2012-11-29 10:35:39
The European Commission has set out a timetable for eurozone integration,
including plans for a separate eurozone budget and joint issuance of debt.
Germany, the biggest eurozone economy, remains firmly opposed to joint debt
issuance - so-called eurobonds.
In the short term the commission's chief, Jose Manuel Barroso, envisages a new
fund inside the EU budget to speed up structural reforms in the eurozone.
The plan to underpin the euro also looks beyond the next five years.
Much of Mr Barroso's plan coincides with the eurozone integration blueprint
presented to EU leaders by European Council President Herman Van Rompuy last
month.
But Mr Barroso's short-term "convergence and competitiveness instrument" within
the EU budget is a new idea.
It would be separate from the seven-year budget (the so-called Multi-annual
Financial Framework, or MFF), which EU leaders argued over at a summit last
week.
Treaty changes
The instrument - essentially a fund for struggling economies in the 17-nation
eurozone - would require governments to sign "contracts" similar to the strict
conditions demanded for bailouts.
Mr Barroso said: "We need a deep and genuine Economic and Monetary Union in
order to overcome the crisis of confidence that is hurting our economies and
our citizens' livelihoods."
The three-phase plan calls for changes to EU treaties in the medium term - that
is, in 18 months' to five years' time. Treaty change is usually a thorny issue
in the EU and can involve referendums and arduous negotiations.
For the longer term - beyond five years - Mr Barroso calls for "adequate
pooling of sovereignty" and an integrated eurozone budget. That fiscal union
"could allow for the common issuance of public debt", he said.
Germany's Chancellor Angela Merkel says joint debt issuance would violate the
EU's current "no bailout" clause in the Maastricht Treaty, which launched the
euro.
Germany, Austria, the Netherlands and some other eurozone countries want to
avoid having to transfer funds to prop up weak eurozone partners.