The move towards an increasingly integrated monetary union within the EU’s inner core is seen as essential to securing the future of the eurozone. Yet the consequences for non-euro area Member States, not least the UK, are massive. In light of this, the House of Lords EU Committee have today announced a new inquiry into the EU ‘Genuine Economic and Monetary Union’ (GEMU) and its implications for the UK
Some of the questions the Committee are inviting evidence on include:
- Are the UK Government right to choose not to participate in GEMU? What are the risks of the UK finding itself in a small minority of non-participating Member States?
- How realistic are the plans for GEMU? Do they go far enough to deal with the flaws in the EMU exposed by the financial crisis, or are they unrealistic and overambitious?
- Will the proposals for banking union be enough to break the link between bank and sovereign debt?
- Are the proposals for eurozone economic policy coordination realistic?
- How would the European Commission’s proposal for a euro area budget work?
- Will steps towards Genuine Economic and Monetary Union inevitably require treaty change?
- How will EU institutions have to change in order to accommodate deeper integration?
- How can the interests of the wider Single Market be met in the event that a smaller number of Member States take GEMU forward?
Commenting Lord Harrison, Chairman of the House of Lords EU Sub-Committee on Economic and Financial Affairs, which will conduct the inquiry, said:
“The UK Government have said they will not take part in the majority of the proposals for GEMU as they are primarily focused on the eurozone. But it would be naive to think the proposals won’t have a significant impact on the UK and the single market as a whole. There are major questions for the Government to answer as to how the UK should best respond to these momentous developments.
“Our inquiry will examine whether the proposals set out will be enough to deal with the eurozone crisis and preventing future crises, or if they are in fact unrealistic aims. This is a live issue and the proposals will evolve as our inquiry goes forward. Our final report will provide a detailed analysis of the way ahead, to encourage the UK Government and EU institutions alike to make the right decisions as the future structure of the EU takes shape.”
The inquiry will focus on the proposals set out in the recent Commission report A Blueprint for a Deep and Genuine Economic Monetary Union and the European Council President Herman Van Rompuy paper Towards a Genuine Economic and Monetary Union.
The move towards an increasingly integrated monetary union within the EU’s inner core is seen as essential to securing the future of the eurozone. It is based on four key building blocks seen as essential for the future of the EMU. These are: an integrated financial framework; an integrated budgetary framework; an integrated economic policy framework and strengthened democratic legitimacy and accountability.
The Committee invite any interested parties to submit written evidence by 24 June. The Committee will start taking oral evidence from 21 May.