France-Germany-Russia Tripartite Meeting
Deauville, October 18, 2010
France and Germany concur on the need to strengthen the European economic government. To this end they agreed on the following points.
1) France and Germany stress that the procedures ensuring budgetary surveillance and coordination of economic policies should be strengthened and accelerated. This has to involve the following:
A broader range of sanctions would have to be progressively applicable in both the preventive and corrective arms of the Pact. These sanctions should be more automatic, while respecting the role of the different institutions and the institutional balance.
In the implementation of the preventive arm of the Pact, the Council must be able to decide, by qualified majority, to impose graduated sanctions in the form of interest-bearing deposits when the trajectory of a Member State’s budgetary consolidation deviates particularly significantly from the adjustment trajectory provided for under the Pact.
As regards the Pact’s corrective arm, when the Council decides to open an excessive deficit procedure, there should be automatic sanctions once the Council, ruling by qualified majority, has decided that a Member State hasn’t taken the necessary corrective measures within six months.
To supplement the legislative framework for surveillance of macroeconomic imbalances, the case of a Member State with a persistent imbalance and placed under Council supervision will have to be discussed at the European Council.
2) France and Germany consider that it is necessary to revise the treaty and that the President of the European Council should be requested to present, liaising closely with the European Council members, concrete options for the establishment of a robust crisis resolution mechanism before the March 2011 meeting.
The revision of the treaties will be limited to the following points:
Establishment of a permanent robust mechanism to ensure orderly crisis management in the future, including the necessary arrangements for an adequate participation of the private sector and allowing Member States to take appropriate coordinated measures to safeguard financial stability in the Euro Area.
In the event of a serious violation of the basic principles of the Economic and Monetary Union, and following the appropriate procedures, suspension of the voting rights of the State concerned.
Member States would have to adopt and ratify the necessary amendments in agreement with their respective Constitutional rules in sufficient time before 2013./.