Sunday

22nd Jul 2018

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.

... our 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 'tax lady' hits Google with record fine

Margrethe Vestager has fined the US tech giant with €4.34bn for abusing its market dominance in mobile operating systems - but assured US president Donald Trump that it is not because she does not like America.

MEPs side with Fry over McCartney on copyright

The European Parliament decided to take more time studying proposed changes to the EU's copyright regime, amidst fears of 'upload filters' - and accusations of scaremongering.

Mr Juncker goes to Washington

European Commission president will meet US president Donald Trump before the end of July to try to "de-dramatise" the tense trade relations.

EU and Japan wave light in Trump's 'darkness'

EU leaders and Japanese prime minister signed a series of agreements, including the EU's biggest trade deal ever, designed as an answer to the disruption of the world order by the US president.

News in Brief

  1. Libyan PM rejects EU migrant camps idea
  2. Italy's Salvini to sue critical anti-mafia writer
  3. EU countries send aircraft to Sweden to help with wildfires
  4. British ex-commissioner's jobs called into question
  5. May to tell EU to drop Irish border 'backstop' idea
  6. Trump threatens EU over Google fine
  7. Spain withdraws arrest warrant for Catalan separatists
  8. EU readies counter-measures on possible US car tariffs

Stakeholders' Highlights

  1. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  2. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  3. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  4. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  5. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  6. Mission of China to the EUChina: Work Together for a Better Globalisation
  7. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  8. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  9. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  10. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  11. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  12. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs

Join EUobserver

Support quality EU news

Join us