In the 2017 report covering the expansion of EMU, the European Commission highlighted the basic problems within the eurozone^[6]. This included difficulties in achieving internal convergence, which changed into macroeconomic divergence between individual members of the monetary union during the crisis. It drew attention to the low level of public and private investments, which make it harder to begin the process of quick rebuilding of economic growth. It covered existing risks in financial systems, connected with burdening banks with too many risky loans, as well as the rising level of debt within member states. The commission concluded that the EMU is still struggling with the problem of institutional gaps and is managed in a way which is ineffective (on the European level). Finally, it suffers from a serious deficit of democratic legitimacy, which makes its job of managing even harder. The diagnosis thus presented by the Commission is in line with the opinions held by numerous economists^[7].

The Commission concluded that the EMU is still struggling with the problem of institutional gaps and is managed in a way which is ineffective (on the European level)

The Commission’s recommendations covering future reforms within the EMU repeat in many ways the proposals put forward earlier, in a report produced by the five leading presidents*^[8]. Both documents draw attention to the need to tighten fiscal controls* in member states so as to reduce the budgetary deficit and public debt, in line with requirements set out by the Maastricht Treaty*. It was deemed necessary to complete the construction of the banking union. This involves additional – aside from those delivered by the banks themselves – mechanisms of financing a singular restructuring fund and orderly dismantling of banks*, by member states and special line of credit from the European Financial Stability Facility (EFSF). Another element of the banking union should be a European system of secure deposits*. Both documents support the idea of creating a capital markets union*, hence a greater integration and control over non-banking financial institutions. They also support the creation of a European Monetary Fund (EMF), which could replace the EFSF (which was established during a time of crisis). And yet, they do not mention an increase to the financial scale of this fund, which in fact turned out to be sufficient in the case of Portugal, Spain, Ireland and Greece, but would definitely not prove to be so in the case of economies such as Italy becoming insolvent.

The Commission proposed the creation of a new type of securities in the eurozone, secured by treasury bonds (sovereign bond-backed securities)*. They would in theory make it easier to facilitate the recovery of balance sheets of banks burdened with risky loans*. And yet, they are criticised by economists and ratings agencies, as involving many threats to financial institutions^[9].

The Commission assumes that the main mechanism for eliminating these macroeconomic imbalances should be market mechanisms, which seems to omit existing EMU experiences

Another tool for ratifying the eurozone, both in relation to the banking sector and the member states threatened with insolvency, would be the introduction of communitarian debt*. For many countries in Northern Europe this proposal means covering the debts in Southern European states, as well as opening the gates to increased public debts within the EMU. This would, however, be a form of systemic mechanism for eliminating macroeconomic imbalances from the level of the monetary union, especially if these sorts of common bonds* were used to achieve investment aims in the weakest member states.  

The Commission assumes that the main mechanism for eliminating these macroeconomic imbalances should be market mechanisms^[10], which seems to omit existing EMU experiences. It also seems to indicate that states should individually make economic adjustments, encouraged by macroeconomic monitoring procedures and the European Semester, conducted by European institutions. Up till now, the aforementioned procedures were not effective in reducing these inequalities in terms of monetary union, even if these supervisory activities were supported by aid funds. The Commission stresses the need to increase macroeconomic conditionality for EU funds (including those dedicated to unifying processes*), and therefore conditioning their availability based on the ability to carry out the recommendations taken from the European Semester. At the same time, in both the documents under analysis there are contradictory recommendations covering the reduction of economic inequalities. On the one hand, there are recommendations to strengthen structural reforms in member states, intended to improve economic competitiveness, such as liberalisation of labour markets, limiting access to welfare and pension payments* and so on. On the other hand, the documents also cover the ideas of minimum social standards and social benefits* in the EU, stabilising taxation and regulating labour markets, which in the case of some member states could lead to increased worker protection, levels of taxation and welfare payments. In the case of Poland, this type of activity would rather damage economic competitiveness and increase debt, rather than reforms which make it easier to enter the monetary union.    

In these documents, there is mention of the need to set up a ministry of finance for the eurozone

Both documents mention the question of introducing automatic stabilising systems*, especially in the case of so-called “asymmetric shocks”. The Commission proposes, among others, a unified system of unemployment benefit payments in cases of sudden increases in levels of unemployment. It also proposes a mechanism for protecting public investments, so that the EMU can take over responsibility for such investments from member states, in which the economic climate has worsened. In the report drafted by five EU leaders* there was mention of the European Fund for Strategic Investments (EFSI), which would support weaker member states in rebuilding economic growth and competitiveness. On the other hand, the Commission report encourages the introduction of a separate budget for the eurozone, which could be a source of financing both for structural investments, as well as social security in times of economic hardship*. In these documents, there is mention of the need to set up a ministry of finance for the eurozone, which could both oversee fiscal policies in member states, as well as managing investment funds, social spending and other forms of financial redistribution within the EMU. Finally, both documents cover the question of gradual building of a political union with the intention of reducing the democratic deficit. There is talk of strengthening the Eurogroup (an informal body which brings together ministers from the euro area countries), introducing a unified representation of the eurozone among external organisations, especially the IMF, as well as strengthening the role of national parliaments and the European Parliament (EP) in managing the EMU. Experiences show that instruments such as the European Semester or aid projects in the eurozone markedly weakened the role of national parliaments and national democracies in relation to budgetary policies, while work of the EP in managing crises situations was merely symbolic^[11].