Yesterday, the European Council’s Task Force on Economic Governance met to discuss steps that must be taken to enhance economic governance, as well as the main elements of legislation that the European Commission is expected to adopt on September 29, 2010. Among the topics discussed were the needs for (1) greater attention to debt, including requirements for more ambitious adjustment trajectories for countries with a debt level exceeding 60%; (2) a new enforcement system at the EU level that will introduce sanctions at an earlier stage, condition the use of EU funds on the fulfillment of obligations under the Stability and Growth Pact and make decision-making rules on sanctions more automatic and based on a reverse majority rule; and (3) a new macro-economic surveillance framework that would include annual assessments of risk and corrective measures designed to better monitor competitiveness developments and to prevent harmful imbalances, bubbles and negative spill-over effects within the EU.

The Task Force is expected to submit a full report to the European Council at the end of October.