EU leaders are making efforts to reach an agreement next year on providing eurozone member states extra cash to promote job creation and boost growth, although the funds would be tied to contracts similar to bailout agreements. More specifically, EU leaders are hoping to find an agreement soon on such an arrangement in which member states had an option to finalize voluntary contracts with the Commission to pursue reforms as well as “associated solidarity mechanisms” to cover reforms financially. Since the beginning of the eurozone sovereign debt crisis there has been a discourse on how extensive austerity and solidarity programs should be. The EU thinks that difficult reforms ought to be matched with help from European partners.
The idea of establishing voluntary contractual deals to match reforms and funds was first proposed last year, but actions and decisions have regularly been postponed due to the lack of agreement between European countries. According to the draft of the conclusions of the upcoming EU summit to take place on December 19-20, European leaders are expecting member states to make up their own proposals for reforms. The proposals might cover a variety of growth and job-enhancing policies and measures, including the functioning of labor market and the efficiency of the public sector, as well as R&D, innovation, education and vocational training.
The proposals are to be gauged by the Commission and the European Council, while the Commission would be in charge of implementing its new powers over the “balance sheets“ of member states. EU leadership will also task both the Commission and the Council to evaluate all options regarding the exact structure of loans, grants, guarantees, and institutional form of the proposed funding. Spain, France, and Italy have been the major proponents of more common support mechanisms for eurozone states. In contrast, Germany has not expressed too much willingness to support such programs.
