Europaudvalget 2010-11 (1. samling), Det Udenrigspolitiske Nævn 2010-11 (1. samling)
Det Europæiske Råd 16-17/12-10 Bilag 2, UPN Alm.del Bilag 41
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COUNCIL OF
THE EUROPEAN UNION
Brussels, 7 December 2010
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CO EUR-PREP 51
NOTE
from:
to:
Subject:
The General Secretariat of the Council
COREPER/General Affairs Council
European Council (16-17 December 2010)
- Draft conclusions
In accordance with article 2(3)(a) of the Council's Rules of Procedure, delegations will find attached
the draft conclusions prepared by the President of the European Council, in close cooperation with
the member of the European Council representing the Member State holding the six-monthly
Presidency of the Council and with the President of the Commission.
o
o
o
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I.
ECONOMIC POLICY
1.
The European Council welcomed the report presented by its President following up on its
conclusions of 28 and 29 October 2010. It agreed that the treaty should be amended in order
for a permanent crisis mechanism to be established by Member States of the euro area to
safeguard the financial stability of the euro area as whole.
2.
The European Council agreed on the text of the draft decision amending the TFEU set out in
annex I. It decided to immediately launch the simplified revision procedure provided for in
Article 48(6) TEU. The consultation of the institutions concerned should be concluded on
time to allow the formal adoption of the decision in March 2011, completion of national
approval procedures by the end of 2012, and entry into force on 1 January 2013.
3.
The European Council also called for euro area Member States and the Commission to
finalize work on the future mechanism by March 2011, on the basis of the general features set
out in the Eurogroup statement of 28 November 2010 (annex II). Member States whose
currency is not the euro will be associated to this work.
4.
The European Council took note of the Council's report on the treatment of systemic pension
reform under the Stability and Growth Pact. […]
5.
The European Council looked forward to the Commission's intention to make proposals for
the new multiannual financial framework by June 2011 and invited the institutions to
cooperate in order to facilitate its timely adoption. It will continue to reflect on how to use the
budget to secure the objectives of the treaty in a context of pressure on public finances across
the European Union.
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II.
OTHER ISSUES
6.
The European Council welcomed the progress report presented by the High Representative on
the European Union's relations with its strategic partners, which had a particular emphasis on
China, the United State and Russia. On this basis, the European Council invited the High
Representative, in close cooperation with the Commission and the Foreign Affairs Council, to
take this work forward and to begin similar work on the Union's other strategic partners with a
view to reporting back by March 2011. The launch of the EEAS and its coordinating role
provide a valuable opportunity to step up this work.
7.
p.m. Montenegro
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ANNEX I
DRAFT EUROPEAN COUNCIL DECISION
p.m.
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ANNEX II
GENERAL FEATURES OF THE FUTURE MECHANISM
EUROGROUP STATEMENT OF 28 NOVEMBER 2010
"The recent events have demonstrated that financial distress in one Member State can rapidly
threaten macro-financial stability of the EU as a whole through various contagion channels. This is
particularly true for the euro area where the economies, and the financial sectors in particular, are
closely intertwined.
Throughout the current crisis, euro area Member States have demonstrated their determination to
take decisive and coordinated action to safeguard financial stability in the euro area as a whole, if
needed and return growth to a sustainable path.
In particular, the European Financial Stability Facility (EFSF) has been set up to provide for swift
and effective liquidity assistance, together with the European Financial Stabilisation Mechanism
(EFSM) and the International Monetary Fund, and on the basis of stringent programmes of
economic and fiscal policy adjustments to be implemented by the affected Member State and
ensuring debt sustainability.
On 28 - 29 October the European Council agreed on the need to set up a permanent crisis
mechanism to safeguard the financial stability of the euro area as a whole. Eurogroup Ministers
agreed that this European Stability Mechanism (ESM) will be based on the European Financial
Stability Facility capable of providing financial assistance packages to euro area Member States
under strict conditionality functioning according to the rules of the current EFSF.
The ESM will complement the new framework of reinforced economic governance, aiming at an
effective and rigorous economic surveillance, which will focus on prevention and will substantially
reduce the probability of a crisis arising in the future.
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Rules will be adapted to provide for a case by case participation of private sector creditors, fully
consistent with IMF policies. In all cases, in order to protect taxpayers' money, and to send a clear
signal to private creditors that their claims are subordinated to those of the official sector, an ESM
loan will enjoy preferred creditor status, junior only to the IMF loan.
Assistance provided to a euro area Member State will be based on a stringent programme of
economic and fiscal adjustment and on a rigorous debt sustainability analysis conducted by the
European Commission and the IMF, in liaison with the ECB.
On this basis, the Eurogroup Ministers will take a unanimous decision on providing assistance.
For countries considered solvent, on the basis of the debt sustainability analysis conducted by the
Commission and the IMF, in liaison with the ECB, the private sector creditors would be encouraged
to maintain their exposure according to international rules and fully in line with the IMF practices.
In the unexpected event that a country would appear to be insolvent , the Member State has to
negotiate a comprehensive restructuring plan with its private sector creditors, in line with IMF
practices with a view to restoring debt sustainability. If debt sustainability can be reached through
these measures, the ESM may provide liquidity assistance.
In order to facilitate this process, standardized and identical collective action clauses (CACs) will
be included, in such a way as to preserve market liquidity, in the terms and conditions of all new
euro area government bonds starting in June 2013. Those CACs would be consistent with those
common under UK and US law after the G10 report on CACs, including aggregation clauses
allowing all debt securities issued by a Member State to be considered together in negotiations. This
would enable the creditors to pass a qualified majority decision agreeing a legally binding change to
the terms of payment (standstill, extension of the maturity, interest-rate cut and/or haircut) in the
event that the debtor is unable to pay.
Member States will strive to lengthen the maturities of their new bond emissions in the medium-
term to avoid refinancing peaks.
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The overall effectiveness of this framework will be evaluated in 2016 by the Commission, in liaison
with the ECB.
We restate that any private sector involvement based on these terms and conditions would not be
effective before mid-2013.
President of the European Council Herman Van Rompuy has indicated that his proposal on limited
Treaty change to the European Council at its next meeting will reflect today's decision."
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