(-1)

The improved economic governance framework should rely on several inter-linked policies for sustainable growth and jobs, which need to be coherent with each other, in particular a Union strategy for growth and jobs, with particular focus upon development and strengthening of the internal market, fostering international trade and competitiveness, an effective framework for preventing and correcting excessive government deficit (the Stability and Growth Pact), a robust framework for preventing and correcting macro-economic imbalances, minimum requirements for national budgetary frameworks, enhanced financial market regulation and supervision.

(-1a)

The Commission should have a stronger role in the enhanced surveillance procedure as regards assessments that are specific to each Member State, monitoring, missions, recommendations and warnings.

(1)

The coordination of the economic policies of the Member States within the Union should be developed in the context of the broad economic policy guidelines and the employment guidelines , as provided for by the Treaty, should entail compliance with the guiding principles of stable prices, sound and sustainable public finances and monetary conditions and a sustainable balance of payments.

(2)

Experience gained during the first decade of functioning of the economic and monetary union shows a need for improved economic governance in the Union, which should be built on stronger national ownership of commonly agreed rules and policies and on a more robust surveillance framework at the Union level of national economic policies.

(2a)

Achieving and maintaining a dynamic Single Market shall be considered an element of the proper and smooth functioning of the economic and monetary union.

(3)

In particular, surveillance of the economic policies of the Member States should be broadened beyond budgetary surveillance to prevent excessive macroeconomic imbalances and help the Member States affected devise corrective plans before divergences become entrenched and before economic and financial developments take a durable turn in an excessively unfavourable direction . This broadening should go in step with deepening of fiscal surveillance.

(4)

To help address such imbalances, a procedure laid down in legislation is necessary.

(5)

It is appropriate to supplement the multilateral surveillance referred to in Article 121(3) and (4) TFEU with specific rules for detection, prevention and correction of macroeconomic imbalances. It is essential that the procedure should be embedded in the annual multilateral surveillance cycle.

(5a)

Reliable statistical data is the basis for the surveillance of macroeconomic imbalances. In order to guarantee sound and independent statistics, Member States should ensure the professional independence of national statistical authorities, which shall be consistent with the European statistics code of practice as laid down in Regulation (EC) No 223/2009. In addition, the availability of sound fiscal data is also relevant for the surveillance of macroeconomic imbalances. This requirement should be guaranteed by the rules provided in this regard by Regulation (EU) No […/…] on effective enforcement of budgetary surveillance in the euro area, in particular its Article 6a.

(5b)

Strengthening economic governance should include a closer and more timely involvement of the European Parliament and the national parliaments. The competent committee of the European Parliament may offer the opportunity to the Member State concerned with a Council decision in accordance with Article 3 of this Regulation to participate in an exchange of views.

(6)

Enforcement of Regulation (EU) No […/…] should be strengthened by establishing interest-bearing deposits in case of non-compliance with the recommendation to take the recommended corrective action which will be converted into a yearly fine in case of repetitive non-compliance with the recommendation to address excessive macroeconomic imbalances within the same imbalances procedure. These enforcement measures should be applied for Member States whose currency is the euro ▐.

▐

(8)

In case of failure to comply with Council recommendations the interest-bearing deposit or the fine shall be imposed until the Council establishes that the Member State has taken corrective action to comply with its recommendations.

(9)

Moreover, repeated failure of the Member State to draw up a corrective action plan to address the Council recommendation should be equally subject to a yearly fine as a rule, until the Council establishes that the Member State has provided a corrective action plan that sufficiently addresses its recommendation .

(10)

To ensure equal treatment between Member States, the interest-bearing deposit and the fine should be identical for all Member States whose currency is the euro and equal to 0,1 % of the gross domestic product (GDP) of the Member State concerned in the preceding year.

(10a)

The Commission should also be able to recommend reducing the size of a sanction or cancelling it on grounds of exceptional economic circumstances.

(11)

The procedure for the application of the sanctions on the Member States which fail to take effective measures to correct excessive macroeconomic imbalances should be construed in such a way that the application of the sanction on those Member States would be the rule and not the exception.

(12)

Fines referred to in Article 3 of this Regulation shall constitute other revenue, as referred to in Article 311 of the Treaty, and shall be assigned to stability mechanisms to provide financial assistance, created by Member States whose currency is the euro in order to safeguard the stability of the euro area as a whole.

(13)

The power to adopt individual decisions for the application of the sanction provided for in this Regulation should be conferred on the Council. As part of the coordination of the economic policies of the Member States conducted within the Council as specified in Article 121(1) TFEU , these individual decisions are an integral follow-up to the measures adopted by the Council in accordance with Article 121 TFEU and Regulation (EU) No […/…].

(14)

Since this Regulation contains general rules for effective enforcement of Regulation (EU) No […/…], it should be adopted in accordance with the ordinary legislative procedure referred to in Article 121(6) of the Treaty.

(15)

Since an effective framework for detection and prevention of macroeconomic imbalances cannot be sufficiently achieved by the Member States because of the deep trade and financial inter-linkages between Member States and the spillover effects of national economic policies on the Union and the euro area as a whole and can be better achieved at Union level, the Union may adopt measures in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in the same Article, this Regulation does not go beyond what is necessary to achieve those objectives,

(a)

two successive Council recommendations in the same imbalance procedure are adopted in accordance with Article 8(3) of Regulation (EU) No […/…], where the Council considers, that the Member State has submitted an insufficient corrective action plan,

(b)

two successive Council decisions in the same imbalance procedure are adopted declaring non-compliance in accordance with Article10(4) of Regulation (EU) No […/…],

(a)

the effectiveness of the regulation,

(b)

the progress in ensuring closer coordination of economic policies and sustained convergence of economic performances of the Member States in accordance with the Treaty