EU summit approves key elements of monetary reform

"A year ago," Donald Tusk told journalists, "we promised concrete steps to strengthen the Economic and Monetary Union. Today, leaders delivered on this promise."

The President of the European Council was trying manfully to suggest that the EU summit was not simply preoccupied with Brexit. Life goes on. Although the Brexit issue was unavoidable at the final press conference.

British Prime Minister Theresa May had said that talks would restart with the union immediately to complete the business left undone over the past two days.  Mr Tusk said that although he had no mandate for more talks and that the withdrawal agreement was inviolable, he was “always at Mrs May’s disposal”. Most expect another summit in January.

Concerned that perhaps the leaders were not being seen in the media as sufficiently sympathetic to MPs’ concerns about getting out of the backstop, European Commission President Jean-Claude Juncker said that “a second after approval by the British and European parliaments of the withdrawal agreement we will start negotiations” on the future relationship.

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He acknowledged “deep mistrust” in the Commons of the EU’s intentions, but the union was determined that the backstop should not last one day more than necessary. It will be suspended when agreement is in place on an alternative which does an equal job in protecting the frictionless border.

He insisted that the EU treated the British prime minister with great respect – better, in fact, than many British MPs.

The leaders agreed two important elements of economic and monetary union reform – the creation of a common backstop for the banking Single Resolution Fund, a means of ensuring the fund can cope with even the biggest defaults.

And secondly,  to give the European Stability Mechanism, the union’s state bailout arm, stronger powers to prevent and manage financial crises.

The move would “significantly strengthen the monetary union”, Mr Juncker said, adding that the leaders had also indicated their support for recently announced Commission plans to bolster the international standing and use of the euro.

The leaders agreed to ask the European Commission to continue its work on a stabilisation and competitiveness fund that would help sates weather internal and external economic shocks. They agreed that funding for the measures would come from the EU’s next seven-year budget, the MFF.

Chancellor Angela Merkel told journalists that the "Franco-German proposal for a euro zone budget has been controversial so far and therefore we were asked to explain it again before the council. We have adopted substantial parts of what Macron has proposed, the French president was quite satisfied, we made good contribution with the Franco-German co-operation."

Mr Juncker said that the leaders’ debate on the MFF, which saw little more than a formal restatement of member-state starting positions, and the work done by the Austrian presidency in crafting the complex “negotiating box” setting out options, would allow the incoming Romanian presidency to accelerate discussions.

He expressed disappointment that the leaders had been unable to advance the asylum/migration reform package debate, accusing some member states of “hypocrisy” over their lukewarm support for commission proposals to strengthen the EU coastal and border service.

Five elements of a seven-element migration package were close to agreement, but supporters of reform of the “Dublin” regulation to increase support for front-line states by sharing resettlements refuse to split the package. They fear that to do so will see Dublin reform consigned to an indefinite future.