Driving European recovery

KEY POINTS

The communication presents an ambitious programme which aims at:

1. Restoring and maintaining the stability of the financial sector

The report, presented by the De Larosière Group (pdf), makes supervision the cornerstone of a stable financial system.

The European Commission intends to establish a supervisory framework to detect potential risks related to financial markets early on by means of:

• an EU body to oversee the stability of the financial system as a whole;
• a European financial supervision system.

1. Security also had to be an integral part of future European regulations. To this end, the Commission made plans for:
   • a legislative instrument which establishes regulatory and supervisory standards for hedge funds and private equity;
   • a White Paper on tools for early intervention to prevent a possible crisis;
   • a report on derivatives and other complex structured products to increase transparency and ensure financial stability;
   • legislation to increase the quality and quantity of prudential capital, to address liquidity risk and limit excessive leverage.

With the aim of rebuilding the confidence of European investors, consumers and small- and medium-sized enterprises in their economies, their access to credit and their rights as concerns financial products, the Commission seeks to take action in the following areas:

• increasing the efficiency of marketing safeguards for retail investment products;
• strengthening protection for bank depositors, investors and insurance policy holders;
• the introduction of measures on responsible lending and borrowing.

The remuneration of employees in the financial sector and its directors is also under consideration through a package of legislative proposals which aim at submitting them to prudential oversight.

Lastly, a harmonised system of sanctions was to be introduced in order to prevent market abuse.

1. Supporting the real economy

The EU's single market should continue to be the motor behind its economic and social prosperity in the EU. To this end, EU countries should increase their support for the real economy by implementing the following principles:

• eliminating barriers to the free movement of goods and services;
• implementing structural changes which meet climate and energy challenges through the promotion of a low carbon economy;
• promoting the exchange of good practices and synergies in terms of EU cooperation;
• keeping the EU's single market open to trade partners.

1. Supporting the population

The crisis has also had negative consequences on the labour market and has accentuated problems of unemployment and social exclusion. In order to combat these issues, the Commission invited EU countries to initiate action in the following areas:

• keeping people in employment;
• reinforcing activation and providing income support;
• investing in re-training and skills upgrading;
• preventing over-indebtedness and maintaining access to financial services;
• guaranteeing free movement of workers;
• implementing support measures for unskilled workers;
• combating school drop-out;
• promoting flexicurity in terms of employment protection.