Communication from the Commission to the European Parliament and the Council on the application of Regulation (EU) No 472/2013

The economic and financial crisis revealed a number of weaknesses in the EU's economic governance and surveillance. Most surveillance shortcomings were effectively addressed with the creation of the European Semester for economic policy coordination and the six pieces of legislation commonly known as the “Six Pack”. Given the higher potential that economic and budgetary policies in a single currency area can result in substantive spill-over effects, however, there was nonetheless a need for stronger mechanisms to be put in place. For these purposes, Regulations (EU) No 472/2013 and (EU) No 473/2013 were adopted by the legislator.

Regulation (EU) No 472/2013 sets out specific processes related to enhanced, programme and post-programme surveillance of euro-area Member States, formalising previously ad hoc approaches and making the link between financial assistance and the Treaty framework related to the coordination of the economic policies of the Member States. These so-called "Two Pack" Regulations entered into force on 30 May 2013.

Regulation (EU) No 472/2013 (hereafter "the Regulation") sets out rules for enhanced surveillance, macroeconomic adjustment programmes and post-programme surveillance under which the Commission and Council can exercise a degree of surveillance appropriate to the case at hand, and which complements the other existing multilateral surveillance processes. In so doing, they can conclude that a Member State must take further measures to address the specific risks emanating from that Member State for financial stability in the euro area; the said measures would aim to rapidly re-establish a sound economic and financial situation and, if relevant, restore the Member State's capacity to finance itself fully on the financial markets.

The Regulation was established in order to align current practice used in implementing financial assistance programmes in euro-area Member States with the Treaty institutional framework and to, thus, simultaneously ensure an improved application of said principles across Member States. The degree of intrusiveness of monitoring and surveillance will depend on the seriousness of the financial situation of the Member State concerned. The Regulation also allows for the simplification of overlapping reporting obligations for specific cases in which a Member State is under financial assistance.

According to Article 19 of the Regulation, by January 2014, and every five years thereafter, the Commission shall submit to the European Parliament and to the Council a report on the application of this Regulation, accompanied, where appropriate, by a proposal to amend this Regulation. The report shall evaluate, inter alia: (a) the effectiveness of this Regulation; (b) progress in ensuring closer coordination of economic policies and sustained convergence of economic performance of the Member States in accordance with the TFEU; (c) the contribution of this Regulation to the achievement of the Union’s strategy for growth and jobs.

It should be noted that the review of the Regulation aims to provide an overview on its implementation since its entry into force. The content provided, as part of this review, on economic progress made by Member States under programme is not intended to either duplicate or subsume the regular mission reviews conducted under these programmes.

The Regulation has only been in force for a very short time, implying severe limitations as far as what can be evaluated, and to what depth, at this juncture. The review of the "Six" and "Two Pack" legislation at year-end 2014 will, in contrast, allow to conduct a more comprehensive and in-depth assessment of the Regulation's effectiveness.

• Primary Source

EUR-Lex: COM(2014)61: Follow the progress of this communication through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2014:061:FIN

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