'Whatever it takes': the Five Presidents' Report on completing Economic and Monetary Union Contents

Appendix 6: Glossary



Annual Growth Survey


Alert Mechanism Report

Asymmetric shock

A shock which only affects one economy (or a small minority of economies such as those within the eurozone) more than the rest, perhaps because a key industry encounters difficulties or there is a natural disaster.

Automatic [fiscal] stabiliser

Budgetary instruments that help to stabilise economic conditions and output without explicit intervention of a country’s fiscal authority. Examples are taxes, unemployment benefits and interest rates.


The means by which shareholders, bondholders and some depositors will be required to contribute to the costs of bank failure.


British Bankers’ Association


Bank Recovery and Resolution Directive

Capital Markets Union

The Capital Markets Union (CMU) is a European Commission project to mobilise capital in Europe by breaking down barriers to investment.


Capital Markets Union


Requiring a recipient of financial support to undertake specific policy actions in order to receive the funds.

Counter-cyclical policy

A policy that opposes the trend of an economic cycle.

Covered deposits

According to a definition from the Financial Stability Board: “Covered deposits are those eligible deposits that are actually covered or insured by a deposit insurance scheme (i.e. they comply with the eligibility criteria for inclusion and the value of the deposits fall within the maximum coverage limit).”26 Deposits are covered up to €100.000 in the EU.


Capital Requirements Directive IV


Capital Requirements Regulation


Country-specific recommendation


Deposit Guarantee Scheme


Deposit Guarantee Scheme Directive

Direct Recapitalisation Instrument

This instrument allows the European Stability Mechanism to recapitalise a systemic and viable euro area financial institution directly under specific circumstances as a last resort measure.


European Central Bank.


Economic and Financial Affairs Council, the chief economic and financial decision-making body for EU government.


European Parliament Economic and Monetary Affairs Committee.


European Deposit Insurance Scheme


European Financial Stability Facility


European Financial Stabilisation Mechanism


Economic and Monetary Union


European Systemic Risk Board


European Stability Mechanism


European Union


A proposal for common issuance by euro area Member States of short-term government debt with a maturity of up to one to two years.


A proposed principal form of public debt open to all members of the eurozone, jointly and severally guaranteed by all participating Member States.

European Fund for Strategic Investment

The Investment Plan for Europe or ‘Juncker Plan’ aims to revive investment in strategic projects around Europe by mobilizing €315 billion for the period 2015–2017.


An informal body that brings together the finance ministers of countries whose currency is the euro.

European Commission

The executive of the European Union.

European Council

The European Council is the EU institution that defines the general political direction and priorities of the European Union.

Euro-Plus Pact

The Euro Plus Pact is an intergovernmental initiative that was endorsed by the European Council on 25 March 2011. All signatories are committed to implementing a set of reforms that address economic and financial imbalances.

European Semester

The European Semester is the EU’s annual economic policy coordination cycle that involves policy guidance and surveillance.

Euro Summit

The Euro Summit brings together the heads of state or government of the euro area countries, the Euro Summit President and the President of the European Commission. Euro Summit meetings provide strategic guidelines on euro area economic policy.


Monetary union of European Union Member States.

Fiscal Compact

The fiscal part of the Treaty on Stability, Coordination and Governance. It is an intergovernmental treaty, signed on 2 March 2012, that aims to reinforce the economic pillar of Economic and Monetary Union by adopting a set of rules intended to foster budgetary discipline. The Fiscal Compact requires signatories to spell out how they will reach their medium-term objectives and prescribes pathways to achieving those objectives.


Flexicurity is an integrated strategy for enhancing, at the same time, flexibility and security in the labour market

Four Presidents

The President of the European Council, Herman Van Rompuy, President of the European Commission, Jose Manuel Barroso, the President of the Eurogroup, Jean-Claude Juncker, and President of the European Central Bank, Mario Draghi.

Five Presidents

The authors of the Five Presidents’ Report were: European Commission President Jean-Claude Juncker, the President of the Euro Summit, Donald Tusk, the President of the Eurogroup, Jeroen Dijsselbloem, the President of the European Central Bank, Mario Draghi, and the President of the European Parliament, Martin Schulz.


Gross Domestic Product

Green Paper

Green Papers are consultation documents produced by the Government or the European Commission.


International Monetary Fund


Long-Term Refinancing Operations


A branch of economics that studies how the aggregate economy behaves

Macroeconomic imbalances

These can be interpreted as features of an economy which are incompatible with a sustainable macroeconomic trajectory. They include asset bubbles, trade deficits, excessive debt and a range of other problems

Medium-term objective

Medium term objective. In order to pursue sound fiscal policies and ensure a sustainable budgetary position over an economic cycle, each EU Member State is set a budgetary target, known as a medium-term budgetary objective (MTO). MTOs are defined in structural terms. This means that they take into consideration business cycle swings and filter out the effects of one-off and other temporary measures.


An economic theory and practice whereby the government regulates an economy to increase wealth by maximising net exports.


Member of the European Parliament


Macroeconomic imbalances procedure


Medium-term objective


The Organisation for Economic Co-operation and Development


A market or industry which is dominated by a small number of firms.


Outright Monetary Transactions.

Pro-cyclical policy

A policy that accentuates the economic cycle by increasing aggregate demand in periods of above average growth and cutting in periods of downturn.


Qualified Majority Voting


The process by which a failing bank is dealt with so as to avoid knock-on effects on other financial intermediaries that lead to systemic problems in the financial sector.


Stability and Growth Pact

Single Resolution Board

The Single Resolution Board has been created to respond to the Euro area crisis and establishes one of the pillars of the Banking Union


Five regulations and a directive aiming to create tighter discipline on public finances.

Sovereign debt

Debt that is issued by a national government.


Single Resolution Board


Single Resolution Fund


Single Resolution Mechanism


Single Supervisory Mechanism


Treaty on the Functioning of the European Union. The Treaty entered into force on 1 December 2009.


A decision group formed by the European Commission, European Central Bank and the International Monetary Fund


Treaty on Stability, Coordination and Governance


These two regulations apply only to the euro area, ensuring closer oversight of the public finances of euro area members, notably through the obligation to submit draft budgets to the Commission for scrutiny.

White Paper

White papers are policy documents produced by the Government or the European Commission that set out their proposals for future legislation.

266 See Financial Stability Board (2012) ‘Thematic Review on Deposit Insurance Systems’, 8 February.

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