Sunday

25th Jun 2017

EU commission to present eurobonds plans next week

  • Integration is the only solution, say EU presidents (Photo: Council of European Union)

In a bid to stem the tide of the debt crisis engulfing the eurozone, the twin leaders of the European Union, Herman van Rompuy and Jose Manuel Barroso, have announced plans for further integration.

“We are now facing a truly systemic crisis. It has made it clear that we must progress with greater integration of economic governance, especially within the euro area” Barroso, President of the European Commission, told the European Parliament on Wednesday (16 November).

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

He said he would present plans next week “for the joint issuance of bonds in the euro area”. “I believe that Euro stability bonds will be seen as natural when we achieve our goal of reinforced governance and of course discipline and convergence,” he said.

EU Council President Van Rompuy, meanwhile, told parliament that the current crisis leaves the members of the eurozone with no choice.

“The crisis in the euro area does require us to do more. We need to acknowledge that this means a sharing of sovereignty for all members of the euro zone, and not only a loss for the countries in difficulty,” he said.

He also said that euro zone governments should look at strengthening the role of automatic sanctions for countries that break fiscal rules, "such as a suspension of voting rights or the suspension of structural funds or other payments."

Also, he asked out loud, "should we provide power for a central authority to intervene in national budgetary procedures?"

He said he would present an interim report next month with "a roadmap on how to proceed". A finalised report will then be presented in May or June next year.

He further dismissed worries, voiced most loudly by the UK but echoed by those outside the eurozone, that closer integration within would cause a two-tier Europe.

“There has been much exaggerated talk about this,” he said. “It is time to de-dramatize this debate. After all, it is perfectly natural that those who share a common currency take some decisions together.”

“It is in the interest of the non eurozone EU members that its financial stability is organized and secured. A better structured euro area is in everybody’s interest,” he added.

For Guy Verhofstadt, leader of the liberal group in parliament and longtime advocate of joint eurobonds, the proposals did not go far enough.

“The euro zone crisis has reached a very dangerous point. We are now witnessing increasing spreads on interest rates between national sovereign bonds and the benchmark German bund even for countries with a AAA credit rating. Nothing less than full economic and fiscal union including euro bonds will do,” he said.

Agenda

This WEEK in the European Union

Economic governance of the eurozone comes once more on the agenda this week, as the European Commission will put forward the proposal of creating eurobonds, despite German resistance.

Brussels sees no serious opposition to eurobonds

The European Commission has launched a polemic on eurobonds - a proposal that eurozone countries should guarantee one another's debt, taking member states into uncharted territory in terms of solidarity and trust.

Rehn backs 'smart' mutual debt fund

The idea of mutualising eurozone debt remains as controversial as ever but economic affairs commissioner Olli Rehn has spoken out in favour of a halfway house solution.

Focus

EU and China move to fill US void

At a summit in Brussels, EU and Chinese leaders will attempt to deepen ties on trade and climate as US president Trump plans to pull out of the Paris climate deal.

Italy reaches EU deal on failing bank

After months of negotiations, the European Commission and Italy agreed on the terms of rescue for Monte dei Paschi di Siena bank, including job cuts, salary caps and private sector involvement in the bailout.

News in Brief

  1. Merkel and Macron hold symbolic joint press conference
  2. Juncker has 'no' clear idea of kind of Brexit UK wants
  3. Belgian PM calls May's proposal on EU citizens 'vague'
  4. UK lacks support of EU countries in UN vote
  5. Spain to command anti-smuggler Mediterranean force
  6. Estonia confirms opposition to Nord Stream 2 pipeline
  7. Ireland and Denmark outside EU military plan
  8. EU leaders renew vows to uphold Paris climate deal

Stakeholders' Highlights

  1. EPSUOn Public Services Day, Stop Austerity! Workers Need a Pay Rise!
  2. EGBAOnline Gambling: The EU Court Rejects Closed Licensing Regimes In Member States
  3. World VisionFaces of Today, Leaders of Tomorrow: Join the Debate on Violence Against Girls - 29 June
  4. ECR GroupThe EU Must Better Protect Industry from Unfair Competition
  5. Malta EU 2017Better Protection for Workers From Cancer-Causing Substances
  6. EPSUAfter 9 Years of Austerity Europe's Public Sector Workers Deserve a Pay Rise!
  7. Dialogue PlatformGlobalised Religions and the Dialogue Imperative. Join the Debate!
  8. UNICEFEU Trust Fund Contribution to UNICEF's Syria Crisis Response Reaches Nearly €200 Million
  9. EUSEW17Bringing Buildings Into the Circular Economy. Discuss at EU Sustainable Energy Week
  10. European Healthy Lifestyle AllianceCan an Ideal Body Weight Lead to Premature Death?
  11. Malta EU 2017End of Roaming Charges: What Does It Entail?
  12. World VisionWorld Refugee Day, a Dark Reminder of the Reality of Children on the Move

Latest News

  1. Macron’s investment screening idea watered down by leaders
  2. Leaders unimpressed by May’s offer to EU citizens
  3. New Irish PM praises unscripted nature of EU summits
  4. EU extends sanctions on Russia
  5. UK's universities set 'Brexit wish list'
  6. Decision on post-Brexit home for EU agencies postponed
  7. May's offer on citizens’ rights dismissed as ‘pathetic’
  8. 'Historic' defence plan gets launch date at EU summit