by incorporating it into the EU legal framework (as part of the Treaty on the Functioning of the Union of the Euro that we propose). It would replace the Troika in the negotiation and monitoring of structural reforms for countries in need of assistance from the Fund. The European Monetary Fund would be accountable to the Eurogroup and to the European Parliament’s Committee on the Union of the Euro.
In the short term, the effectiveness of mutual insurance mechanisms against economic and financial shocks could be increased by facilitating the use of ESM precautionary credit lines (so far unused), clarifying in advance that the associated conditionality would be limited to compliance with the country-specific recommendations issued by the Commission. The objective is to protect fragile Member States from illiquidity risks, while providing a positive incentive to the activation of new European macroeconomic supervision instruments.
A treasury of the euro area would be responsible for buying part of or all treasury bills (up to 1 year maturity) issued by euro area Member States, except those under a financial assistance programme. Purchases of each Member State’s treasury bills would be made in proportion to its respective GDP, while a cap would be imposed on the issuance of national treasury bills (e.g. 10% of GDP). The treasury of the euro area would finance these purchases by issuing eurobills backed by national treasury bills (synthetic eurobills).
These synthetic eurobills would be standardised and issued by a European treasury that would stop buying treasury bills from a Member State when it is subject to an excessive deficit (or imbalance) procedure and does not take the necessary corrective measures. That Member State would then be excluded from the purchases by the euro area treasury until it has taken the necessary corrective measures. In case such exclusion would trigger financial stability risks, the Member State concerned would have to require a financial assistance programme from the European Monetary Fund. The euro area treasury would be accountable to the Eurogroup and to the European Parliament’s Committee on the Union of the Euro. National treasuries would, of course, remain accountable to national parliaments.
Beyond a model of pure aggregation of national treasury bills, it could be envisaged to provide credit enhancement through mezzanine guarantees provided by participating Member States participants.
The current funding system of the EU budget has become more opaque and more complex than ever before because of the many derogatory special regimes (British rebate, discount off), while expenditures have been cut and some policies have lost relevance. It is therefore crucial to reform the current system of the EU budget, distinct from the budget of the union of the euro (proposal 15), so that it reflects a political direction, solidarity and a capacity for collective action. The EU budget should be reformed in the following way:
A European industrial strategy should first and foremost be based on the single market and its deepening. It is, in particular, essential to create an environment favourable to investment, innovation and companies’ growth (see proposals 24 and 38). However, in industries that depend on public investment (notably network and defence industries), economies of scale and network effects may justify a European approach as regards public procurement, public equity stakes or the financing of R& D projects. It is possible to consider different scopes of this strategy (bilateral cooperation - for example, the Franco-German size, or multilateral - for example at the level of the Union of the Euro or the EU) depending on the political will. The main idea is that a European industrial policy is conceivable only on the basis of the pooling of industrial interests, which can take different forms: participation in the capital of companies, common public procurement, public funding R& D and joint ventures.
This genuine European energy policy would be organised around a reinforced cooperation or a treaty establishing a common policy to ensure Europe’s energy independence by protecting its security of supply and by making Europe’s energy transition more efficient and less costly for European citizens. Europe’s genuine energy policy would be built on three main pillars:
This would internalize the environmental cost of transporting goods from the place of production outside the EU to the place of receipt by the EU customer on the basis of weight, mode of transportation and distance.
The same method could be adopted by our trading partners (principle of reciprocity), and a joint-agreement on the assessment system to evaluate the environmental cost of transport would be then privileged. The EU could initiate a multilateral agreement in this regard. Furthermore, a stricter monitoring of compliance with European environmental standards could be implemented at EU borders.
This could be achieved by: