The State of the European Union. The European Parliament faces its most important elections yet

RECOMMENDATIONS 139 – The European Commission should function as an executive branch in all matters except those explicitly assigned to the European Council, which in any case should be restricted. The president of the Commission should have the right to choose his or her own Commissioners and form a Commission that clearly reflects of the political configuration of the EU Parliament and thus expresses the will of European voters. The EU budget should be gradually in- creased to 5% of Union GDP and be funded through European taxes rather than Member State contributions to ensure that the Commission acts independently and the policies it develops are fair and equitable. – A new Treaty reform procedure that does not require unanimity and offers clear models of association for States that cannot, or do not wish to, form part of a federal system must be developed. – Given that all of these reforms will require convening a third Convention, the new European Parliament should take the initiative of drafting a proposal for submission to an Intergovernmental Conference in the near-term future. This process must be participa- tory, open, inclusive and transparent, involve civil society, the media and the institutions of Member States and culminate in a simultane- ous EU-wide referendum. 3. Reform of the euro – Improving eurozone structure should be one of the top priorities of member countries. One option to consider is a negotiated agree- ment combining compliance with relevant European regulation and a rapid response facility. Pending ESM reform could include the de- velopment of a precautionary instrument with ex ante conditional- ity pegged to compliance with Commission recommendations. – ����������������������������������������� Secondly, risk reduction criteria for financial entities must be estab- lished without delay, as they must be in place in order to complete the banking union. In principle, these criteria could be based on EBA stress tests and compliance with supervision and resolution procedures. Once these objectives are set and achieved, the intro- duction of a European deposit insurance scheme and a single reso- lution fund must be irreversible. – ����������������������������� Lastly, in terms of fiscal reform, Member States must lay the founda- tion for a centralised fiscal capacity that will foster investment and fulfil its stabilising function by opening up possibilities for such