Today, the Task Force to the European Council issued its report designed to address economic governance issues within the European union, which issues have been highlighted by the financial crisis and the more recent turmoil in sovereign debt markets. The report recommends a “fundamental shift in European economic governance.”In separate releases, theEuropean Commission and the EU's Economic and Financial Affairs Council announced their support for the Task Force's recommendations.

The Task Force wasestablished by the European Council of 25-26 March 2010 with the mandate to present, before the end of 2010, policy recommendations for an improved crisis resolution framework and better budgetary discipline. The report provides recommendations in five areas:

  • Fiscal discipline – the report recommends that the current budgetary surveillance framework be applied in a better and more consistent way, particularly with greater focus on debt and fiscal sustainability.
  • Broadening economic surveillance –the report recommends the introduction of a new mechanism for macroeconomic surveillance underpinned by a new legal framework to work alongside a budget focused surveillance framework.
  • Deeper and broader coordination of economic policy – the report notes the ECOFIN’s acceptance of the “European Semester” that will allow simultaneous assessment of both budgetary measures and structural reforms fostering growth and employment.
  • Robust framework for crisis management – the report recommends that in addition the creation of the European Financial Stability Facility and the European Financial Stability Mechanism, there is a need in the medium term to establish a credible crisis resolution framework for the euro area.
  • Stronger institutions for more effective economic governance – the report recommends the use or setting up of public institutions or bodies to provide independent analysis, assessments, and forecasts on domestic fiscal policy matters.

The report concludes that adoption of secondary legislation will be needed for the implementation of many of these recommendations, and urges that parties opt for a “fast track” approach.