Commission proposes a governance framework for the Budgetary Instrument for Convergence and Competitiveness

Dombrovskis 19

Valdis Dombrovskis, Vice-President of the EC. European Union, 2019 Source: EC – Audiovisual Service

This article is brought to you in association with the European Commission.

Building on the vision set out in the Five Presidents’ Report of June 2015, the Commission’s Communication on the Deepening of the Economic and Monetary Union of 12 June 2019 and the guidance by the Euro Summit of 21 June 2019, the European Commission today proposes a governance framework for the Budgetary Instrument for Convergence and Competitiveness. The instrument will help euro area Member States and other participating Member States to enhance the resilience of their economies and of the euro area through support to targeted reforms and investment.

The Eurogroup has already defined the main features of the Budgetary Instrument for Convergence and Competitiveness. Today, the Commission puts forward a proposal to organise the instrument’s governance: it sets out a framework for providing strategic orientations for reforms and investment to be supported by the new budgetary instrument in line with the overall economic policy coordination framework of the EU (the European Semester) and other EU policy instruments.

Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: “Strengthening Europe’s Economic and Monetary Union has been a centrepiece of my work under this Commission. Today we are making sure that all elements are on the table for a successful and timely agreement on the Budgetary Instrument for Convergence and Competitiveness by the EU co-legislators. Supporting coherent reforms and investment packages will help increase competitiveness, strengthen resilience and enhance convergence, ultimately leading to a more prosperous and stronger Europe.”

Günther H. Oettinger, Commissioner for Budget and Human Resources, said: “The EU budget will in future provide financial support to combined structural reforms and investments proposed by euro area Member States. This will enhance the effectiveness of EU spending and it will support convergence and competitiveness in the euro area. Our proposal today puts in place the governance for this new instrument. This represents a significant innovation for the euro area.”

Under today’s proposal, the Council, following discussions in the Eurogroup, will each year set strategic orientations on reforms and investment priorities for the euro area as a whole. Later on, the Council will also adopt a Recommendation with country-specific guidance addressed to each euro area Member State on reforms and investment to be supported under the instrument.

Both steps will be fully embedded in, and consistent with, the steps and guidance foreseen under the European Semester. The implementation of the instrument will be aligned with the timeline of the Semester. It will also be consistent with and provide synergies with other policies for investment, such as EU cohesion policy funds, the Connecting Europe Facility and InvestEU.

Non-euro area Member States participating in the Exchange Rate Mechanism II will be able to participate in the budgetary instrument on a voluntary basis. For this, appropriate arrangements should be developed consistent with today’s proposal.

In particular, the new framework will enable euro area Member States to:

i. set strategic orientations for reforms and investment priorities in the euro area (as part of the euro area recommendation);

ii. provide country-specific guidance in relation to reform and investment objectives, to be adopted in parallel with the country-specific recommendations;

iii. receive information from the Commission on how euro area Member States have followed up on previous strategic orientations;

The Budgetary Instrument for Convergence and Competitiveness will be created within the  proposal for the Reform Support Programme. The budgetary instrument is planned to be part of the Union’s budget and its size will be determined in the context of the negotiations on EU’s next long-term budget for 2021-2027.


The Commission’s proposal for a Reform Support Programme of May 2018 has been the basis for discussions on a Budgetary Instrument for Convergence and Competitiveness for the euro area. Anchored within the EU budget, this instrument will support euro area Member States in their targeted packages of reforms and investment.

At the Euro Summit of 14 December 2018, the Heads of State or Government mandated the Eurogroup to work on the design, modalities of implementation and timing of a Budgetary Instrument for Convergence and Competitiveness for the euro area. The instrument is to be part of the Union budget and set up by amending the Commission legislative proposal for a Reform Support Programme if necessary. The Euro Summit also indicated that the instrument should be subject to criteria and strategic guidance from the euro area Member States.

Based on the main features agreed in a term sheet by the Eurogroup and endorsed by the June Euro Summit, the objective of the Budgetary Instrument for Convergence and Competitiveness will be to support combined structural reforms and investments in euro area Member States with the aim to strengthen potential growth and to enhance the resilience and adjustment capacity of euro area economies. It will be complementary to existing EU funds.

As set out in the term sheet, euro area Member States will submit, on a voluntary basis, duly substantiated and coherent proposals for reform and investment packages, which will be assessed by the Commission based on transparent criteria. Financial support would be made available in instalments subject to achieving agreed milestones. The euro area Member States meeting within the Council, the Eurogroup and the Euro Summit would provide strategic orientation and guidance as part of the Council recommendation on the economic policy of the euro area.







the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

‘Amid stormy global seas, UN charter remains our moral anchor’, says Guterres on United Nations Day

The rise of techno-nationalism – and the paradox at its core

Crisis hit countries cut down public spending on education

Sudan: Health challenges in the Sustainable Development Goals era

Here’s how data can shine a light on financial crime

Friday’s Daily Brief: hunger in North Korea, human rights in Iran, updates on DR Congo and Benin

Denouncing attacks against Baghdad protesters, UN warns ‘violence risks placing Iraq on dangerous trajectory’

JADE Team at the European Business Summit 2017

Why European manufacturing SMEs in the South face fatal dangers

Superbugs: MEPs advocate further measures to curb use of antimicrobials

JADE Romania Celebrates the 4th Anniversary

Mexico: Helping refugees go into business, a ‘win-win situation’, says UNHCR’s Grandi

How the EU crisis hit countries saved the German and French mega-banks from bankruptcy and still pay the costs

EU labour mobility: Inconvenient truths for everybody

MEPs approve boost to workers’ rights in the gig economy

Could implants treat people with brain disease? A young scientist explains

Australia wants to build a giant underground ‘battery’ to help power the nation

10 of Albert Einstein’s best quotes

Eurozone: Subdued inflation can lead to more recession

Monday’s Daily Brief: drug-resistant diseases, Venezuelan refugees, fighting in Tripoli, and hate speech

Alarm over violent attacks on lawmakers, opposition in Malawi, ahead of elections

Mirrored classroom display highlights scale of massive education crisis

Love unlimited

Public Health equality in a trench

On Human Rights Day European Youth Forum calls for end to discrimination of young people

Asking for more restriction on intra EU immigration: Unproductive and politically dangerous

A Valentine’s Special: heart has nothing to do with it, it’s all Brain

Swedish PM Löfven: “Our common values must guide us to an even better future”

Who will win the AI race? If countries work together, then the answer could be all of us

Thai cave boys spared thundershowers, highlighting extreme climate disruption: UN weather agency

Around 52 million in Near East, North Africa, suffering chronic undernourishment, new UN food agency report reveals

Four ways Artificial Intelligence can make healthcare more efficient and affordable

This wall of shoes is for the women killed by domestic violence

‘Terror and panic’ among Rohingya who may be forced to return to Myanmar – UN rights chief

OECD welcomes French plans to increase and better target foreign aid

What is digital equality? An interview with Nanjira Sambuli

Waste-free consumption: 3 reasons why cities will lead

Easing US-China trade tensions could save millions of jobs: Asia-Pacific UN report

This is the state of the world’s health, in numbers

Rising human trafficking takes on ‘horrific dimensions’: almost a third of victims are children

We must treat cybersecurity as a public good. Here’s why

Why and how Germany had it again its own way in Cyprus

This is what CEOs around the world see as the biggest risks to business

The EU responds to US challenges by fining Apple with €13 billion

An FTA between EU-US to hurt South Korea

Why we need both science and humanities for a Fourth Industrial Revolution education

AIESEC @ European Business Summit 2014: European Youth, Change Now Patiently

The Venezuelan exodus to Roraima and its repercussions

Improvements to pension systems have made them better placed to deliver pensions

Afghanistan probe: ‘at least 60 civilians’ killed after US military airstrikes on alleged drug labs

Agreement reached on digital copyright rules

Labels for tyres: deal for greener and safer road transport

How universities can become a platform for social change

EU-US Privacy Shield data exchange deal: US must comply by 1 September, say MEPs

The Next Web 2014, the biggest European conference on Internet so far and the Absence of Brussels from Amsterdam

Search Engine neutrality in Europe in danger: Are 160.000 Google filtering requests good enough?

Eurozone: There is a remedy for regional convergence

These four countries are the happiest in the European Union

The European Sting’s 2018 in most critical review

How much is nature worth? $125 trillion, according to this report

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s