On May 12, 2010, the European Commission presented a far-reaching policy coordination reform proposal with four main objectives reiterated on June 7 by EU president Herman Van Rompuy: first, strengthening budgetary discipline through the Stability Pact; second, reducing divergences in competitiveness between member states; third, introducing an effective financial crisis mechanism; fourth, improving economic governance and coordination. This four-point plan includes the establishment of a permanent €500 billion European Stabilization Mechanism to act as a credible backup plan, available if and when needed over the next three years (including €60 billion from the existing balance of payments facility and €440 billion through a special-purpose vehicle (SPV). The IMF would provide a further €250 billion if and when needed). Enforcement of these commitments would be more stringent for EMU members. Van Rompuy's task force will present a report in October.
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