year,” he noted.
Ansip added that Estonia stands prepared to amend the EU’s treaties. He said he considered it paramount that the new crisis management mechanism be reliable and trustworthy.

Estonia also joined the letter initiated by Great Britain and Germany denouncing the intention of the European Commission and European Parliament to increase the European Union’s budget in 2011 by nearly 6 percent. The Council of the European Union has proposed to increase the Europarliament budget by 2.91 percent next year and the signatory states stress the need for this level not to be exceeded.

At the next day’s meeting, on Oct. 29, the European Council approved the principles aiming to ensure better management of the economy in a bid to protect the member states against any future crises. The recommendations of the task force, led by the president of the European Council, are aimed at increasing fiscal discipline and more effective supervision of the economy.

“Today’s decisions constitute a giant leap towards strengthening the EU economy,” said Ansip. “Their urgent implementation contributes to sustainable economic growth and reduction of unemployment.”
Also exchanged at the two-day meeting were views on the upcoming bilateral summits with the United States, Russia, the Ukraine and India.