EU Council to discuss further euro area economic integration but little progress likely

The key topic for the June Council is the move towards further euro area integration and to improve governance. The report from the Four Presidents (EU, Commission, ECB, and Council) will be presented. This report is expected to include measures to further steps towards budgetary and economic cooperation. 

A discussion is also likely on further labour, pension and product market reforms in order to harmonise the social security system in particular. 

The creation of common (but limited) shock absorption mechanism (I.e. an insurance-type system), seems no longer on the cards (at least not at this Summit). Finally, a more politically integrated EMU should also be discussed. However, this would implicitly lead to a two-speed EU.

The report is unlikely to lead to dramatic changes in the euro area governance and integration process as France and Germany in particular want to keep away from any measures that would require Treaty changes before their general elections in 2017.