Wednesday

1st Apr 2020

Eurozone should have own treasury by 2025

  • European Commission president Jean-Claude Juncker. The report is likely to cause some national governments to worry about sovereignty issues (Photo: European People's Party)

Eurozone states should cede more powers to EU institutions, including to a euro area treasury to be set-up in the next 10 years, according to a new report on further integration in the single currency area published on Monday (22 June).

"The world’s second largest economy cannot be managed through rule-based cooperation alone," says the report, drawn up by the heads of the European Commission, the EU Council, Eurogroup, the European Parliament and the European Central Bank (ECB).

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

  • Jeroen Dijsselbloem is both eurogroup president and Dutch finance minister (Photo: Ministerie van Financiën Nederland / Valerie Kuypers)

The eurozone “will need to shift from a system of rules and guidelines for national economic policy-making to a system of further sovereignty sharing within common institutions, most of which already exist and can progressively fulfil this task," it adds.

"In practice, this would require member states to accept increasingly joint decision-making on elements of their respective national budgets and economic policies."

The report, entitled 'Completing Europe's Economic and Monetary Union', comes on the same day that finance ministers and their government leaders of the euro area will meet to debate the Greek debt crisis, amidst renewed fear of a Greek exit from the eurozone.

The report refers to a “common destiny [which] requires solidarity in times of crisis and respect for commonly agreed rules from all members” and that those in the eurozone have given up their national currencies "once and for all".

The financial and economic crisis has “forced national governments and EU institutions to take quick and extraordinary steps”, but “the quick fixes of recent years need to be turned into a lasting, fair and democratically legitimate basis for the future”.

The report contains both medium- and long-term measures.

In the next two years, by 30 June 2017, each country should create a 'competitive authority', “a national body in charge of tracking performance and policies in the field of competitiveness”.

These bodies should be “independent entities with a mandate to ‘assess whether wages are evolving in line with productivity and compare with developments in other euro area countries and in the main comparable trading partners”.

The opinions of the authorities should be used by social partners in wage setting negotiations.

Other measures for the next two years include an advisory European Fiscal Board, completion of the Banking Union, and a reorganisation of the European Semester.

These changes should be possible witin the current EU treaty but other ideas such as eurozone finance ministry by 2025 are likely to require treaty changes.

“Euro area member states would continue to decide on taxation and the allocation of budgetary expenditures according to national preferences and political choices. However, as the euro area evolves towards a genuine EMU, some decisions will increasingly need to be made collectively while ensuring democratic accountability and legitimacy.”

The report also notes that the Eurogroup should have a full-time president. Jeroen Dijsselbloem, the current eurogroup chief, is also Dutch finance minsiter.

The report, which is mostly the work of European Commission president Jean-Claude Juncker, is likely to raise sovereignty concerns in some captials.

However, the report argues that member states have already lost power during the financial crisis but without gaining any democratic oversight.

“At the height of the crisis, far-reaching decisions had often to be taken in a rush, sometimes overnight. In several cases, intergovernmental solutions were chosen to speed up decisions or overcome opposition. Now is the time to review and consolidate our political construct”, the report says.

Some of the report's ideas were voiced earlier this month in an op-ed by the German and French economy ministers.

Schaeuble said to want to split EU commission powers

German finance minister Wolfgang Schaeuble would like the competition and single market departments removed from the European Commission, according to a report in Germany's leading centre-right daily.

News in Brief

  1. Danish conservatives want Orban party kicked out of EPP
  2. Dutch finance minister repents on virus help
  3. France to house domestic violence victims in hotels
  4. Europe sends medical goods to Iran, despite US embargo
  5. Commission sets consultation on raising 2030 climate target
  6. 12-year old Belgian girl dies of coronavirus
  7. EU commission: no 'indefinite' emergency measures
  8. Denmark plans 'gradual' return to normal after Easter

Vietnam sent champagne to MEPs ahead of trade vote

A trade deal with Vietnam sailed through the European Parliament's international trade committee and after its embassy sent MEPs bottles of Moet & Chandon Imperial champagne over Christmas.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Stakeholders' Highlights

  1. UNESDAMaking Europe’s Economy Circular – the time is now
  2. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  3. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  4. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  5. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  6. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms

Latest News

  1. Without European patriotism, EU decline is inevitable
  2. EU cancels April Fool's 'fake news'
  3. A coronavirus 'Marshall Plan' alone won't be nearly enough
  4. Trying to think straight about coronavirus
  5. Berlin ready to airlift Greek island refugees
  6. Von der Leyen criticises Hungary, but fails to mention it
  7. Air pollution drops in Europe, but how long will it last?
  8. Human rights abusers don't stop for virus, MEPs tell EU

Join EUobserver

Support quality EU news

Join us