Friday

18th Jan 2019

EU commission to outline plans for political union

  • The commission will outline 'the features of an economic and political union required to make mutualisation rational for all' (Photo: ec.europa.eu)

The European Commission has said it will soon bring forward plans for an economic and political union it says is necessary for the creation of debt-mutualising eurobonds - one of the most controversial proposed solutions to the current eurozone crisis.

"We need to reflect what kind of European union would be required to deepen economic and political integration, for instance so that joint issuance of debt would make sense for all member states sharing the single currency," economics commissioner Olli Rehn told MEPs on Tuesday (22 May).

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

He said the commission would "soon" come up with a "medium to long term roadmap" outlining the necessary deeper fiscal and economic integration that would minimise moral hazard - member states running up debt because they know it will be paid by others - and ensure "fiscal sustainability."

"In other words," the commissioner added, "the features of an economic and political union required to make mutualisation rational for all."

With his statement, Rehn has put the eurobonds issue firmly back on the table just ahead of a meeting of EU leaders in Brussels on Wednesday (23 May) to discuss growth strategies for Europe.

The commission first published an ideas paper on various types of eurobonds in November last year. The paper was immediately shot down by Germany, the eurozone's paymaster.

Germany remains firmly against the idea arguing that too many other elements - such as guaranteed fiscal discipline - have to be in place before it can be discussed.

But the election of Socialist Francois Hollande as president of France earlier this month has altered the nature of the policy debate in Europe, taking it away from a one-dimensional focus on austerity towards a discussion that includes ideas to stimulate economic growth.

Hollande has said he will raise the issue of eurobonds with German Chancellor Angela Merkel during Wednesday's summit. German officials have countered that the idea is "not a legitimate theme" for the meeting.

The summit has been billed by EU president Herman Van Rompuy - who has in the past also said that mutualisation of euro debt must be discussed - as a no-decisions but no-taboos get-together.

Meanwhile, the institutional changes implied by Rehn's statement to MEPs have a potentially more receptive audience in Germany and beyond.

Last week, German finance minister Wolfgang Schaeuble said the European Commission should be the government of Europe and its president should be directly elected.

The eurozone crisis has made erstwhile foes of further EU integration think twice as well.

Britain, outside the euro and one of its more sceptical members, has also started making public statements about the need for fiscal and political union, with many arguing that the eurozone's woes have been exacerbated by the fact that the EU lacked the tools - such as a central transfer system - to effectively deal with it.

EU bleeding untold billions to fraud

Over €6bn of EU taxpayers' money was stolen by criminals in recent years and over €130m is still being lost each year, EU auditors said.

ECB takes over ailing Italian bank

Decades of mismanagement appear to have caught up with Italy's Carige bank as the European Central Bank takes control in a move to stave off another banking crisis.

Analysis

China's 2019 growth outlook

As China's growth seems to be slowing, some observers see the country amid what the New York Times called a "severe downturn". As they mistake China's secular deceleration with cyclical fluctuations, they miss the rapid increase in Chinese living standards.

Exclusive

Fines for dangerous ski lifts vary widely across EU

Failure to comply with EU safety requirements for ski lifts is punished very differently across EU member states - posing a problem for the sector, as unscrupulous firms could set themselves up in states where fines are the lowest.

News in Brief

  1. Minority elects Lofven as prime minister of Sweden
  2. Putin opposes EU prospects of Serbia and Kosovo
  3. Tsipras launches campaign to ratify Macedonia deal
  4. US-EU meeting in doubt after Trump cancels plane
  5. Germany and China to sign pact on finance cooperation
  6. Labour divided on second Brexit vote plan
  7. New abortion laws pave way for Norwegian majority government
  8. Another referendum 'would take a year', Downing St says

Stakeholders' Highlights

  1. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  2. Nordic Council of MinistersSeminar on disability and user involvement
  3. Nordic Council of MinistersInternational appetite for Nordic food policies
  4. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  5. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  6. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  7. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  8. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  9. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  10. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  11. Nordic Council of MinistersThe Nordic gender effect goes international
  12. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General

Latest News

  1. Germany led way on EU human rights protection
  2. How to troll the European Parliament elections
  3. MEPs in Strasbourg: everywhere but the plenary
  4. Brexit delay 'reasonable', as May tries cross-party talks
  5. MEPs allow Draghi's membership of secretive bank group
  6. EU parliament backs Morocco deal despite row
  7. Barnier open to 'future relations' talks if UK red lines shift
  8. German spies to monitor far-right AfD party

Join EUobserver

Support quality EU news

Join us