Changes from report parliamentary committee draft to plenary report

Added______________

Added* Regulation (EU) 2024/1263 of the European Parliament and of the Council of 29 April 2024 on the effective coordination of economic policies and on multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97 (OJ L, 2024/1263, 30.4.2024, ELI: http://data.europa.eu/eli/reg/2024/1263/oj).

Added** Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure (OJ L 209, 2.8.1997, p. 6, ELI: http://data.europa.eu/eli/reg/1997/1467/oj).’;

Added(b) paragraph 2 is deleted;

Added(c) paragraph 3 is replaced by the following:

Added‘3. On a request from the Commission, a Member State subject to enhanced surveillance shall:

Added(a) communicate to the Commission, the ECB, and, where appropriate, to the relevant ESAs, in accordance with Article 35 of Regulations (EU) No 1093/2010, (EU) No 1094/2010 and (EU) No 1095/2010, at the requested frequency, disaggregated information on its financial system, including the results of any stress test exercises or sensitivity analyses carried out under point (b) of this paragraph;

Added(b) carry out, under the supervision of the ECB in its supervisory capacity, or, where appropriate, under the supervision of the relevant ESAs, stress test exercises or sensitivity analyses, as necessary, to assess the resilience of the financial sector to various macroeconomic and financial shocks, as specified by the Commission and the ECB, in liaison with the relevant ESAs and with the ESRB;

Added(c) be required to submit to regular assessments of its supervisory capacities over the financial sector in the framework of a specific peer review carried out by the ECB, in its supervisory capacity, or, where appropriate, by the relevant ESAs;

Added(d) communicate to the Commission any information needed for the monitoring of macroeconomic imbalances in accordance with Regulation (EU) No 1176/2011;

Added(e) communicate to the Commission any information needed for budgetary surveillance purposes.

AddedThe application of the first subparagraph, points (b) and (c), of this paragraph shall respect the division of responsibilities established by Article 6 of Council Regulation (EU) No 1024/2013*.

AddedWhere relevant, the ECB, in its supervisory capacity in accordance with Regulation (EU) No 1024/2013, and the relevant ESAs shall prepare, in liaison with the ESRB, an assessment of the potential vulnerabilities of the financial system and shall submit that assessment to the Commission, at the frequency indicated by the latter, and to the ECB.

AddedThe Commission, the ECB and the relevant ESAs shall treat any disaggregated information communicated to them as confidential.

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Added* Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 6, ELI: http://data.europa.eu/eli/reg/2013/1024/oj).’;

Added(d) paragraph 4 is deleted;

Added(e) in paragraph 5, the second subparagraph is replaced by the following:

Added(a) ▌Every quarter, the Commission shall communicate its assessment to the competent committee of the European Parliament and to the EFC. In that assessment, it shall examine, in particular, whether further measures are needed.’;

Added(4) in Article 5, the first subparagraph is replaced by the following:

Added‘A Member State intending to request financial assistance from one or several other Member States or third countries, the ESM, or another relevant international financial institution, such as the IMF, shall immediately inform the President of the Eurogroup Working Group, the member of the Commission responsible for Economic and Monetary Affairs and the President of the ECB of its intention.’;

Added(5) in Article 6, the first and second subparagraphs are replaced by the following:

Added‘Where a Member State requests financial assistance from the EFSM or the ESM, the Commission shall assess, in liaison with the ECB and, where possible, with the IMF, the sustainability of that Member State's government debt and its actual or potential financing needs. The Commission shall submit that assessment to the Eurogroup Working Group where the financial assistance is to be granted under the ESM, and to the EFC where the financial assistance is to be granted under the EFSM.

AddedThe assessment of the sustainability of the government debt shall be based on the most likely macroeconomic scenario or a more prudent scenario and budgetary forecasts using the most up-to-date information and taking proper account of the outcome of the reporting referred to in Article 3(3). The Commission shall also assess the impact of macroeconomic and financial shocks and adverse developments on the sustainability of government debt.’

Added(6) Article 7 is amended as follows:

Added(a) paragraph 1 is amended as follows:

Added(i)the first subparagraph is replaced by the following:

Added‘Where a Member State requests financial assistance from one or several other Member States or third countries, the EFSM, the ESM or the IMF, it shall prepare, in agreement with the Commission, acting in liaison with the ECB and, where appropriate, with the IMF, a draft macroeconomic adjustment programme, which shall include annual budgetary targets. In accordance with Article 32(2) of Regulation (EU) 2024/1263, where a Member State has an active national medium-term fiscal-structural plan, and that Member State becomes subject to a macroeconomic adjustment programme, that national medium-term fiscal-structural plan shall be taken into account in the design of the macroeconomic adjustment programme.’;

Added(ii) the fourth subparagraph is replaced by the following:

Added‘The draft macroeconomic adjustment programme shall take into account the practice and institutions for wage formation. It shall also take into account the national medium-term fiscal structural plan of the Member State concerned and be consistent with its commitments regarding the Union’s common priorities referred to in Article 13, point (c), of Regulation (EU) 2024/1263’;

Added(b) in paragraph 2, the second subparagraph is replaced by the following:

Added‘The Commission shall ensure that the memorandum of understanding signed by the Commission on behalf of the ESM is fully consistent with the macroeconomic adjustment programme approved by the Council.’;

Added(c) paragraph 4 is amended as follows:

Added(i) the second subparagraph is replaced by the following:‘Every three months, the Commission shall inform the EFC of such progress. The Member State concerned shall fully cooperate with the Commission and with the ECB. It shall, in particular, provide the Commission and the ECB with all the information that they consider to be necessary for the monitoring of the implementation of the macroeconomic adjustment programme in accordance with Article 3(3).’;

Added(ii) the third subparagraph is replaced by the following:

Added‘The Commission shall inform the Chair and Vice-Chairs of the competent committee of the European Parliament of the conclusions drawn from the monitoring of the macroeconomic adjustment programme. That information shall be treated as confidential.’;

Added(d) in paragraph 12, the third and fourth subparagraphs are replaced by the following:

Added‘Concerning those instruments, the Council, acting on a recommendation from the Commission, shall, by a decision addressed to the Member State concerned, approve the main policy requirements which the ESM plans to include in the conditionality for its financial support, to the extent that the content of those measures falls within the competence of the Union as laid down by the Treaties.

AddedThe Commission shall ensure that the memorandum of understanding signed by the Commission on behalf of the ESM is fully consistent with such a Council decision.’;

Added(7) Article 10 is amended as follows:

Added(a) paragraph 1 is deleted;

Added(b) paragraph 2 is amended as follows:

Added(i)point (a) is replaced by the following:

Added‘(a) it shall be exempt from submitting, as appropriate, the reports under Article 3(5) and Article 5(1a) of Regulation (EC) No 1467/97;’;

Added(ii) point (c) is replaced by the following:

Added‘(c) with regard to the monitoring provided for by Article 7(4) of this Regulation, it shall be exempt from monitoring under Article 10(1) and Article 10a of Regulation (EC) No 1467/97 and monitoring underlying any decision under Article 4(1) and Article 6(2) of that Regulation.’;

Added(8) Article 12 is deleted;

Added(9) Article 14 is amended as follows:

Added(a) paragraph 1 is replaced by the following:

Added‘1. A Member State shall be under post-programme surveillance as long as a minimum of 75 % of the financial assistance received from one or several other Member States, the EFSM, the ESM or the EFSF has not been repaid. The Council, on a proposal from the Commission, may extend the duration of the post-programme surveillance in the event of a persistent risk to the capacity of the Member State concerned to repay the financial assistance received. The proposal from the Commission shall be deemed to be adopted by the Council unless the Council decides, by a qualified majority, to reject it within 10 days of the Commission's adoption thereof.’;

Added(b) the following paragraphs 1a and 1b are inserted:

Added‘1a. Whilst a Member State is under post-programme surveillance referred to in paragraph 1, the Commission shall monitor and assess all of the following:

Added(a) the capacity of the Member State concerned to repay the financial assistance received, taking into account its economic, budgetary, and financial situation;

Added(b) without prejudice to Article 22 of Regulation (EU) 2024/1263, the implementation of any reforms included in the macroeconomic adjustment programme or the Council decision referred to in Article 7(12) of this Regulation;

Added(c) the need for corrective measures to mitigate risks of the Member State concerned to repay the financial assistance received.

Added1b. ▌The Commission, in liaison with the ECB, shall communicate every six months, its assessment referred to in paragraph 1a to the competent committee of the European Parliament, to the EFC and to the parliament of the Member State concerned.’;

Added(c) paragraph 2 is replaced by the following:

Added‘2. On a request from the Commission, a Member State under post-programme surveillance shall comply with the requirements under Article 3(3).’;

Added(d) the following paragraphs 2a and 2b are inserted:

Added‘2a. Five years after the application of post-programme surveillance, the Commission may prepare a specific assessment on the capacity of the Member State concerned to repay the financial assistance received. In preparing that assessment, in addition to its analysis of the economic, budgetary and financial situation, including of the implementation of the national medium–term fiscal-structural plan, the Commission shall take into account all of the following circumstances: