Government working to strengthen EMU

The government is working to strengthen the Economic and Monetary Union (EMU). Focusing on improving sustainable growth and stability will make the EMU more effective, and that is in all member states’ interests. This is the message set out by Minister of Finance Wopke Hoekstra and Minister of Foreign Affairs Halbe Zijlstra in their letter to the House of Representatives, which they sent today in conjunction with Minister of Economic Affairs and Climate Policy Eric Wiebes.

First and foremost, it is vital that all member states get their houses in order. In recent years member states have taken significant steps to do this through reforms to strengthen their economies and make them more resilient. Nevertheless, big differences between the member states remain. Member states can make good progress by working together closely and learning from each other. In addition, deepening the single market and spending EU funds in a more targeted way can increase member states’ sustainable growth.

As well as growth, stability – in both the economy and the financial sector – is important. For the financial sector, it is vital that the banking union is completed in accordance with the road map agreed in 2016. Banks’ risks must be reduced before introducing a degree of risk sharing via a European Deposit Insurance Scheme (EDIS).

It is crucial that member states stick to the fiscal rules set out in the Stability and Growth Pact. The government believes these rules should be simplified and that they should be enforced more independently and strictly. Assistance programmes can be made more effective by turning the rescue fund – the European Stability Mechanism (ESM) – into a European Monetary Fund (EMF), without altering the control exercised by the member states. If a member state requesting support has a level of debt that is unsustainable, steps must be taken to restructure the debt before the assistance programme begins.

With this approach the government aims to ensure that the Netherlands can benefit even more from the advantages offered by the EMU.

Ministry responsible