European Council agreed on a comprehensive economic package
The European Council of 24-25 March in Brussels reached agreement on a comprehensive package of measures to preserve financial stability and to lay the ground for a sustainable and job-creating growth.
The European Council agreed on the main features of the European Stability Mechanism (ESM), a permanent fund to become applicable in June 2013. The permanent stability mechanism includes a strong private sector involvement. The preparation of the ESM treaty and the amendments to the temporary EFSF agreement will be finalised so as to allow signature of both agreements at the same time before the end of June 2011. The meeting also made decisions on the wording of the Treaty amendments related to the establishment of the ESM.
Based on a German initiative, the paid-in capital for the ESM will be phased in and is to be made in five equal annual instalments. The total capital of EUR 1,438 million to be provided by Finland will be made in annual instalments of EUR 288 million between 2013 and 2017. Member States commit to accelerate, in the event that this is needed, the provision of appropriate instruments in order to maintain a minimum 15 percent ratio between paid-in capital and the outstanding amount of ESM issuances. The total amount of paid-in capital to be provided by Finland will not increase due to these changes.
The objective of the Euro Plus Pact (also referred to as the competitiveness pact) is to foster competitiveness and employment, contribute further to the sustainability of public finances and reinforce financial stability. In addition to the eurozone countries, Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania also decided to participate in the Pact.
The Heads of State or Government discussed the undertaking of increasingly strict bank stress tests. The introduction of a global financial transaction tax is to be explored and developed further. The EU leaders also discussed the situation in Portugal.
Furthermore, the European Council discussed recent events in Libya and the Union’s Southern Neighbourhood. The EU reiterated their support to the UN Security Council Resolution 1973 and its implementation. European Union, together with the League of Arab States, the United Nations and the African Union, will intensify its efforts to find a solution to the crisis. The European Council reiterated its call on Gaddafi to relinquish power immediately in order to allow Libya to rapidly embark on an orderly transition to democracy. In addition to the sanctions adopted before, the EU stands ready to initiate and adopt further sanctions. The EU will continue to provide humanitarian assistance in close cooperation with humanitarian agencies and NGOs.
The European Union will support Japan as it strives to overcome the challenges it faces after the natural disaster. The European Council decided that all EU nuclear plants are to be reviewed on the basis of a risk and safety assessment conducted by relevant expert authorities. According to the EU, the highest standards for nuclear safety need to be promoted also in the neighbouring countries.
The Council also appointed Peter Praet as a new member of the Executive Board of the European Central Bank.
Inquiries: Anna-Mari Vimpari, Special Adviser to the Prime Minister, EU Affairs, Prime Minister’s Office, tel. +358 9 1602 2055 and Kare Halonen, State Secretary for EU Affairs, Government Secretariat for EU Affairs, tel. +358 9 1602 2180.